2017 (6) TMI 358 - HC - VAT and Sales Tax

Natural justice - reasonable opportunity of contest is denied to the State - release of seized goods on deposit of cash/security of 10% - Held that - law permits release of goods upon deposit of cash/security to the extent of 40% of the value of goods - this Court has granted relief to the assessee for the reason that the assessee is a registered dealer, but now goods are sought to be released in favor of the transporter pursuant to subsequent orders passed - matter requires consideration - matter on remand.

Summary

Issues:
1. Challenge to Tribunal's order directing release of seized goods upon deposit of cash security.
2. Denial of reasonable opportunity of hearing and contention of playing fraud by the assessee.
3. Request to recall the earlier order passed by the Court.
4. Interpretation of Section 58(5) of the U.P. VAT Act.
5. Consideration of releasing goods in favor of the transporter.

Analysis:
1. The revision by the revenue challenged the Tribunal's order directing the release of seized goods upon deposit of cash security amounting to 10% of the estimated value of goods. The revisionist contended that as a registered dealer, any liability could be realized, and there was no justification for the deposit. The Court modified the order, allowing the release upon submission of an indemnity bond for the disputed amount, subject to final orders by the authorities.

2. The revenue contended that they were not aware of the Tribunal's order and were denied a reasonable opportunity to contest. They further alleged that material facts were misrepresented by the assessee, leading to the release of goods. The revenue requested the Court to recall the earlier order based on Section 58(5) of the U.P. VAT Act, highlighting discrepancies in the plea made by the assessee.

3. The Court noted the revenue's concerns regarding the release of goods and the subsequent orders favoring the transporter. The matter was deemed to require further consideration, and notice was issued to the opposite party for a hearing on a specified date. The Court ordered that the goods in question should not be released until the next hearing, except upon deposit of cash security and other forms of security as specified.

4. Section 58(5) of the U.P. VAT Act was cited to emphasize the provision for hearing and deciding revision applications together, especially when earlier decisions may impede relief in subsequent applications. The revenue sought the Court to reconsider the earlier decision in light of new developments and discrepancies in the case.

5. The Court directed a reevaluation of the matter, considering all aspects raised by the revenue regarding the release of goods and the implications of the Tribunal's order. The requirement for depositing security for the release of goods was reiterated, pending further hearings and decisions by the Court.