2017 (11) TMI 1 - HC - VAT and Sales Tax

Release of seized goods - demand of security as a condition for release of the seized goods - Held that - the Appellate Tribunal has already reduced the amount to ₹ 3,50,000/- and in such circumstances, having heard the contentions of the parties, we refuse to go into the questions of law raised and we leave it open to the petitioner to pursue his contentions before the Authority in the statutory proceedings - revision petition dismissed.

Summary

Issues:
1. Demand of security from a transporter under the Uttarakhand Value Added Tax Act, 2005.
2. Applicability of provisions of UK VAT Act to a cargo transport service provider registered under the Service Tax Act.

Analysis:
1. The petitioner, a transporter registered under the Service Tax Act, challenged an order passed by the Tribunal regarding the seizure of goods while in transit. The goods were seized invoking powers under Section 48 of the Uttarakhand Value Added Tax Act, 2005. The petitioner contended that as a transporter not engaged in business or dealing as defined in the Act, security should not be demanded. The Appellate Tribunal had reduced the demanded amount to ?3,50,000, which the petitioner found excessive. The petitioner argued that the goods had already been taxed under the Central Sales Tax, and there was no liability under the Uttarakhand VAT Act. The petitioner also claimed exemption from carrying Form-16 as per the proviso to Section 48.

2. The Standing Counsel for the State of Uttarakhand argued that Rule 26 of the Uttarakhand VAT Rules, 2005, included transporters in the category of persons required to carry Form-16 declarations. Referring to Section 48(2) of the Act, the Standing Counsel supported the demand for security from the transporter. The Court acknowledged the contentions of both parties but decided not to delve into the legal questions raised. Instead, the Court upheld the reduced amount of ?3,50,000 set by the Appellate Tribunal. The Court dismissed the revision petition, allowing the petitioner to pursue their contentions before the Authority in statutory proceedings. The Court kept the legal questions open for future consideration if needed, emphasizing that the petitioner could raise them at a later stage.

This judgment primarily addressed the issue of demanding security from a transporter under the Uttarakhand VAT Act and the applicability of VAT provisions to a cargo transport service provider registered under the Service Tax Act. The Court's decision to dismiss the revision petition while leaving the legal questions open for future consideration provides clarity on the immediate relief sought by the petitioner while preserving the opportunity to challenge the legal aspects at a later stage.