Research › Search › Judgment

Gujarat High Court · body

2011 DIGILAW 274 (GUJ)

SHIVAM SALES CORPORATION v. STATE OF GUJARAT

2011-04-01

AKIL KURESHI, SONIA GOKANI

body2011
ORDER Akil Kureshi :- These petitions have been heard for final disposal at the request of learned advocates for the parties. Since the facts are similar they may be recorded as emerging in Special Civil Application No. 3260 of 2011. Petitioner No. 1 claims to be a trader/purchaser and petitioner No. 2 is a transporter. The goods belonging to petitioner No. 1, being carried in truck of petitioner No. 2, were intercepted at Gujarat-Maharashtra border by the State tax authorities under the belief that the vehicle did not have necessary documents and that such goods were to be off-loaded in the State of Gujarat and were not meant for transit, the same were detained. The case of the petitioner is that the goods were in transit from Maharashtra to its ultimate destination at Delhi. Only small portion thereof was to be delivered at a destination in Gujarat. Before proper declaration could be made and tax to the extent of goods, which were to be off-loaded in Gujarat could be paid, the vehicle was intercepted and goods seized. It appears that the State authorities have also passed an order for sale of goods. In response to the notice issued, the respondents appeared and filed reply mainly contending that the details of the registered office of the petitioner No. 1 are not accurate. Upon inquiry, it was found that at the given address, there is no office of petitioner No. 1. It is further contended that petitioner No. 2 is only a transporter. Seized vehicle has already been released. He, therefore, has no further grievance. It is further contended that the driver of the vehicle had given a statement that the goods were to be off-loaded in the State of Gujarat. Facts are similar in other cases also. On the basis of such facts counsel for the petitioners drew our attention to the statutory provisions, particularly, section 68 of the Gujarat Value Added Tax Act, 2003. He contended that even if the goods were meant to be sold in Gujarat, in view of the provisions of sub-section (5) of section 68, maximum liability would be to pay tax and penalty not exceeding 1.5 times the tax on such goods. He submitted that all disputed questions may be examined during adjudication process. However, in the meantime the goods may be released on some reasonable conditions. He submitted that all disputed questions may be examined during adjudication process. However, in the meantime the goods may be released on some reasonable conditions. He, however, clarified that the entire consignment is to be transported outside Gujarat except 40 bags of betel nuts which would be off-loaded in Gujarat. On the other hand learned AGP submitted that the petitioners' credentials and whereabouts are unclear. Conditions may, therefore, be appropriately provided to take care of the interest of the Revenue. Having thus heard learned advocates for the parties, we are of the opinion that all issues are required to be first adjudicated by the competent authority before whom the petitioners may have opportunity to produce all necessary documents. However, this is bound to take some time. During this period, the goods of the petitioners could be released on certain conditions. We find that if it is ultimately found that the goods were meant for sale in Gujarat and not for transit as contended, petitioner No. 1 would be in addition to paying tax, liable to penalty not exceeding 1.5 times the amount of tax. By securing such amounts, pending adjudication, goods may be released. Under the circumstances, the petitions are disposed of with the following directions : (1) The respondent - authorities shall adjudicate all questions regarding tax and penalty liability of petitioner No. 1 with respect to the goods seized with an opportunity to the petitioners to produce necessary documents and raise all contentions. For the above purpose, orders for sale of goods are set aside. (2) In the meantime, the goods of petitioner No. 1 in each petition shall be released on conditions that he shall : (a) Deposit (if desired under protest) the full amount of tax on the entire consignment; (b) Furnish unconditional bank guarantee to the tune of 1.5 times the tax liability from any nationalized bank; (c) It would be open for the authorities to verify with the Bank concerned the genuineness of the bank guarantee supplied. (d) Such bank guarantee shall be kept alive till final decision is taken by the authorities and if any liability of tax or penalty arises, till such liability is discharged. (e) Upon ultimate adjudication, it would be open for the respondents to encash the bank guarantee if the petitioners are found liable to pay any amounts in addition to what is already deposited by them. (e) Upon ultimate adjudication, it would be open for the respondents to encash the bank guarantee if the petitioners are found liable to pay any amounts in addition to what is already deposited by them. (f) The goods shall be released as soon as above conditions are satisfied. At the time of release of the goods petitioner No. 1 shall file declaration regarding quantity of the betel nuts that they intend to transport outside the State and the quantity they intend to off-load in the State. Necessary transit pass shall be issued by the State authorities in the light of such declarations. Upon ultimate transit of the goods outside the State, petitioner No. 1 shall produce necessary documentary proof in this regard with the competent authority adjudicating the issues; All the petitions are disposed of accordingly.