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2016 DIGILAW 589 (GUJ)

Om Sai Associates v. State of Gujarat

2016-03-14

G.R.UDHWANI, HARSHA DEVANI

body2016
JUDGMENT Harsha Devani, J. 1. Rule. Mr. Swapneshwar Gautam, learned Assistant Government Pleader waives service of notice of rule on behalf of the respondents. 2. Having regard to the controversy involved in the present case which lies in a very narrow compass as well as the urgency of the case, this matter was taken up for final hearing today. 3. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the seizure memo dated 03.03.2016 issued by the Commercial Tax Officer-2, Unit-81, Surendranagar in exercise of powers under section 68(4)(b) of the Gujarat Value Added Tax Act, 2003 (hereinafter referred to as "the GVAT Act") whereby, the petitioner's truck No. GJ-11-X-8839 with the goods contained therein has been seized. 4. The facts of the case as averred in the petition are that the petitioner is a proprietary concern having a place of business in the State of Delhi and is engaged in trading of sopari (betel nut) and is registered under the provisions of the VAT Act in the State of Delhi. The petitioner had placed an order upon M/s. Liberty Supari Trading Company, which is a registered dealer in the State of Kerala, for purchase of sopari. Pursuant thereto, the goods were being moved by the transporter M/s. Royal Transport Company from Mangalore to the place of business of the petitioner in Delhi. For the purpose of reaching Delhi from Mangalore, the goods were to pass through the State of Gujarat. The goods entered the State of Gujarat through Bhilad check post. It is the case of petitioner that since the driver of the truck was a native of a village near Rajkot, he took a detour through the Ahmedabad - Rajkot highway so that he could stop by at his native village. On 02.03.2016, at about 1:30 a.m., the vehicle was stopped by the police and the driver was asked to show the documents relating to the goods. The policemen, thereafter, informed the VAT authorities about the truck, whereupon, the Commercial Tax Officer passed the impugned stop delivery order dated 03.03.2016 and issued notice for imposition of penalty under section 68 of the GVAT Act. Being aggrieved, the petitioner has filed the present petition. 5. Mr. The policemen, thereafter, informed the VAT authorities about the truck, whereupon, the Commercial Tax Officer passed the impugned stop delivery order dated 03.03.2016 and issued notice for imposition of penalty under section 68 of the GVAT Act. Being aggrieved, the petitioner has filed the present petition. 5. Mr. Uchit Sheth, learned advocate for the petitioner submitted that section 68 of the GVAT Act empowers the officer-in-charge of notified check-posts/barriers to seize goods in the stipulated circumstances. It was submitted that in the present case, the goods have been seized on the highway and that too, at the behest of the Police Sub Inspector, who stopped the truck on account of over-speeding. It was submitted that the goods have been seized under section 68 of the GVAT Act on the highway without there being any such provision under the Act, by an officer, who is not an officer-in-charge of a notified check-post or barrier and hence, the action of the respondents is without any authority of law. It was submitted that the goods have been seized without giving an opportunity of being heard to the petitioner, despite the fact that the transporter was having all documents relating to the goods. It was submitted that the seizure of goods without giving an opportunity of being heard is in breach of principles of natural justice. Alternatively, it was submitted that the power to impose penalty for failure to possess transit pass is as contained in section 69 of the GVAT Act. Section 69 of the GVAT Act empowers the respondents to impose penalty on the transporter if he does not possess transit pass and if he fails to sufficiently explain the reason for such failure; however, the respondents are not empowered to seize the goods under section 69 of the GVAT Act. It was submitted that the action of the authorities being totally without jurisdiction, the impugned seizure memo is required to be quashed and set aside and the respondents are required to be directed to forthwith release the truck in question with the goods contained therein. 6. On the other hand, Mr. It was submitted that the action of the authorities being totally without jurisdiction, the impugned seizure memo is required to be quashed and set aside and the respondents are required to be directed to forthwith release the truck in question with the goods contained therein. 6. On the other hand, Mr. Swapneshwar Gautam, learned Assistant Government Pleader for the respondents, supported the action of the respondents by submitting that the driver of the truck in question did not possess the transit pass and hence, the respondents had a bona fide reason to believe that the petitioner intended to sell the goods in the State of Gujarat and hence, the second respondent was justified in issuing seizure memo. It was pointed out that by virtue of the provisions section 69 of the GVAT Act, the respondents are duly empowered to levy tax and penalty when the driver or the person in-charge of the vehicle does not carry with him the necessary documents, including the transit pass. It was, accordingly, urged that the petition being devoid of merits, deserves to be dismissed. 7. The facts are not in dispute. The truck in question together with the goods contained therein has been seized by the Commercial Tax Officer, Surendranagar in exercise of powers under section 68(4)(b) of the GVAT Act. It is an admitted position that the second respondent is not an officer-in-charge of a check-post or a barrier as contemplated under section 68(1) of the GVAT Act. Sub-section (1) of section 68 of the GVAT Act provides that if the State Government considers that with a view to preventing evasion of tax in any place or places in the State, it is necessary to so do; it may by notification in the Official Gazette, direct that such number of check-posts shall be set up or such number of barriers shall be erected at such places as may be specified in the notification. Sub-section (4) of section 68 of the GVAT Act provides that if the officer in-charge of the check-post or barrier is of the opinion that the requirements of clauses (a) and (b) thereof are not satisfied, he may, after recording the reasons, seize such goods and detain the vehicle and give receipt thereof to the person from whose possession or control, the goods are seized. Sub-section (5) of section 68 of the GVAT Act empowers the officer in-charge of a check-post or barrier to impose penalty in addition to tax to the extent provided thereunder, after giving a reasonable opportunity of being heard to the owner, driver or person-in-charge of goods. Thus, under sub-section (4) of section 68 of the GVAT Act, it is the officer in-charge of the check-post or barrier who is empowered to take action under the said provision. 8. In the present case, admittedly, the goods have been seized by the police and not at a check-post or a barrier as contemplated under sub-section (1) of section 68 of the GVAT Act. The second respondent is also not an officer-in-charge of a check-post or barrier as contemplated under sub-section (4) of section 68 of the GVAT Act and hence, is not empowered to take any action under the said provision. Undisputedly, the impugned memo dated 03.03.2016 has been issued in the exercise of powers under section 68(4)(b) of the GVAT Act by the second respondent, who admittedly is not an officer-in-charge of a check-post or barrier. Under the circumstances, the action taken by the second respondent in issuing the seizure memo under section 68(4)(b) of the GVAT Act is without any authority of law and therefore, lacks jurisdiction. The impugned seizure memo, being without any authority of law, therefore, cannot be sustained. 9. Insofar as the submission that under section 69 of the GVAT Act, the respondents are duly empowered to levy tax and penalty when the driver or the person in-charge of the vehicle does not carry with him the necessary documents, including the transit pass is concerned, the same does not carry the case of the respondents any further inasmuch as, in the present case what is subject matter of challenge is the impugned seizure memo which has been issued in the exercise of powers under section 68(4)(b) of the GVAT Act and not under section 69 thereof. Besides, the section 69 of the GVAT Act does not empower the authorities under the said Act to seize a vehicle or the goods. If the requirements of section 69 of the GVAT Act are met with, the respondents were not and are not precluded from taking any action thereunder, however, the action taken under section 68(4)(b) of the Act is totally without jurisdiction. 10. If the requirements of section 69 of the GVAT Act are met with, the respondents were not and are not precluded from taking any action thereunder, however, the action taken under section 68(4)(b) of the Act is totally without jurisdiction. 10. In the light of the above discussion, the petition succeeds and is, accordingly, allowed. The impugned seizure memo dated 03.03.2016 issued by the second respondent in the exercise of powers under section 68(4)(b) of the Act is hereby quashed and set aside. The respondents are directed to forthwith release the truck of the petitioner together with the goods contained therein. The respondents, however, are at liberty to take any action in accordance with law if it is found that the petitioner does not comply with any other requirements of the GVAT Act. Rule is made absolute accordingly with no order as to costs.