U.P VAT - Whether authority under U.P VAT Act is authorised to effect seizure of goods, if Form 38's are submitted subsequent to seizure - YES: HC
By TIOL News Service
ALLAHABAD, NOV 16, 2016: THE ISSUE IS - Whether the U.P. VAT Act, 2008 restricts the Commissioner to prescribe a particular area within which the authorities of the Department may be denuded of their jurisdiction to effect a seizure. NO IS THE VERDICT.
Facts of the case:
The assessee During the subject year, the goods in question had been consigned by M/S India Yamaha Motors Private Limited, Surajpur, Noida and M/s Madrsan Auto Motive Elesto Technology, Kanchipuram, both the entities being situate in the State of Tamil Nadu. The vehicle carrying the aforesaid goods was apprehended on 9 April 2011 when the inspection team found that they were not accompanied by Form 38. Upon receipt of notices, the revisionist/assessee submitted a reply of the same date along with which the relevant Form 38's were also forwarded to the Assistant Commissioner. The Assistant Commissioner however rejected the said explanation and proceeded to pass an order of seizure providing that the goods would be liable to be released upon furnishing of security to the extent of 40%. On revision, the goods were directed to be released upon furnishing of a bank guarantee in respect of the disputed amount instead of making a cash deposit. This bank guarantee, Mr. Gupta informs, had been duly submitted. However, no release was made.
High Court's holding:
1. This Court finds that insofar as the submission in respect of "no mans land" is concerned, this Court notices that the circular of the Commissioner does not restrain the authorities of the Trade Tax Department from effecting seizures within a radial distance of the border of the State of U.P. The circular in fact highlights the experience of the Department that various dubious transactions were in fact taking place in "no mans land" and that dealers were effecting transfers after the goods had entered the U.P border and before they reached their godowns. This circular does not take the case of the revisionist any further. In any view of the matter, this Court does not find that the U.P. VAT Act, 2008 confers any jurisdiction upon the Commissioner to prescribe a particular area within which the authorities of the Department may be denuded of their jurisdiction to effect a seizure. Nor can the conferment of such a power be read into the jurisdiction of the Commissioner or be approved by this Court. The power to apprehend, inspect and seize goods is one that is exercisable throughout the length and breadth of the State. If that power exist and be exercisable statutorily throughout the State, surely a circular of the Commissioner cannot eclipse the same.
2. The second submission is that, once Form 38's had been duly submitted, there was no justification in effecting a seizure of goods. It becomes relevant to note here that under subsection (4), the officer authorized is empowered to undertake a search or inspection of goods which have been transported within the State and to apprehend them if he finds that they are not covered by proper and genuine documents. The Act then enjoins the authorized person to call upon the assessee to show cause before proceeding to record his satisfaction that an attempt has been made to evade assessment or payment of tax. Now admittedly, in the facts of the present case the Form 38's did not accompany the goods in question. The assessing authority in the seizure order has recorded that the bills, invoices as well as the bills of transportation also did not carry any details of the Form 38's. In this view of the matter, at least the first part of subsection (4), namely the requirement of the goods not being accompanied by proper and genuine documents, was satisfied.
3. That takes us to the second part of subsection (4) to be tested and to answer whether the authority was justified in effecting seizure even though the Form 38's were subsequently submitted along with the reply to the show cause notice. The Form 38 neither accompanied the goods nor were its details mentioned in the invoices or bills of transportation which were found with the consignment. This fact has been duly recorded in the order of the Assistant Commissioner. This, therefore, is perhaps an indication that these Forms were prepared subsequent to the seizure. At least this possibility cannot be ruled out. On this state of the record the Assistant Commissioner, in the opinion of this Court, was fully justified in recording his satisfaction that an attempt had been made to evade payment of tax. In this view of the matter, the Court is of the firm opinion that the satisfaction which stood recorded by the Assistant Commissioner does not merit any interference of this Court.
(See 2016-TIOL-2792-HC-ALL-CT)
