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2014 (9) TMI 639 - HC - VAT and Sales TaxDemand of security to the extent of 40% of the valuation of the consignment has been imposed - violation of VAT Act and Entry Tax Act - Held that:- Imposition was at the stage of seizure and not at the stage of penalty and the Court held that imposition of demand of security at the rate of 40% is unjustified and reduced the same to the extent of 15% of the valuation of the goods subject to cash deposit by the revisionist before the authority - amount of penalty being 40% is absolutely disproportionate to the tax, which may ultimately be sought to be levied and the same may be reduced and that so far as the Entry Tax is concerned, the security may be confined to four times of the amount of Tax. although the statute provides 40% by way of penalty but the 40% is the outer limit and it shall be borne in mind that the amount of penalty or security must have a co-relation with the tax sought to be evaded. Therefore, it is directed that the amount of security by way of cash deposit be reduced to four times of the amount of tax which may ultimately be found to be the amount sought to be evaded - Decided in favour of assessee.
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