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2015 (11) TMI 939 - HC - VAT and Sales TaxDetension of truck and seizure of goods - transporter was not carrying any transit pass issued by the entry check-post - the officer at the check-post informed the carrier that since there was no exit check-post in Diu, it would not be possible for him to issue transit pass even on the basis of the manual application - Thus, though the transporter had given application for transit pass in Form 404, no transit pass was issued to the transporter, and the truck with the goods, was allowed to enter into the State of Gujarat - Levy of tax, interest and penalty u/s 68 - Held that:- A perusal of the seizure memo as well as the show cause notice issued by the second respondent reveals that the seizure memo has been issued in exercise of powers under section 68(4) of the VAT Act and the show cause notice has been issued in exercise of powers under section 68(5) thereof - on a plain reading of the above provision, it is evident that it is the officer in-charge of a check-post who is empowered to take action under sub-sections (4) and (5) of section 68 of the VAT Act. Sub-section (1) of section 68 of the VAT 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 do so; 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. Therefore, the check-post or barrier as envisaged under sub-section (4) of section 68 of the Act must be notified by the State Government in exercise of powers under sub-section (1) of section 68 of the VAT Act. It is, therefore, manifest that the powers under subsection (1) of section 68 of the VAT Act clearly cannot be exercised by the Additional Commissioner Enforcement, Gujarat State by virtue of a letter, as has been submitted on behalf of the respondents. Even if such letter had granted such permission, the same would be without jurisdiction, inasmuch as, the jurisdiction under section 68(1) of the VAT Act has to be exercised in the manner provided therein by the State Government by issuing a notification specifying the places where such check-post is to be set up or barrier is to be erected. Under the circumstances, the second respondent had no jurisdiction to take any action in exercise of powers under section 68(4) or (5) of the VAT Act. The impugned seizure memo and show cause notice are, therefore, without any authority in law and therefore, the same cannot be sustained. - Under the circumstances, action of the second respondent in resorting to taking action under section 68(4) of the VAT Act, when he had no power to do so cannot be justified with reference to the merits of the case. Even otherwise, this court is of the view that also on merits, the petitioner has made out a good case. - Decided in favour of assessee.
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