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2016 (5) TMI 435 - GUJARAT HIGH COURT

2016 (5) TMI 435 - GUJARAT HIGH COURT - TMI - Validity of detention order - passed under Section 70A(2) of the Gujarat Value Added Tax Act, 2003 - Violation of principles of natural justice - Goods were in transit - No notice issued - Held that:- there is nothing therein to indicate as to what is the nature of information in respect of the goods that was sought for by the second respondent, nor is it the case of the respondent that he has sought permission to inspect the goods. The only explanat .....

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this court, the impugned detention order purportedly made under section 70A of the GVAT Act, leaves a lot to be decided and speaks a volume about the conduct of the officers under the GVAT Act or their lack of knowledge of the statutory provisions. It is not the case of the second respondent that any procedure as envisaged under sub-section (7) of section 67 of the GVAT Act has been followed in the present case. Thus, the vehicle does not appear to have been stopped under section 67(6) of the GV .....

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ion order passed under section 70A of the GVAT Act suffers from the breach of principles of natural justice as well as lack of application of mind and therefore, stands vitiated. The impugned detention order is quashed and set aside. Since the truck in question has been released during the pendency of the petition, the respondents are directed to forthwith release the goods seized from the truck as well as other documents which have been seized by them. Since in the meanwhile, the transit pass i .....

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DIK VORA, ASSTT. GOVT. PLEADER ORAL JUDGMENT (PER : HONOURABLE MS.JUSTICE HARSHA DEVANI) 1. Rule. Mr. Hardik Vora, 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 and with the consent of the learned counsel for the respective parties, the matter was taken up for final hearing. 3. By this petition under Article 226 of the Constitution of India, t .....

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econd petitioner is a Company registered under the provisions of the Companies Act, 1956 and is, inter alia, engaged in the pan-India business of commercial transportation of goods, including edible goods, for various parties. Pursuant to an order placed by M/s Annapurna Trading Company based in Delhi, the first petitioner availed of the services of the second petitioner for transportation of 15,820 kilograms betel-nuts from Nagpur, Maharashtra to Delhi. Accordingly, a truck bearing registration .....

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the State of Gujarat and the driver of the truck obtained a transit pass in Form 405 at the Songadh check post. On 22.03.2016, the truck was stopped at Changodar road by the authorities and the driver was asked to produce the invoice, lorry receipt and duplicate and triplicate copies of the transit pass in Form 405, which came to be produced by the driver. The transit pass clearly showed that the goods were only in transit in the State of Gujarat. The respondent authorities took the invoice, lo .....

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er, despite the fact that all the documents which clearly showed that the goods were only in transit from Maharashtra to Delhi had been produced, the second respondent passed the detention order dated 22.03.2016 under section 70A(2) of the Gujarat Value Added Tax Act, 2003 detaining the goods loaded in truck No.MH-40-N-2325. Being aggrieved, the petitioners have filed the present petition. 5. Ms. Amrita Thakore, learned advocate for the petitioners assailed the impugned notice as well as the imp .....

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s and hence, the detention order is exfacie violative of the principles of natural justice and deserves to be quashed and set aside. It was emphatically argued that the provisions of section 70A of the GVAT Act are not applicable to goods which are in transit in a vehicle and hence, the entire action of the second respondent is without jurisdiction. 5.1 Referring to the impugned detention order, it was submitted that the second respondent has no valid ground or authority of law for issuing such .....

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the petition deserves to be allowed by granting the reliefs as prayed for therein. 6. Opposing the petition, Mr. Hardik Vora, learned Assistant Government Pleader placed reliance upon the averments made in the affidavit-in-reply filed on behalf of the second respondent. It was submitted that the vehicle in question was detained and the goods were seized by the respondent authorities at Changodar, Near Sanand in the exercise of powers under section 70A(1)(b)(i) of the GVAT Act. It was submitted .....

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into excess movement of 800 kilometres. Thus, it is evident that the goods were going to be unloaded in the State of Gujarat at Changodar. It was submitted that in exercise of the powers under section 70A(1) (b)(i) of the GVAT Act, the respondent authorities are empowered to call upon any person who has custody of goods of a dealer for the purpose of delivery or transport, to furnish information in respect of such goods, or to permit inspection thereof. Therefore, in the light of the provisions .....

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evy tax at the rate of 5% amounting to ₹ 1,58,200/- and penalty at the rate of 150% of the amount, which comes to ₹ 2,37,300/-. Thus, the action taken by the respondents being in consonance with the provisions of section 70A of the GVAT Act, there is no warrant for interference by this court and that the petition being devoid of merits, deserves to be dismissed. 7. A perusal of the record of the case reveals that the truck belonging to the petitioner carrying the goods (betel nuts), .....

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n called for from the driver, as translated into English reads thus: Upon examining the bill/builty and Form 405 in respect of the goods - betel-nuts being transported in your vehicle No.MH- 40-M-2325, it appears that the goods are being transported from Nagpur to Delhi. However, it has been informed that such goods are to be offloaded at Changodar, Ahmedabad. Hence, you are informed to clarify the same. 8. After issuing the said notice, on the same day, at 03:00 p.m., the impugned detention ord .....

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ng registration No.MH-40-N-2325 (truck no.), therefore, I, the undersigned, has reason to believe that the tax on such goods is or is likely to be evaded the said vehicle was stopped at Changodar Road - (Address) under section 67(6). the notice under section 70(A) in Form 401 was issued and served upon to the transporter viz. Bikaner Asham Rd. (Transporter name), Ahmedabad. In view of the said notice in Form 401, Shri Rais Ahemad, driver of the said vehicle on Bikaner Asham Rd. (transporter name .....

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ransporter could not produced the required document/ information called for under section 70A of the Gujarat Value Added Tax Act, 2003 and thereby failed to produce the same. Therefore, I, the undersigned, having powers vested upon me under section 70A(2) of the Gujarat Value Added Tax Act, 2003, hereby detain the following. (1) The goods loaded in the above vehicle viz. MH 40 N 2325 (truck no) as per Annexure A attached with this order. It may be noted that where no claim is made by any person .....

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order has been passed at 03:00 p.m. on the same day. 10. As can be seen from the impugned detention order, the second respondent has recorded that the notice was served upon the transporter. The record clearly reveals that no notice has been served upon the transporter, viz., the petitioner No.2, but the notice has been issued to the driver of the vehicle, viz., vehicle No.MH-40-M-2325, C/o. Bikaner Asam Roadline, Bikaner. Evidently therefore, the said order has been passed without granting any .....

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arried by him. It is further recorded in the detention order that the transporter could not produce the required documents/ information called for under section 70A of the GVAT Act and thereby, failed to produce the same. As can be seen from the impugned notice, all that the driver was called upon was to explain his statement that the goods were required to be offloaded at Changodar. Thus, the driver was not called upon to produce any documents or information under section 70A of the GVAT Act. M .....

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se of delivery or, transport, to furnish information in respect of such goods, or to permit inspection thereof. Subsection (2) thereof provides that where a person who is required to furnish information or permit inspection of goods or to produce books of accounts, registers or documents, the Commissioner may after giving the person an opportunity of being heard, make an order of detention or seizure of the goods. In the present case, on a perusal of the notice dated 22.03.2016, there is nothing .....

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Changodar, the impugned detention order is totally silent in that regard and proceeds on some other footing that the transporter could not produce the required information called for under section 70A of the GVAT Act. In the opinion of this court, the impugned detention order purportedly made under section 70A of the GVAT Act, leaves a lot to be decided and speaks a volume about the conduct of the officers under the GVAT Act or their lack of knowledge of the statutory provisions. 12. In the imp .....

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s and enter and search the vehicle, vessel or place and inspect the goods and records relating to such goods and elicit such information from the carrier, bailee or any person as is relevant. Sub-section (7) of section 67 of the GVAT Act provides that the provisions of the Code of Criminal Procedure, 1973 relating to searches shall apply, so far as may be, to a search made under sub-sections (5) and (6) of section 67 of the GVAT Act. It is not the case of the second respondent that any procedure .....

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on the driver of the vehicle. Moreover, the time granted to the driver to respond to the notice was only one hour. One fails to understand the haste in which the second respondent acted in the present case and as to why no proper notice could be issued to the second petitioner, if at all any information was required by the respondent authorities. Section 70A of the GVAT Act permits the Commissioner to call upon a person who is in custody of goods of a dealer for the purpose of delivery or, trans .....

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