TMI Blog2016 (7) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner's ownership is not established, need not detain us. Firstly, the goods were detained from the petitioner's custody. Secondly, there is no counter claim by any other agency staking claim of ownership over the goods. Thirdly, there is no police complaint alleging that the petitioner is in possession of stolen property. Lastly, the department's anxiety can be taken care of by directing the petitioner to indemnify the department against any claim. The Government Pleader also argued that such sales without payment of local tax might have taken place in the past also. If the department has an angle of seizure of goods for protecting the interest of Revenue, no such formal order has been passed. In absence of any such order, we cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e State of Gujarat and that, therefore, no local tax was to be paid. The department, however, strongly refuted such averments and contended that the investigation reveals that the so-called sellers of Karnataka have denied having sold such goods to the petitioner. Inquiries with the dealers at Himachal Pradesh which were supposed to have received the goods also falsifies the claim of the petitioner. The department, therefore, argued that the order of detention should not be disturbed. Additional element which has come on record through affidavits filed by the respondents is that according to the department, such breaches have been committed by the petitioner on several occasion in the past and goods worth more than 100 crores of rupees may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-section (1) or (2). 4. Likewise, Section 70A of the VAT Act pertains to furnishing of information by others. Sub section (1) thereof provides that the Commissioner may, for the purpose of the Act, by passing order in writing, require any person to furnish information in relation to matters which in his opinion is likely to be useful or relevant in the proceedings under the Act. He may also require any person:- (i) who has custody of goods of a dealer for the purpose of delivery or; transports to furnish information in respect of such goods or to permit inspection thereof, (ii) who maintains or has in his possession any books of accounts, registers or documents relating to the business of a dealer, to produce such books of accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x leviable on such goods as he may direct. 7. Upon our query, learned Government Pleader had submitted before us that ultimately, if it is found that the goods were meant for sale within the State, the department would levy 5% tax and penalty which may be up to one and half times thereof. She had also disputed the valuation of the goods presented by the petitioner on the basis of valuer's report submitted before us, according to which, the total value of the goods inclusive of possible transportation charges comes to ₹ 30 crores (rounded off). This of course, does not include the gross profit at the suggested rate of 10% according to the department's calculation. We are ignoring this element since prima facie it would appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions. Detention of goods for protecting interest of Revenue is a strong measure and can be permitted only on a formal order being passed so that the legality thereof can be examined when questioned. 10. Under the circumstances, the respondents are directed to release the goods in favour of the petitioner upon fulfillment of following conditions: (i) The petitioner shall deposit tax at the rate 5% on the valuation of goods at ₹ 30 crores and also deposit possible penalty at the rate one and half times such tax. This shall be done latest by 25.07.2016. (ii) The deposit to be made as per these conditions shall be adjusted towards possible tax and penalty liability that may arise pursuant to the assessment. (iii) The petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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