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ROYAL TRANSPORT COMPANY Versus STATE OF GUJARAT AND 1

2016 (7) TMI 791 - GUJARAT HIGH COURT

Detention of consignment of betel nuts - proof of ownership of goods - Case of the petitioner is that the goods were in the process of transportation outside the 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 .....

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'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 permit the department to continue to hold custody of the goods on mere apprehensions. Detention o .....

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DER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Facts are similar in nature. We may record facts from Special Civil Application No. 9553 of 2016. The petitioner is a transport company. According to the petitioner, the petitioner was in the process of transporting betel nuts from Karnataka to Himachal Pradesh. In the process, such goods were stored in godowns at Ahmedabad when the State VAT authorities intervened and have passed an order on 17.05.2016 detaining such goods. Perusal of the order .....

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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 h .....

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itioner. Counsel for the petitioners submitted that the goods are perishable and quality would deteriorate. Assessments by the department may take a long time. The goods may therefore be released on appropriate condition. 3. Having heard learned counsel for the parties and having perused the documents on record, we notice that Section 70 of the VAT Act pertains to furnishing of information by owners of cold storage, warehouse, godowns etc. Sub-section (3) thereof reads as under: 70 (3) If any ow .....

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f penalty not exceeding the amount of tax leviable on the goods in respect of which default is committed under sub-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 m .....

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wing manner: (2) Where a person who is required to furnish information or permit inspection of goods or to produce books of accounts, registers or documents for inspection under clause (a) or (b) of sub section (1), fails to furnish information or to permit inspection 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 or, as the case may be, the books of accounts, .....

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erson under any other provision of the Act, after giving an opportunity of being heard, impose a penalty of a sum not exceeding ₹ 25000/-. Under sub section (6) of Section 70A, the Commissioner may release the goods or documents if the person concerned pays by way of penalty such sum not exceeding one and a half times the amount of tax 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 good .....

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partment's calculation. We are ignoring this element since prima facie it would appear that the market value of the goods would include the profit element of the dealer. As noted, under sub section (6) of Section 70A, the Commissioner would release the goods upon the person, who committed breach of his directions under sub section (1) of Section 70A, shows willingness to pay penalty upto one and a half times the tax payable under the Act as the Commissioner may direct. In the present case, s .....

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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. 9. 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 cann .....

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