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TRAFIGURA INDIA PRIVATE LIMITED Versus STATE OF GUJARAT AND 4

2016 (9) TMI 614 - GUJARAT HIGH COURT

Release of attachment of goods - Section 45(1) of the VAT Act - non-ferrous metals - aluminium - lead - zinc - copper - nickel - customs bonded warehouse - VAT liability - Held that: - In terms of Section 45(1) of the VAT Act, the competent authority undoubtedly has the power of provisional attachment where during the pendency of any proceedings of assessment or re-assessment of turnover escaping assessment, he is of the opinion that for the purpose of protecting the interest of Revenue, it is n .....

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el Cathode - Nickel Full Plates - Held that: - there is no mismatch in the goods brought by the petitioner from abroad and that is sold to the Indian customers. Minor difference in description of the goods in two sets of documents can be attributed to different but synonymous terms being used by the same set of goods. - The petitioner keeping the bank guarantee of ₹ 30 crores in favour of the department alive till the assessments are framed and subject to the orders contained therein, .....

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the petition. The petitioner, a company registered under the Companies Act, has challenged the action of the Value Added Tax Authorities in attaching the goods of the petitioner on the allegation that the petitioner has avoided payment of duty on clearances worth crores of rupees. In particular, the petitioner has challenged an order dated 18.03.2016, as modified by a later order dated 24.06.2016, passed by the Commercial Tax Officer under Section 45(1) of the VAT Act. 2. Brief facts are as und .....

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anding, are stored in customs bonded warehouse situated at Gandhidham. From there the petitioner sales such goods to the domestic buyers. According to the petitioner, the sale takes place at the bounded warehouse and, therefore, outside the territory of India. The petitioner points out that there is always an agreement between the petitioner and the purchasers in India to transfer the goods under an Ex-bond agreement. It is only after said transfer in title that the goods are brought within the .....

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Section 45(1) of the VAT Act. In such order, the authority observed that for the years 2012-13 to 2015-16 there is a possible liability of tax, interest and penalty of ₹ 50 crores against the petitioner. To secure the interest of the Revenue, therefore, such provisional attachment is ordered. It appears that since the petitioner desired to clear the goods which were under attachment, it negotiated with the authorities and was allowed to lift the goods worth ₹ 30 crores upon offering .....

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led. 5. Counsel for the petitioner submitted that the petitioner has not breached any of the provisions of the VAT Act. The goods are supplied by the foreign supplier to the petitioner. Upon arrival, the goods are stored in bonded warehouse. The transfer in title takes place at such warehouse in favour of the buyers in India. There is no liability to pay VAT on such sale. The authorities have, therefore, committed a serious error in attaching the goods on the ground that the petitioner has evade .....

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art, in this respect, is filed on record to demonstrate that there is discrepancy in the description of the goods in these two sets of documents. For example, it is pointed out that in the goods stored in the bonded warehouse, the description carried was Nickel Cathode whereas the same goods when sold to Indian customers carried the description Nickel Full Plates . 7. In response to such contention of the learned AGP, petitioner had filed a rejoinder statement alongwith which, voluminous documen .....

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and, in any case, minor changes would not change the basic character of the goods nor would they be classifiable under different headings. In any case, counsel for the petitioner would argue, this would not result into any VAT liability. 8. In terms of Section 45(1) of the VAT Act, the competent authority undoubtedly has the power of provisional attachment where during the pendency of any proceedings of assessment or re-assessment of turnover escaping assessment, he is of the opinion that for th .....

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