The Commissioner, Commercial Tax vs S/S. Param Dairy Ltd.

Ashwani Kumar Mishra, J.—This revision is by the revenue, questioning an order passed by the Tribunal, whereby the orders passed by the authorities have been interfered with and the assessee''s goods are directed to be released without any security.

The ground of challenge essentially is to the effect that the revenue is entitled to proceed, in accordance with Section 50 of the U.P. Value Added Tax Act against the assessee and in case the goods are released without security, the interest of the revenue would be adversely affected.

From the facts appearing on records, it transpires that the assessee has a manufacturing unit at Bulandshahar known as ''M/s. Param Dairay Limited'' Khurja. It had sent 15000 Kg. Skimmed Milk Powder on 1.1.2017 through Subham Career Pvt. Ltd. Delhi, for being transported to Raipur at Chhattisgarh. The vehicle was intercepted on 3.1.2017 and authorities found that the vehicle had crossed Shri Nagar Toll Plaza, at Haryana U.P. Border on 2.1.2017, in loaded condition, and, therefore, the authorities were of the opinion that goods were being brought in from Haryana and had not been loaded in U.P. The assessee submitted its contention that the driver of the vehicle went with loaded truck to his village at Janghawali Shergarh Bangar, District Mathura to attend his ailing child and, therefore, he had diverted from the route, and had entered into Haryana. The explanation, so submitted by the assessee, was not accepted and a direction was issued to release the goods only after deposit of Rs. 7,56,000/- by the assessee. First Appeal filed was also rejected. The Tribunal, however, in Second Appeal, has accepted the claim of the assessee and has directed release of goods without any security, which is questioned here.

Learned Standing Counsel submits that in the facts and circumstances of the case, there was bona fide material available on record before the authorities to proceed under Section 50 of the Act, against the assessee and for such purpose, the State was within its right to require the assessee to deposit the amount which could be levied as penalty. This submission is opposed by Sri Piyush Agrawal, appearing for the assessee.

I have heard learned counsel for the parties and have perused the materials available on record.

The certificate of registration of the assessee has been brought on record. According to it assessee has its office at various places, including at Haryana. It is not in dispute that the vehicle had entered from Haryana to U.P. on 2.1.2017. In such circumstances, the authorities came to a conclusion that the proceedings under Section 50 of the Act could be initiated against the applicant, as assessee was bringing goods without paying tax. No exception could be taken to it. Whether necessary ingredients to impose any penalty under Section 50 of the Act was made out or not, would be examined in appropriate proceedings and any observation, in that regard, is not warranted, as it may prejudice the case of either of the parties. Nevertheless, it cannot be doubted that there was some material, on the basis of which, the State could proceed in accordance with law, against the assessee. If that be so, the State was entitled to insist upon deposit of amount so that in the event any penalty is imposed, the same could be recovered. The assessee, herein, is admittedly a registered dealer in U.P. In such circumstances, the authorities could have insisted upon the assessee to furnish an indemnity bond and goods could have been released subject to appropriate proceedings drawn, in accordance with law. The Tribunal is not justified in directing release of goods without any security. The question formulated in the present revision is answered accordingly, by providing that it would be lawful for the authorities to release the goods of the applicant, upon furnishing of an indemnity bond by the assessee, subject to appropriate proceedings, which may be drawn, in accordance with law.

With the aforesaid observations, revision stands disposed of.