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A.K. International Metal Merchant and Commission Agent and anr. Vs. State of U.P. and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAllahabad High Court
Decided On
Case NumberWrit Petition No. 971 of 1984
Judge
Reported in[1985]60STC83(All)
AppellantA.K. International Metal Merchant and Commission Agent and anr.
RespondentState of U.P. and ors.
DispositionPetition allowed
Excerpt:
- .....the petitioners to furnish security in the sum representing forty per cent of the value of the goods seized. it is this order, a copy whereof has been filed as annexure x to the writ petition, which is sought to be quashed under article 226 of the constitution of india.2. it has been urged by counsel for the petitioners that even on the finding recorded by the assistant commissioner, the petitioner could not be required to furnish security in the sum representing forty per cent of the value of the goods seized. since the nature of the breach said to have been committed by the petitioners is stated in the impugned order itself, the question as to what would be the maximum penalty imposable on the petitioners even if it is ultimately established that the petitioners have committed the.....
Judgment:

N.D. Ojha, J.

1. Certain goods belonging to the petitioners which were being transported from Mathura to Moradabad on a truck were seized on 10th July, 1984. The petitioners made an application before the Assistant Commissioner (Executive), Sales Tax, Moradabad Range, Moradabad under Section 13-A(6) of the Uttar Pradesh Sales Tax Act (hereinafter referred to as the Act) for release of those goods on furnishing adequate security. The Assistant Commissioner by his order dated 3rd September, 1984 required the petitioners to furnish security in the sum representing forty per cent of the value of the goods seized. It is this order, a copy whereof has been filed as annexure X to the writ petition, which is sought to be quashed under Article 226 of the Constitution of India.

2. It has been urged by counsel for the petitioners that even on the finding recorded by the Assistant Commissioner, the petitioner could not be required to furnish security in the sum representing forty per cent of the value of the goods seized. Since the nature of the breach said to have been committed by the petitioners is stated in the impugned order itself, the question as to what would be the maximum penalty imposable on the petitioners even if it is ultimately established that the petitioners have committed the alleged breach is a question of law to be determined with reference to the provisions of the Act.

3. In this view of the matter, we are of the opinion that it is a fit case which may be finally disposed of at this very stage as contemplated by the second proviso to Rule 2 of Chapter XXII of the Rules of the Court. The respondents are already served and represented by the Standing Counsel and there is no other party to be served. We have accordingly heard counsel for the petitioners and the Standing Counsel on the merits of the writ petition.

4. In the impugned order, the Assistant Commissioner has stated that the petitioners have not correctly entered the details of the goods in their books of account. This is the breach in connection with which the goods of the petitioner's have been seized. The Assistant Commissioner has taken the view that penalty in regard to this breach is imposable at forty per cent of the value of the goods seized other than 70 bags of dross.

5. Penalty in the sum representing forty per cent of the value of the goods is imposable under Clause (ix) of Section 15-A(1) of the Act which contemplates a case referred to in Clause (o) or (q) of the said section. The Standing Counsel has not been able to substantiate that the instant case is covered either under Clause (o) or Clause (q) of Section 15-A(1) of the Act. The Assistant Commissioner was, therefore, apparently in error in requiring the petitioners to furnish security in the sum representing forty per cent of the value of the goods seized. As seen above, the breach said to have been committed by the petitioners is of not maintaining proper accounts in regard to the goods in question. This breach, in our opinion, is covered by Clause (d) of Section 15-A(1), which reads 'has maintained or produced false accounts, registers or documents; or'. To such a breach, Clause (ii) of Section 15-A(1) is applicable, which reads, (ii) in a case referred to in Clause (c), Clause (d) Clause (1) or Clause (m), a sum of not less then fifty per cent, but not exceeding one and one half times, of the amount of tax which would thereby have been avoided. Security as contemplated by Section 13-A(6) is taken for safeguarding the recovery of the penalty, which may ultimately be imposed in connection with the seized goods. On the facts of the instant case, it is apparent that the maximum penalty which could be imposed on the petitioners, if the alleged breach on their part is established, would be the amount representing one and one half times of the amount of tax. This sum has to be determined by the Assistant Commissioner.

6. In the result, the writ petition succeeds and is allowed and the impugned order dated 3rd September, 1984 passed by the Assistant Commissioner (Executive), Sales Tax, Moradabad Range, Moradabad, respondent No. 2, except in so far as it directs the release of 70 bags of dross without furnishing any security, is quashed and he is directed to determine afresh. In accordance with law and keeping in mind the observations made above, the amount of security to be furnished by the petitioner for getting the remaining seized goods released.


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