Statutory basis required for seizure and penalty where challan particulars are alleged to be incomplete in intra-State transport.

A seizure of cotton yarn transported within Uttar Pradesh, together with a proposed penalty notice, was found unsustainable because no statutory provision was identified requiring the challan to state the goods' value for that intra-State movement. The petitioner's ownership of the goods and the intra-State transport were admitted, while the record did not show that the petitioner was the manufacturer or an importer at the relevant time. In the absence of a proved rule or provision imposing the challenged challan requirement, the authority lacked jurisdiction to seize the goods or proceed with penalty action. The writ petition was allowed and the seized cotton yarn was directed to be released.

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Issues: Whether the seizure of cotton yarn and the consequential show-cause notice for penalty were without jurisdiction in the absence of any proved statutory requirement to mention the value of goods in the challan for intra-State transport.

Analysis: The petitioner's ownership of the goods and the fact that the cotton yarn was being transported from Kanpur to Mauranipur within Uttar Pradesh stood admitted. The counter-affidavit did not deny that the petitioner was not the manufacturer, nor did it show that the petitioner was importing the goods at the relevant time. No relevant provision of the U.P. Sales Tax Act or the rules framed thereunder was pointed out to establish that a transporter of goods within the State was bound to mention the value of the goods in the challan. In the absence of such a statutory basis, the seizure and the proposed penalty action could not be sustained.

Conclusion: The seizure and the show-cause notice were held to be without jurisdiction, and the petitioner was entitled to release of the seized cotton yarn and protection against penalty proceedings on that basis.

Final Conclusion: The writ petition was allowed, the impugned action was quashed, and the seized goods were ordered to be released forthwith.

Ratio Decidendi: A seizure or penalty notice cannot be sustained where the authority fails to identify any statutory provision making the omitted challan particulars obligatory for the transaction in question.

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