Court Orders Release of Seized Goods Upon Payment

The Court ordered the release of seized goods upon the petitioner's payment of Rs. 5,69,989 towards tax, penalty, and interest, along with proving ownership to the appropriate authority. The Court ruled in favor of the petitioner, directing the respondents to release the goods as keeping them under seizure served no purpose once the liability was settled. The petition succeeded partially, with the Court making the rule absolute for compliance with the order.

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Issues:
Petition under Article 226 of the Constitution of India seeking to quash an impugned memo of seizure and release goods on payment of VAT liability.

Analysis:
The petitioner, the original owner of seized goods, filed a petition under Article 226 of the Constitution of India to challenge the memo of seizure issued by respondent No.5 on 28.12.2014. The petitioner sought the release of goods in Truck No.RJ141G-4047 upon payment of VAT liability. The petitioner's advocate stated that the transaction with the purchaser had been canceled, and the petitioner had not received any sale consideration. The petitioner expressed readiness to pay the tax, interest, and penalty under the Gujarat Value Added Tax Act, amounting to Rs. 5,69,989. An undertaking was filed by the petitioner's authorized signatory accepting the liability to pay this amount. The petitioner requested the release of goods worth approximately Rs. 44 lakhs upon payment of the VAT liability.

The respondent's Assistant Government Pleader initially opposed the petition citing suppression of facts and petitioner's conduct but later agreed that the petitioner should pay the tax, penalty, and interest leviable under the VAT Act. The respondent did not contest the petitioner's readiness to pay the amount.

Upon hearing both parties, the Court noted that the goods were seized due to noncompliance with VAT Act provisions, even though they were sold to M/s. Saloni Trading Company. The Court acknowledged the petitioner's willingness to deposit the maximum liability of Rs. 5,69,989 towards tax, penalty, and interest. The affidavit from the owner of M/s. Saloni Trading Company confirmed they did not purchase goods from the petitioner, establishing the petitioner's ownership of the seized goods. Consequently, the Court directed the release of the seized goods upon the petitioner unconditionally depositing Rs. 5,69,989 and proving ownership to the appropriate authority. The Court ruled that keeping the goods under seizure served no purpose once the liability was settled, and thus, the petition succeeded partially.

In conclusion, the Court ordered the respondents to release the seized goods upon the petitioner's payment of Rs. 5,69,989 towards tax, penalty, and interest, along with establishing ownership to the appropriate authority. The Court made the rule absolute, permitting direct service for compliance with the order.

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