2012 (4) TMI 585 - HC - VAT and Sales Tax

Court overturns seizure of imported goods in U.P. due to missing Form-38, orders immediate release.

The court overturned the seizure of goods imported in the State of U.P. due to the absence of import declaration Form -38 as mandated by Section 50 of the ... Seizure of goods for non-production of import declaration Form-38 - show cause notice under Section 50(4) of the U.P. Value Added Tax Act, 2008 - production of original Form-38 in response to show cause notice - obligation to consider explanation and documents before ordering seizure - release of goods without security where discrepancy is removedSeizure of goods for non-production of import declaration Form-38 - production of original Form-38 in response to show cause notice - obligation to consider explanation and documents before ordering seizure - Validity of seizure of goods where the original import declaration Form-38, not found at time of checking, was subsequently produced in response to the show cause notice before the seizure order was passed. - HELD THAT: - At the time of checking the consignment the driver did not have Form-38. A show cause notice was issued under Section 50(4) and, in response, the revisionists submitted the original Form-38 dated 27.3.2012 before the seizure order was passed. The genuineness of the Form-38 was not disputed. The purpose of a show cause notice under Section 50(4) is to afford the party an opportunity both to explain why security should not be demanded and why the goods should not be seized. Where a party produces the necessary documents in response to that notice so as to remove the discrepancy found at the time of checking, the authorities are legally bound to consider those documents before ordering seizure. The seizure in the present case was ordered without giving effect to the Form-38 thus produced; on earlier similar facts this Court held seizure and demand of security unjustified. Applying that principle, the seizure order cannot be sustained.Impugned orders of seizure and the tribunal order upholding them are set aside and the goods are directed to be released forthwith without any security.Final Conclusion: Revision allowed; seizure set aside and goods ordered released immediately without security as the original Form-38 produced in response to the show cause notice removed the ground for seizure. Issues involved: Seizure of goods imported in the State of U.P. due to absence of import declaration Form -38 as per Section 50 of the U.P. Value Added Tax Act, 2008.Summary:The consignment of goods imported in the State of U.P. from Kolkata was detained on 31.3.2012, leading to the seizure of goods on 2.4.2012 after a show cause notice. The revisionists filed a representation under Section 48 (7) of the Act, which partially reduced the cash security demanded. Unsatisfied, they appealed to the tribunal, resulting in dismissal on 18th April 2012. Subsequently, a revision was filed under Section 58 of the Act challenging the orders.The goods were seized for not having the required import declaration Form -38 as mandated by Section 50 of the Act. Despite the absence of Form -38 during the initial check, the revisionists submitted the form on 2.4.2012, explaining that it was inadvertently left behind despite being obtained on 27.3.2012. The genuineness of the submitted Form-38 was not disputed. The purpose of issuing a show cause notice under Section 50 (4) is to provide an opportunity for the concerned party to rectify any discrepancies found during inspection before goods are seized.Referring to a previous case, it was established that if the necessary documentation, like the import declaration Form, is produced in response to a show cause notice before the seizure order is passed, the seizure of goods and demand for security are not justified. The current case aligns with this precedent. Therefore, as the authorities did not consider the impact of the submitted Form-38, the order of seizure was deemed legally unsustainable and was set aside.Consequently, the impugned orders from 2.4.2012, 31.3.2012, and 18.4.2012 were overturned, directing the immediate release of the goods without any security requirement. The revision was allowed.