Court directs State Govt to address non-functioning Tribunal under VAT Act, ensures resolution within 3 months

The Court disposed of the writ petitions challenging a seizure order and security demand under the Uttarakhand VAT Act, 2005, directing the State Government to address the non-functioning of the Commercial Tax Appellate Tribunal. The petitioners, engaged in courier services, argued against VAT liability for goods transported for personal use. Despite the absence of an alternative remedy through appeal, the Court emphasized the need for a functional Tribunal and ordered the State Government to rectify the situation within three months to facilitate timely resolution of appeals, maintaining the interim order during the process.

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Issues:
Challenge to seizure order and demand for security under Uttarakhand VAT Act, 2005; Interpretation of Sections 48 and 53 of the Act; Availability of alternative remedy through appeal to Commercial Tax Appellate Tribunal; Non-functioning of Tribunal leading to filing of writ petitions under Article 226 of the Constitution of India.

Analysis:
The petitioners sought a writ to quash a seizure order dated 30.07.2015 by the Assistant Commissioner of Commercial Tax, Vikas Nagar, Dehradun, confirmed by the Joint Commissioner of Garhwal Region, Haridwar. The petitioner firm, engaged in courier services, challenged the legality of the seizure and security demand of Rs. 7,85,879 at 40% of the goods' value under the Uttarakhand VAT Act, 2005. They argued that as a courier service, they are not involved in the sale or purchase of goods and have service tax registration. The goods transported were for personal use by individuals, not for business purposes, hence VAT liability in Uttarakhand was deemed illegal.

The petitioners contended that Section 48 of the Act regarding import of goods into the state against a declaration did not apply to them as they were not purchasing goods for business purposes. They highlighted the mandatory nature of obtaining a declaration form under Section 48(1) and the irrelevance of this provision to personal buyers. The petitioners emphasized their role as a courier service, separate from the sale or purchase of goods, registered under service tax, making them exempt from VAT liability in Uttarakhand.

Section 53(1) of the Uttarakhand VAT Act, 2005, provided for appeals to the Appellate Tribunal against orders passed under specified sections. However, due to the non-functioning of the Tribunal and the unavailability of a division bench in Uttarakhand, the petitioners resorted to filing writ petitions under Article 226 of the Constitution of India. The Court acknowledged the absence of an alternative remedy and directed the State Government to fill the vacancy in the Commercial Tax Appellate Tribunal to facilitate the hearing of appeals, including those of the petitioner firm, within three months of filing.

In conclusion, the Court disposed of both writ petitions on the basis of the availability of an alternative remedy through appeal to the Commercial Tax Appellate Tribunal. It directed the State Government to address the non-functioning of the Tribunal and ensure timely resolution of appeals, maintaining the interim order passed during the pendency of the appeals. Copies of the order were to be sent to relevant authorities for information and necessary action.

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