High Court overturns seizure of goods in transit, rules legality not tied to trade tax registration

The High Court of Allahabad set aside the tribunal order and seizure of goods during transportation from Delhi to West Bengal, ruling that the seizure based on non-existing consignor and consignee was unjustified. The Court held that the legality of seizure does not depend on the registration of consignor and consignee with trade tax authorities. Consequently, the revisionists' appeal was allowed, and the seized goods were ordered to be released without any security requirement. The revenue's appeal was dismissed.

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Issues involved: Seizure of goods during transportation, legality of seizure, demand of security, relevance of consignor and consignee registration.

Summary:

The High Court of Allahabad heard two revisions arising from the same tribunal order dated 27.9.1993 regarding the seizure of goods being transported from Delhi to West Bengal. The revisionists, who were purchasers of the goods, were intercepted in the State of U.P. and a seizure order was passed on 4th September, 2013. Despite failed representation and appeal, the security demanded for the release of goods was reduced. The revisionists contended that the seizure was illegal and unjustified.

The Court noted that the goods were seized based on the opinion that the consignor and consignee were non-existing and not genuine. However, it was established through previous decisions that the existence or registration of consignor and consignee with trade tax authorities is not relevant for seizing goods in transit. The purpose of the transit declaration form is to prevent the evasion of trade tax by ensuring that goods entering the State of U.P. are not sold within the State.

Therefore, the Court held that if the transit declaration form and accompanying documents are in order, the seizure cannot be justified merely on the grounds of non-existing consignor or consignee. Consequently, the tribunal order and the seizure order were set aside, directing the immediate release of seized goods without any security requirement.

As a result, Sales/Trade Tax Revision No.777 of 2013 filed by the revisionists was allowed, while Sales/Trade Tax Revision No.764 of 2013 filed by the revenue was dismissed.

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