Seizure under trade tax law requires statutory material and reasoned belief; a circular cannot replace the Act's conditions.

Seizure of goods under the U.P. Trade Tax Act could not be sustained merely because prior e-mail intimation under a departmental circular had not been sent. The High Court held that the statutory power of seizure required material creating a reasoned belief that the goods were not traceable to a bona fide dealer or were not properly accounted for in books and records; a circular could regulate checking procedure, but could not replace the statutory precondition or override the Act. As there was no finding that the challans were not entered in the accounts and no positive material supporting seizure, the seizure order and the Tribunal's affirmation were set aside and release of the goods was directed.

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Issues: Whether seizure of goods under Section 13-A(1-A) of the U.P. Trade Tax Act was justified merely because the dealer had not sent prior e-mail information as contemplated by Circular No. 5482 dated 31-3-2007.

Analysis: The statutory power of seizure could be exercised only when the officer had reason to believe, on the basis of material, that the goods were not traceable to a bona fide dealer or were not properly accounted for in the dealer's books, registers or other documents. A departmental circular could only regulate the procedure for checking evasion and could raise at best a presumption, but it could not override the Act or substitute the statutory requirement of material giving rise to a bona fide belief. On the facts, there was no finding that the challans were not entered in the books of account, and no positive material was brought to support seizure. The circular also did not, at the relevant time, govern stock transfer in the manner assumed by the authorities.

Conclusion: The seizure was not justified and the order sustaining it was unsustainable.

Final Conclusion: The revision succeeded, the Tribunal's order was set aside, and release of the goods was directed forthwith.

Ratio Decidendi: Seizure of goods under the trade tax statute cannot rest on a mere regulatory circular or presumption of non-entry in accounts; it must be founded on statutory material sufficient to create a reasoned belief that the goods are not traceable to a bona fide dealer or are not properly accounted for.

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