Invalid seizure of goods under VAT law where appeal was timely and limitation period had not expired

Goods could not be seized under sections 68 and 69 of the Gujarat Value Added Tax Act, 2003 where the assessment order had already been passed, the appeal was filed within the prescribed limitation period, and the seizure was effected before expiry of the section 73(4) limitation period. The seizure order was based on alleged tax default, but the statutory conditions for invoking the seizure power were not satisfied on these facts. The Gujarat High Court therefore held the seizure invalid and quashed the order in favour of the assessee.

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Issues: Whether the seizure of goods under sections 68 and 69 of the Gujarat Value Added Tax Act, 2003 was valid when the assessment order had been passed, the appeal had been filed within the prescribed period of limitation, and the seizure was made before expiry of the limitation period under section 73(4) of the Act.

Analysis: The order of seizure rested on the petitioner's alleged default in payment of tax, but the seizure was expressly made under sections 68 and 69 of the Act. The assessment order had been passed on 31/3/2015, the appeal was filed on 27/5/2015 within the statutory period, and the goods had already been released pursuant to interim relief. In these circumstances, the authority could not invoke sections 68 and 69 to seize the goods before expiry of the limitation period prescribed under section 73(4) of the Act.

Conclusion: The seizure order was invalid and was quashed and set aside, in favour of the assessee.

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