Court upholds seizure of goods & vehicles under Bihar VAT Act for non-compliance. Penalties imposed.

Supreme Road Transport (P.) Ltd. Versus State of Bihar

Supreme Road Transport (P.) Ltd. Versus State of Bihar - [2015] 80 VST 277 (Pat) Issues Involved:
1. Seizure of goods and vehicles under Section 60(2) of the Bihar Value Added Tax Act, 2005.
2. Imposition of penalty under Sections 60(4)(a) and 60(4)(b) read with Section 56(4)(b) of the 2005 Act.
3. Constitutional validity of Section 60(4) of the 2005 Act.
4. Validity of Notifications dated 4th July 2012, 12th July 2012, and 30th October 2012 issued by the Commissioner of Commercial Taxes.
5. Requirement of publication of notifications in the Official Gazette.

Detailed Analysis:

1. Seizure of Goods and Vehicles:
The petitioners, transporters, challenged the seizure of goods in transit and vehicles for alleged violations under Section 60(2) of the Bihar Value Added Tax Act, 2005. The court noted that the drivers failed to produce true and complete particulars as required by Rule 40 of the Bihar Value Added Tax Rules, 2005. This failure led to the seizure of goods and vehicles by the authorities, who acted under Section 60(4) read with Section 56(4) of the 2005 Act. The court upheld the seizure, stating that the authorities acted within their powers to prevent tax evasion.

2. Imposition of Penalty:
The authorities imposed penalties three times the amount of Value Added Tax assessed on the goods for failure to provide accurate information. The court emphasized that the failure to make true and complete disclosure gave rise to a statutory presumption of intention to avoid tax. Consequently, the authorities were justified in seizing the goods and vehicles and imposing penalties as mandated by Section 60(4) read with Section 56(4) of the 2005 Act.

3. Constitutional Validity of Section 60(4):
The petitioners argued that Section 60(4) violated Articles 301 and 304(b) of the Constitution, as it imposed restrictions on the free movement of goods. The court rejected this argument, stating that the provision was enacted to prevent tax evasion and did not impose an unreasonable restriction on trade. The court held that the statutory presumption of intention to avoid tax justified the imposition of penalties and seizure of goods and vehicles. Therefore, Section 60(4) was not ultra vires Articles 301, 303, or 304(b) of the Constitution.

4. Validity of Notifications:
The petitioners challenged the validity of the Notifications dated 4th July 2012, 12th July 2012, and 30th October 2012, arguing that they were not published in the Official Gazette as required. The court noted that the Notifications were operational instructions for generating "Suvidha" and did not affect the substantive or procedural provisions of the Act. Despite the failure to publish these Notifications in the Official Gazette, the court held that the impugned actions of seizure and penalty were valid, as the drivers had generated and filed "Suvidha" forms.

5. Requirement of Publication in the Official Gazette:
The court emphasized that the publication of Notifications in the Official Gazette was mandatory under Section 2(u) of the 2005 Act and Section 28 of the Bihar & Orissa General Clauses Act, 1917. However, it held that the failure to publish the Notifications in the Official Gazette did not invalidate the actions taken by the authorities, as the Notifications were operational and had been acted upon.

Conclusion:
The court dismissed the writ petitions, upholding the constitutional validity of Section 60(4) of the Bihar Value Added Tax Act, 2005, and the Notifications dated 4th July 2012, 12th July 2012, and 30th October 2012. It clarified that the individual actions of seizure and penalty were not examined on merits. The court also noted that the petitioners had an alternative statutory remedy of appeal under Section 72 of the 2005 Act.