High Court Directs Transporter to Deposit Tax and Penalty for Release of Detained Truck

The Gujarat High Court directed the petitioner, a transporter, to deposit the estimated tax amount and penalty for the release of a truck detained for suspected value added tax evasion. The Court relied on section 68(5) of the Value Added Tax Act, requiring the deposit of tax and penalty or suitable security for releasing detained goods. The petitioner was instructed to deposit approximately &8377; 39,000, comprising the possible tax liability and maximum penalty, before authorities for the release of the truck and goods. The petition was disposed of based on these conditions for the release of the detained items.

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Issues: Detention of truck carrying scrap for alleged evasion of value added tax.

In this judgment by the Gujarat High Court, the petitioner, a transporter, had their truck detained at a mobile checkpost on suspicion of evading value added tax. The respondent authorities detained the truck due to serious discrepancies in the documents carried by the driver, including the cancellation of the dealer's registration mentioned in the documents. The authorities estimated the value of the goods at approximately &8377; 3,18,163/. The petitioner, through their counsel, expressed willingness to deposit the entire possible tax amount along with a maximum penalty of 150% of the basic tax for the release of the truck and goods.

The Court, considering the circumstances, imposed a condition on the petitioner to deposit the entire possible tax amount with the maximum penalty. The Court referred to section 68(5) of the Value Added Tax Act, granting the Deputy Commissioner the power to release detained goods pending assessment upon the condition of depositing tax and penalty or providing suitable security. The Court calculated a possible tax liability of approximately &8377; 16,000/ at 5% and a maximum penalty of approximately &8377; 24,000/ at 1 and 1/2 times the duty, totaling &8377; 39,000/. The petitioner was directed to deposit this sum before the authorities for the release of the truck and goods, subject to final assessment and adjustment of the deposited amount towards the duty and penalty liability.

Ultimately, the petition was disposed of in accordance with the conditions set by the Court for the release of the truck and goods detained at the checkpost.

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