VAT security demand for goods in transit set aside where documents were complete and no tax evasion was shown

Security could not be demanded under the VAT law for goods in transit where the consignments were supported by invoice, weighment slip, gate pass, import form and trip sheet, and the import details had also been uploaded on the departmental website. The later assessment accepted the sale and purchase documents and finalised the transaction, and no material showed an intent to evade tax. On these facts, the demand of security under Section 48 was held unsustainable.

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Issues: Whether security could be demanded under the VAT law in respect of goods in transit when the accompanying documents were available and later accepted in assessment.

Analysis: The goods were accompanied by invoice, weighment slip, gate pass, import form and trip sheet, and the information relating to the import had been uploaded on the departmental website. The subsequent assessment order accepted the sale and purchase documents and finalized the transaction, and no material was shown to establish an intention to evade tax. In these circumstances, the demand of security under Section 48 was not justified.

Conclusion: The security demand was unsustainable and the revision succeeded.

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