TaxTMI 
TaxTMI 
2011 (8) TMI 1013
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.... sheet arid/or log book as prescribed under section 48(b) of the VAT Act. Oil extracted from the seed of pingamia pinnata (in vernacular, kanuga). The petitioner's authorized representative (AR) appeared before the respondent on May 10, 2011. As there was urgency to meet the requirement of supply of veterinary medicines to the Animal Husbandry Department, the AR got the vehicle and the goods released by paying Rs. 22,056 towards tax and penalty. A show-cause notice dated May 10, 2011 was issued by the respondent calling upon the petitioner to file objections for the assessment of tax at four per cent on the value of the goods. Another show-cause notice was issued on the same date proposing to levy penalty, equivalent to two times of the tax due, under section 45(7) of the VAT Act. The AR gave a consent letter admitting lapse, and expressing willingness to pay the tax and penalty. Accordingly two separate orders were passed on the same day: one levying an amount of Rs. 7,352 towards tax at four per cent on the value of the goods, and the other levying penalty of Rs. 14,704. In this writ petition, the petitioner seeks a writ of mandamus to declare the action of the respondent, ....
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....llection of tax and penalty, by the respondent, is highly arbitrary as deprecated by the judgment of a Full Bench of this court in Ambica Lamp House v. Commercial Tax Officer (Int)-I [2005] 142 STC 551 (AP); [2005] (2) ALD 704; [2005] 3 ALT 190. Per contra, the Special Counsel for Commercial Taxes submits that the levy of the tax and penalty was preceded by the notices as contemplated under section 45(7) of the VAT Act; the AR received the show-cause notice but gave a consent letter expressing willingness to pay the tax and penalty; and, therefore, the action of the respondent is not tainted with any illegality. The facts are not in serious dispute. The petitioner was transporting Pongamia oil from Gowribidanur of Karnataka to Bapatla. It was checked on May 9, 2011 at Madanapalle, and it was found that the driver was not carrying the records of the goods vehicle, advance way-bill in duplicate as required under section 45 (2) (b) and section 48 of the VAT Act. The respondent issued show-cause notice bearing GC No. 36/11-12, dated May 10, 2011. On the same day, the assessment order was passed. In addition, the respondent also issued a penalty show-cause notice bearing POR/36/2011-12....
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....the goods vehicle to stop the vehicle at the check-post for the purpose of preventing evasion of tax, the consequences that would follow for non-production of documents in proof of payment of tax and other matters. An analysis of section 45 of the VAT Act would reveal the following. The Government or the Commissioner, with a view to prevent or check evasion of tax in the State, may, by notification, direct the setting up of a check-post or the erection of a barrier, or both, at such place or places as may be notified. While passing the check-post the driver or any other person in-charge of the goods vehicle shall stop the vehicle, and shall keep it stationary as long as may be necessary, and allow the officer in-charge of the check-post to examine the contents in the vehicle and inspect all the records relating to the goods carriage, which are in the possession of such driver or the person for the purpose of ascertaining whether the goods are taxable, and whether tax has been paid thereon. When the vehicle is checked with this object two things are possible, namely, (i) the tax payable had been paid, and (ii) the tax payable is not paid. These two situations are dealt with by subse....
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.... forthwith (section 45(4) of the VAT Act). If tax is not paid or security is not furnished, as per section 45(6) of the VAT Act, the officer-in-charge of the check-post shall detain only so much of the goods as are approximately equal in value to the amount of the tax directed to be paid or security directed to be furnished, as long as may reasonably be necessary. In. case the goods are to be detained for more than three days, the check-post officer shall have to obtain permission from the next higher authority. At this stage, it is relevant to read section 45(7) of the VAT Act. It reads as follows: "45. Establishment of check-posts.- (1) to (6) ... (7) (a) Where goods are carried without paying tax, if any, payable or goods are carried without being properly accounted for in the documents referred to in clause (b) of sub-section (2), the said officer shall collect the tax payable on the goods so carried and in addition levy a penalty not exceeding two times the amount of tax payable on such goods after giving a reasonable opportunity to the person likely to be affected, against the proposed penalty; (b) Any such officer ....
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.... of the sale or purchase of the goods carried. Even in such a situation, if the driver or person in-charge of the goods is willing to pay "such tax" (which means, provisionally assessed tax) or to furnish security, the goods cannot be detained. They shall be released and the procedure as contemplated in rule 56 of the VAT Rules shall be followed. Even when there is a necessity to levy penalty, the officer shall afford "reasonable opportunity to the person likely to be affected". If the tax is paid for the purpose of release of the goods, or security is furnished, the proceedings under section 45(7) of the VAT Act for levy of penalty need not be taken in a hurried manner. Even in case of non-payment of tax or non-production of documents, as contemplated under section 48 of the VAT Act read with rule 55 of the VAT Rules or in the case of non-production of documents relating to the sale or purchase of the goods carried on, the dealer may have an acceptable defence to put forth. The driver or person-in-charge of the vehicle cannot be imputed with the knowledge about these objections. The legislation, in its wisdom, requires the authorized officer at the check-post to release the vehicl....