HIGH COURTS
MADRAS HIGH COURT
National Asphalt Products and
Construction Co.
v.
State of Tamil Nadu
[M.S. Ramesh, J]
W.P. NO. 11574 OF 2006 AND WPMP No.13190 of 2006
Date of Decision: September 2, 2020
Penalty—Non payment of Entry tax—No payment of Entry tax on import of heavy road vehicles as per prevailing law—Later levy of Entry tax upheld by Apex court on such imports—Penalty imposed—writ filed—Bonafides observed on part of petitioner in paying Entry tax on demand—Therefore, penalty not justified
The petitioner had imported heavy road laying vehicles and had not paid the entry tax in view of the prevailing law that time. Subsequently, the levy of entry tax on imported vehicles was upheld by the Supreme Court in the case of State of Kerala and others vs FR. William Fernandez and others. A notice has been issued proposing to levy penalty as per Sec.15 of the Entry Tax Act, 1990. Hence, a writ is filed in this regard. It is held that there is no fault with the petitioner not paying entry tax at that time. When the enforcement wing insisted for payment, the petitioner immediately paid the entry tax on the same day itself. Where there are bonafides on part of the importer in referring from paying the tax, the penalty is not justified. The petition is allowed.
PUNJAB AND HARYANA HIGH COURT
UFV India Global Education
v.
Union of India & Ors.
[Rakesh Kumar Jain & Ashok Kumar Verma]
CWP NO.11961 OF 2020 (O&M)
Date of Decision: September 9, 2020
Attachment of bank account under CGST Act—Scope of section 83—Proceedings under section 67 over—Held effect of S. 83 ended after proceedings u/s. 67 of the Act were over—pendency of the relevant sections is sine non quo—account ordered to be released.
The officers of the DGGSTI had visited the premises of the petitioner taking access of all required documents. The bank account was provisionally attached U/s 83 of CGST Act, 2017. The petitioners had filed objections to it after which the Bank account was partly released for payments under Amenity Scheme. A writ is filed contending that the order of the provisional attachment has been passed U/s 83 of the Act on account of launching of proceedings u/s 67 of the Act and it is argued that proceedings U/Sec.67 were over and now proceedings either U/s 63 or Sec/74 were initiated, therefore, the attachment order u/s 83 has become redundant. It is held that effect of Sec.83 of the Act comes to an end as soon as the proceedings pending under the above mentioned sections are over because pendency of the proceedings is the sine qua non and if the Commissioner was of the opinion that it is necessary to do in the interest of government revenue it can pass an order in writing to attach any bank account if the proceedings are over. Therefore, the order passed by the respondent is patently illegal. The bank account of the petitioner is ordered to be released.
DELHI HIGH COURT
Manufacturers Traders Association & Anr.
v.
Union of India & Ors.
[Manmohan & Sanjeev Narula,JJ]
WP(c): 597/2019
Date of Decision: September 15, 2020
Rate of tax—Fabrics—Decision of GST council—Writ filed seeking direction to government for notifying rate on fabrics @5% in view of recommendation made by GST council—Contention raised that notifications issued stood in contradiction with the decision of GST council—held, GST council confirmed the rate to be 12% for fabrics falling under falling under chapters 56 to 59 of Customs Tariff— response of Union Finance minister over a query stating the said rate at 5% cannot prevail over the decision of GST council—GST rates must be notified in consonance with recommendations of council—petition dismissed
A writ is filed by the society of petitioners engaged in manufacturing of fabric seeking a direction for the government to notify GST rate @5% for all varieties of fabrics falling under Chapters 50 to 63 of Customs Tariff in furtherance of recommendation made by GST council in its 15th meeting. It is contended that the three notifications issued by the central and state government under CGST, IGST and State GST regarding the rate of tax are in contradiction with the recommendations made by the council.
The GST council had confirmed that it had recommended the GST rate of 12% for the fabrics falling under Chapters 56 to 59 of customs Tariff. Though the petitioner contends that the Union Finance Minister had replied to a starred question in Rajya sabha earlier as per which the said rate was to be 5%. However, the response of the union minister over a query cannot prevail over the decision of GST council. GST council is a constitutional body and is the highest deliberative forum to resolve issues of GST. The GST rates must be notified in consonance with recommendations of council. They are jointly decided by the states and centre on recommendations made. The petition is dismissed.
KERALA HIGH COURT
Rajive and Company,
v.
The Assistant Commissioner, Special Circle, State GST Department
[K. Vinod Chandran & T.R. Ravi, JJ]
WRIT APPEAL NOS.1185/2020, 1196/2020 AND 1224/2020
Date of Decision: September 17, 2020
Transfer of case—raid conducted at branch office at city ‘x’ by tax officer—petitioner filed a writ for transferring the case to an officer in city ‘y’ for the reason of covid 19 and voluminous books of accounts kept at its head office at ‘y’— petition dismissed in view of section 35 of the CGST Act and KGST Act making it mandatory to maintain books at business premises itself—appellant not permitted to have choice of officer—books can be made available in digital format
The State Tax Officer conducted raids in business premises at Ernakulam. The petitioner has its head office at Kollam where the petitioner voluminous documents are kept. This writ is filed with the prayer that the investigation may be carried out by an officer at Kollam instead of Ernakulam due to the problem of COVID-19 and voluminous Books of Account being difficult to bring from there. It is held by the Court that Sec.35 of CGST and Kerala GST Act provides for maintenance of business account books in the business premises itself. The books of accounts being in digital format can always be submitted by the petitioner. It is also for the department to decide which officer should continue the proceedings and the appellant cannot have a choice in it. Therefore writ is dismissed.
DELHI HIGH COURT
Gaurav Sharma Food Industries
v.
Union of India & Ors.
[Manmohan & Sanjeev Narula, JJ]
W.P.(C) No.6671/2020
Date of Decision: September 18, 2020
Profiteering—permission to pay in installments—permission granted to pay the principal amount in six equated monthly installments—payment of interest and penalty sought by respondents stayed till further orders
The National Anti Profiteering Authority passed an order for payment by the petitioner for which a writ is filed seeking permission in order to pay the said amount in installments. In view of the orders passed by this Court in Phillips India Limited vs UOI as well as M/s Samsonite South Asia (P) Ltd. vs UOI and Ors., the Court has directed the petitioner to deposit the principal amount in six equated monthly installments. The payment of interest and penalty are stayed till further orders.
GUJARAT HIGH COURT
Kanal Enterprise
v.
State of Gujarat
[J.B. Pardiwala & Bhargav D. Karia, JJ]
R/Special Civil Application No.17673 of 2019
Date of Decision: March 11, 2020
Attachment of property u/s 83 of CGST Act—whether can be invoked during pendency of section 71 of CGST Act—No, section 71 speaks of access to business premises—no power can be invoked during pendency of proceedings under the said section of 71(1) of the Act—order attaching property is quashed
The property of the applicant was attached by virtue of order passed under Sec.83 of the Act on ground of proceedings instituted U/s 71 (1) of the CGST Act. A writ is filed in this regard, it is held that U/s 83 of CGST Act ,power can be invoked only during the pendency of proceedings U/s 62, 63, 64, 67, 73 and 74 of the Act, but not U/s 71(1) of the Act. Therefore, the order of attachment is set aside.
KERALA HIGH COURT
Venus Enterprises
v.
The Assistant State Tax Officer
[A.K. Jayasankaran Nambiar, J]
WP (C) No.20473 of 2020
Date of Decision: September 30, 2020
Detention of goods— non production of invoice— goods in transit detained on account of shortage of invoice that ought to have accompanied the transportation—soft copy of requisite invoice produced subsequently after the transportation—detention held to be not unjustified—petition disposed off
The goods were detained during transportation under the CGST Act, 2017 for the reason that the petitioner had not produced the copy of the invoice that ought to have accompanied the transportation of goods. The court has observed that though it was subsequently produced in form of soft copy, the soft copy itself showed that the invoice was generated after the commencement of the transportation. Therefore, detention cannot be said to be unjustified.
PUNJAB AND HARYANA HIGH COURT
Sushil Kumar
v.
State of Punjab
[Avneesh Jhingan, J]
CRM M-28841 OF 2020
Date of Decision: September 22, 2020
Anticipatory bail—connivance of passer, transporters and officer— case of tax evasion whereby serious allegation of bribery exist against the officer for assisting in escaping checking — discrepancies found in file and way of dealing with the detention — minor penalties not deposited in government treasury—investigation in process—personal liberty not as important as the sovereign function of collecting tax—arrest necessary to prevent influencing witness and tempering of evidence by officer by using its power—No case for bail is made out
It is alleged that tax was being evaded by ensuring that no checking of documents or goods were done while being transported to and from State of Punjab. Heavy monthly amount were paid as bribe to the officers of Tax Department for this purpose. Apprehending the arrest the petitioner moved petition U/s 438 of Cr.P.C. for grant of anticipatory bail which was rejected. Hence, the present petition is filed. The court has observed that there is alleged connivance of the transporters, passers and the officials to facilitate the evasion of tax. The investigation is going on and it appears that bribe was being paid. There are discrepancies found in the file and the way the petitioner was dealing with the detained vehicles. It is also indicated that minor penalties imposed were not deposited in Government treasury. Merely the fact that the name of the petitioner did not figure in the telephonic conversation is not a reason to conclude that custodial investigation of the petitioners is not required. When personal liberty is pitted against a sovereign function i.e. collection of tax which is life blood of the economy the latter would prevail. In this case, arrest is imperative as the official position of the petitioner can be used to influence witness or tamper with evidence. Therefore, petition for grant of pre-arrest bail is dismissed.
KERALA HIGH COURT
M.K. Basheer
v.
The State of Kerala
[N. Nagaresh, J]
WP(C) No. 40660 of 2017(F)
Date of Decision: August 26, 2020
Recovery of tax dues – Equity – recovery proceedings initiated in respect of unpaid tax by respondent – undivided property purchased by government to the extent of 1/5th share – application under Amnesty scheme for reducing arrears filed and reconveying of property back to petitioner on payment thereof – writ filed under apprehension that property might not be reconveyed even after payment of arrears – Held – No suit filed to demarcate the property or take possession by respondent yet – equity demands that property be reconveyed in view of permission given by officers to participate in amnesty scheme and settle tax dispute – Respondents directed accordingly – petition allowed
For recovery of sales tax, revenue initiated recovery proceedings under which the undivided property of the petitioner was put to public auction and ultimately purchased by the Government @Rs 1 to the extent of 1/5th share belonging to the petitioner by invoking Sec.50(2) of the Kerala Revenue Recovery Act. The petitioner applied for reducing arrears of sales tax under the Amnesty Scheme and applied for re-conveying the property back to the petitioner on payment of those arrears. The petitioner approached this Hon’ble Court apprehending that even if he pays the amount the respondents may not re-convey the bought-in-land to the petitioner. The court observed that the petitioner has been trying to raise funds for the payment of arrears. No suit was filed to demarcate the undivided property and take possession of the property on part of the respondent. In the meanwhile, the permission by the respondents to the petitioner to participate in Amnesty Scheme and offer to settle the tax dispute demands that the undivided share purchased by the respondents is restituted to the petitioner in view of equity, therefore, the petition is allowed directing the respondents to issue orders and take action to return the property after cancelling the same and orders of confirmation, if any.
CHHATISGARH HIGH COURT
Nutan Ispat and Power Pvt. Ltd
v.
State of Chhatisgarh
[P. Sam Koshy, J]
W.P. No. 45 of 2020
Date of Decision: February 28, 2020
Natural justice—Order of Appellate Authority—Appeal filed before appellate authority against the order passed by the Assessing authority—Grounds raised not dealt with by the appellate authority—Writ filed—plea of petitioner agreed upon – Matter remitted back to pass a speaking and a reasoned order after granting the petitioner an opportunity to be heard.
The petitioner has filed a writ contending that the order of by the Appellate authority is passed without discussing and dealing with the grounds raised by the petitioner. The Hon’ble court has observed that the Appellate Authority, in the impugned order, has reproduced most of the grounds raised but not decided it justifiably and therefore the same deserves to be remitted back for passing a reasoned and a speaking order dealing with the grounds raised in the appeal challenging the order passed by the Assessing Authority. The petitioner shall be heard again before deciding the matter.
PATNA HIGH COURT
Shiv Kishore Construction Pvt Ltd
V/s
The union of India
[Hon’ble Mr chief justice Sanjay Karon &Honble Mr justice S Kumar,]
Civil Writ Jurisdiction Case No 7374 of 2020
Date of Decision: September 25, 2020
Natural justice—opportunity of hearing — tax, interest and penalty levied alleging suppression of supply in returns—show cause notice served—matter decided without hearing the petitioner—no prior intimation given before deciding—Hence SCN and consequent order set aside
Tax, Interest and penalty was levied on the petitioner by the Deputy Commissioner of State Tax alleging suppression of supply as shown in its returns. The petitioner has approached the Court contending that the impugned order was passed after issuing a notice to show cause by a particular date. However, for unexplained reasons and circumstances, the matter was decided without hearing the petitioner. The Hon’ble court has observed that the show cause notice was passed without any prior intimation and the matter was preponed and without affording any opportunity of hearing the department held the view of the revenue, thereby violating principles of natural justice. Therefore, the show cause notice and the resultant order passed by the authority are set aside and the matter is remanded back for considering a fresh. Petition is allowed by way of remand.
GAUHATI HIGH COURT
GEEP Industries (India) (P) Ltd.
v.
Union of India and Ors.
[Manash Ranjan Pathak, J]
WP (C) 3695 OF 2020
Date of Decision: October 05, 2020
GST Tran-2 — evidence to show inability in uploading—direction given to respondent to permit submitting the document electronically or manually—subsequent denial by revenue for not showing there existed a genuine difficulty in doing so — writ filed— Honble court has observed bonafides of the petitioner with respect to willingness to file returns— if there is an impediment in uploading within time due to technical glitches, the concerned individual or firm cannot be put to a disadvantages position — writ allowed with a direction to permit filing of returns manually or electronically
The court had earlier given a direction to the respondents to permit the petitioner to submit GST Tran-2 in relation to Part-7A either electronically or manually. The petitioner has again approached the Court against the revenue for not being permitted to do so on the ground that the petitioner has not been able to show that there was genuine difficulty to upload the form. The Honble Court has held that if there is a provision made for filing returns electronically and if because of technical glitches uploading can’t be done in time, the concerned individual or firm cannot be put to a disadvantages position. It is not the case that the petitioner is unwilling to file return. The petition is disposed of by directing the authorities to allow the petitioner to file the form electronically or manually.
KERALA HIGH COURT
SOFTOUCH Health Care Private Ltd.
v.
The State Tax Officer
[A.K. Jayasankaran Nambiar, J]
WP(C) NO.15297 OF 2020(J)
Date of Decision: September 29, 2020
Best judgment assessment order—withdrawal of u/s 62 of the Act—returns were filed after the stipulated period of 30 days—hence, assessment order passed on best judgment basis can’t be withdrawn by petitioner—petitioner may approach appellate authority in this regard—writ dismissed
The petitioner contends that within the statutorily permitted period of 30 days from the date of receipt of the assessment order u/s 62, the petitioner preferred separate returns for various months and also filed for rectification of errors of the assessment order served upon him. The returns subsequently filed within the period had to be withdrawn under the said Section. The respondents have alleged that the returns were filed beyond the period of one month. The court has therefore held that as per the facts and circumstances the petitioner cannot aspire for the benefit of getting assessment orders passed on basis of best judgment set aside as contemplated U/s 62 of the Act. The petitioner can approach the appellate authority against the said order; therefore the writ petition is dismissed.
MADRAS HIGH COURT
KAY BEE Stationers
V/s
The Commissioner of Commercial Taxes
[M.S. Ramesh, J]
W.P. No.41977 of 2006
Date of Decision: September 30, 2020
Classification of goods—‘lever files made of cardboard’—whether taxable under Residuary entry or Entry 40(iv) of First Schedule—Clarification sought by revenue issued holding it to fall under Entry 40(B) of residuary entry—writ filed—Held Entry 40(iv) envisages all printed materials like folders, files , etc. — no nature of print specified—hence,all files and folders are brought under the said entry instead of residuary entry—therefore, clarification issued in this regard is quashed
The petitioner is a dealer engaged in business of “LEVER FILES MADE OF CARDBOARD” and other stationary items. The respondents claim it to be taxable @12% under the Tamil Nadu General Sales Tax Act, 1959. A clarification was sought in this regard and it was clarified that it was taxable at 12% under the Residuary Entry No.40, Part-B of the First Schedule of the 1959 Act. However, the petitioner claims that it falls under Entry-40(iv) of the First Schedule to the said Act and is taxable @ 10%. A writ is thus filed impugning the clarification.
The court has held that the legislative intent in the Entry 40(iv) is to tax all the printed materials including folders, file covers, book covers etc. The ‘Lever files’ also contain print and falls under the said entry. The reasoning of the respondent that printing of just a few words alone on the file will not entitle it to fall under the alleged entry is not acceptable as the entry does not define the nature of print. Moreover, when other materials like folders and file covers are brought under the aforesaid Entry 40(iv), the claim that files made of cardboard have to be brought under residuary entry is far-fetched. Therefore, the clarification NO.73 /2006 declaring the said item under residuary entry is quashed.
GUJARAT HIGH COURT
Mahavir Traders
v.
Union of India
[Hon’ble Chief Justice Mr. Vikram Nath & Honble Mr Justice J.B. Pardiwala]
R/Special Civil Application No.11269 of 2020
Date of Decision: 28.9.2020
Natural justice—Show cause notice—registration cancelled by GST department—writ filed contending that cancellation was cancelled without hearing—held show cause notice is vague and does not refer to any facts to enable the notice to file reply—therefore, notice and resultant order are quashed
The grievance of the petitioner is that its registration was cancelled by the GST Department without fixing a date for hearing and waiting for any reply by the petitioner. The court has held that the perusal of the same indicates that the show cause notice was vague and does not refer any particular facts much less point out so as to enable the Noticee to give its reply. Therefore, the show cause notice cannot be sustained and cancellation of registration resulting from the said notice also cannot be sustained.
MADRAS HIGH COURT
The Commissioner of GST & Central Excise
v.
Checkpoint Apparel Labeling Solutions India Pvt Ltd.
[Dr. Vineet Kothari and Krishnan Ramasamy, JJ]
WA No 788 of 2020
Date of Decision September 23, 2020
Transitional credit — filing of TRANS 1 — initial writ was allowed directing the department to permit uploading of TRANS 1 by petitioner—appeal filed by revenue against the order passed in favour of assessee contending that declaration not submitted within time and no evidence produced to avail benefit of ITC — Held that bonafide efforts made by petitioner to upload declaration—no response given by help desk after it faced technical glitches — assessee not assisted, on the contrary department acted as a silent spectator—No correction done in the infrastructure by the department—appeal dismissed and costs imposed on appellant-department
An appeal is filed by the department against the order passed by the Hon’ble court directing them to enable the assessee upload the Form Tran 1 to avail unutilized ITC under the new GST regime. The revenue contends that the time line for submission were not maintained by assessee and no evidence is produced in order to avail the benefit. The manual submission done by the assessee can’t be accepted.
It is held that the assessee has made bonafide efforts to upload its declaration. However, after facing technical glitches in the same, it was made to go to help desk which did not respond back. The department should have corrected its own infrastructure. On the contrary the department has created a problem by being a silent spectator and making the assessee run from pillar to post instead of granting the relief as intended by the government. The department is seeking to raise all kinds of technical and hypertechnical pleas in the present intra court appeal. Cost is imposed on appellant- department and appeal is dismissed.
UTTARKHAND HIGH COURT
Hindustan Unilever Ltd.
v.
The Commissioner, Commercial Tax,
[Ravi Malimath, A.C.J. and R.C. Khulbe, J
Commercial Tax Revision No.12 of 2020
With
Commercial Tax Revision No.13 of 2020
Date of Decision: September 17, 2020
Condonation of delay — sufficient cause — condonation of delay sought in filing appeal before tribunal—sufficient cause not found—dismissal thereof—Revision filed before Hon’ble High court explaining that delay occurred on account of copy of impugned order being misplaced by junior staff— said reason found to be a sufficient cause — delay not to come in way of substantial justice — delay condoned — matter remitted back to tribunal for hearing on merits
The assessee has filed a revision contending that there was a delay in filing the second appeal before the Tribunal which was dismissed on the ground that sufficient cause for delay of 329 days was not shown. The Hon’ble court has considered the reason given by the assessee which enunciates that the copy of the impugned order was served to the junior staff of the Senior Advocate for further cause of action. The file was thereafter misplaced. After it was traced the second appeal was filed but dismissed.
The court has held that there is no reason disbelief the affidavit filed. The assessee is a joint stock company involved in various activities. It cannot be said that the reason assigned by them does not constitute sufficient cause. Also the Supreme Court has held that delay should not come in the way of doing substantial justice between the parties. Hence, delay is condoned and matter is remitted back to Tribunal for considering the matter on merits.
MADRAS HIGH COURT
National Engineering Industries
v.
The State of Tamil Nadu
[Dr. Vineet Kothari & Krishnan Ramasamy, JJ]
Tax Case No.52 of 2016
Date of Decision: September 22, 2020
Interstate sales / intrastate sales — company A in Pondicherry placed on order for goods on company B in Chennai which was in turn placed on assessee company in Chennai to directly supply the same to A — Statutory C Forms issued by A to B— Also, E1 issued by assessee company — invoices showing consignee as A—Element of interstate sales satisfied — However, Tribunal decided it to be an intrastate transaction —Held by Hon’ble High court that the said transaction was interstate transaction — Same transaction taxed @ 4% under CST could not be taxed again as local sales — Merely for the reason that B and assessee company were in same state , it can’t be termed as intra state transaction—Principles envisaged u/s 3(a) of the CST Act ,1956 contravened by Tribunal — matter decided in favour of assessee
The facts state that Company A in Pondicherry placed an order for goods on company B in Chennai who in turn placed the purchase order on the assessee company in Chennai asking them to supply the goods in question directly to company A. The company A issued `C’ forms in respect of the interstate sales to company `B’ and to support the interstate movement of goods, the assessee company issued Form E1 in respect of these transactions. The supply of goods have taken place on account of pre-existing contract between B & A and the goods in question were sold by the assessee company showing the consignee in both invoices and purchase orders as of company A in Pondicherry. However, local tax was levied on the assessee holding the sales in question as Intra state sales. It is on this account that the assessee has approached the Hon’ble High Court. It is held that when the same transaction has already been taxed under the previous CST Act in the hands of company B at 4% against C Forms issued by Company A. It cannot be taxed again as local sales in the hands of the assessee- company. The reason given by Tribunal in its impugned order that merely because the two parties, i.e. the assessee and the company B are within the same states, no interstate sales has taken place. The view of Tribunal is also against the principles envisaged under Sec.3(a) of the CST Act 1956. Therefore, tax case is allowed in favour of assessee.
TRIPURA HIGH COURT
Sarasiddhi Agrotech Pvt Ltd
v.
Union of India & Others
[CJ Akil Kureshi and SG Chattopadhyay, J]
WP(C) No 666/2020
Date of Decision: October 5, 2020
Writ — maintainability of — premises searched — revenue alleges that petitioner was selling packaged marked rice for which tax stood unpaid after September 22, 2017– the petitioner claims facts contrary to findings of department—writ not held to be maintainable since question of facts are highly disputed—not possible for the court to examine them in writ—such aspects to be gone into by appellate authority
A writ is filed by the petitioner who is manufacturer of basmati rice against the order of assistant commissioner of CGST. The department searched and alleged that the petitioner was selling packaged marked rice with registered trademark, which after 22 September 2017, was subject to central as well as state GST which was not paid by petitioner. The petitioner has raised a number of disputed questions of facts about the nature of its activity and manner of selling rice after the said date. It is not possible to examine these facts acting as first appellate authority in writ petition. The order passed by the adjudicating authority is a speaking and a reasoned order. Thus, the aspects must be gone in to by appellate authority and cannot be examined in a writ.
MADRAS HIGH COURT
TVL Rising International Co
v.
The Commissioner of Central GST and Central Excise
[G.R. Swaminathan, J]
WP (MD) No. 12152 of 2020 and WMP (MD) NO. 10459 of 2020
Date of Decision: October 6, 2020
Search and seizure—‘reason to believe’ u/s 67 of CGST Act—business premises searched on intelligence report and goods seized—prohibition order issued—writ filed—held ‘reason to believe’ is predicated to the scrutiny of account books and documents—no scrap of material produced to prove the intelligence report that goods were misdeclared to evade tax—however, order of search is not quashed since no stock register was maintained—order of prohibition is modified to the extent that goods be released provisionally on furnishing of bond to enable petitioner to carry on business—writ partly allowed
The petitioner is a dealer of toys. It claims that no arrears were due till March 2020. However, after lockdown, it reopened its business; its premises were searched and goods were seized. Order of prohibition was issued directing not to remove or part with seized goods. Hence, a writ is filed again the order of seizure and prohibition contending that the respondent had no reasonable basis for search.
The Hon’ble court has held that the impugned proceedings were initiated based on intelligence report that the petitioner was evading tax by misdeclaring the imported goods. But not a scrap of material has been produced before the court. The formation of requisite belief is predicated on the scrutiny of account books and other documents. This is sufficient to invalidate the proceedings. However, the search is not being quashed at this stage since the stock register was not maintained at business place.
Regarding the prohibition order, it is observed that since 40 days have elapsed, the goods ought to be released on provisional basis so he can do his business. Therefore, order of prohibition is modified. The writ is partially allowed.