A ONE CERAMIC Vs. STATE OF GUJARAT

JUDGEMENT

(1.) RULE . Mr. Chintan Dave, learned Assistant Government Pleader, waives service of notice of rule on behalf of the respondents. Having regard to the controversy involved in the present case which lies in a very narrow compass and with the consent of the learned counsel for the respective parties, the matter was taken up for final hearing today.

(2.) BY this petition under article 226 of the Constitution of India, the petitioner has challenged the order dated August 26, 2014 passed by the fifth respondent whereby the respondent, in exercise of powers under sub -section (5) of section 68 of the Gujarat Value Added Tax Act, 2003 (hereinafter referred to as "the VAT Act"), has directed seizure of the goods of the petitioner and assessed tax at Rs. 1,65,240 and imposed penalty at 150 per cent thereof at Rs. 2,47,860, and directed the petitioner to pay in all Rs. 4,13,100. Moreover, the petitioner has also been directed to pay Rs. 12,880 towards input tax.

(3.) MR . B.D. Karia, learned Advocate for the petitioner, invited the attention of the court to the provisions of sub -section (5) of section 68 of the VAT Act, to submit that the impugned order has been passed without affording a reasonable opportunity of hearing to the petitioner. It was submitted that under the provisions of sub -section (5) of section 68 of the VAT Act, the officer -in -charge can at best impose penalty in addition to the tax payable under the Act, not exceeding one and one -half times of the tax for possession of goods so seized. Adverting to the facts of the present case, it was submitted the goods in question are valued at Rs. 3,60,000 and hence, the tax payable thereon would come to Rs. 54,000 and the highest penalty that could be imposed would be Rs. 1,08,000. It was submitted that however, the fifth respondent, apart from the fact that the principles of natural justice have not been complied with while passing the impugned order, has assessed the tax payable at an exorbitant amount de hors the provisions of sub -section (5) of section 68 of the VAT Act.