THE HON'BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.17938 of 2011 Date:28.06.2011 Between: M/s.Samruddhi Industries Ltd. … Petitioner AND Deputy Commercial Tax Officer-I, Office of the Commercial Tax Officer, Madanpalle, Chittoor District, And others. … Respondents THE HON'BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.17938 of 2011 ORDER: (Per Hon’ble Sri Justice Ramesh Ranganathan) The action of the respondents in detaining 1710 pieces of plastic goods belonging to the petitioner, for a value of Rs.1,67,176/-, is under challenge in this writ petition as being in violation of Sections 5 and 45 of the Andhra Pradesh Value Added Tax Act, 2005 (the Act). The petitioner seeks a consequential direction to the first respondent to release the detained goods aforementioned. The petitioner, a public limited company manufacturing plastic items, transported 1710 plastic articles by vehicle bearing No.KA 40 6234 to consignees in the State of Karnataka. The said goods were not accompanied by way bills resulting in the vehicle being detained. It is the petitioner’s case that failure to furnish the way bills was by oversight and that they had submitted a representation in this regard to the authorities requesting them to release the detained goods. However, the first respondent issued show cause notice dated 21.06.2011 calling upon the petitioner to release the goods at the earliest by furnishing security equivalent to the value of the goods i.e., 1,63,899/- in the form of bank guarantee from a bank incorporated in terms of the Banking Regulation Act, 1949. The petitioner was also given an opportunity to file their objections to the show cause notice. Sri M.V.J.K.Kumar, learned Counsel for the petitioner, would contend that the authorities do not have any power to direct the petitioner to provide security for the value of the goods; at best only tax can be collected treating the said goods as an intra-state sale; and the petitioner was ready and willing to provide security to the extent of tax leviable on these goods even if they were to be treated as intra-state sales. On being pointed out that Section 45(7)(b) of the Act confers power on the Officer to seize and confiscate goods where they are carried in a goods vehicle without any documents, or are covered by fictitious documents, learned Counsel would fairly state that the petitioner would furnish an unconditional bank guarantee from any Nationalized Bank; and this Court should protect the petitioner – assessee directing the respondents not to encash the bank guarantee till the petitioner submits their objections to the show cause notice and final orders are passed thereupon by the first respondent. We, therefore, dispose of the writ petition in the following terms: a. Within one week from today the petitioner shall furnish an unconditional bank guarantee from any Nationalized Bank for a sum of Rs.1,63,899/- (Rupees one lakh sixty three thousand eight hundred and ninety nine only), as referred to in the show cause notice dated 21.06.2011, valid for a period of one year. b. On production of the bank guarantee the first respondent, after satisfying himself regarding the genuineness thereof, should forthwith release the goods in question. c. The petitioner may submit their objections to the show cause notice within two weeks from today. d. Within three weeks from the date on which objections are received from the petitioner, the first respondent shall pass final orders in accordance with law. e. In case no objections are filed within the aforesaid stipulated period of two weeks, it is open to the first respondent to proceed to pass final orders in accordance with law. f. Depending on the outcome of the proceeds, and for a period of one week from the date on which final orders are passed and communicated to the petitioner, the bank guarantee furnished by the petitioner shall not be encashed. There shall be no order as to costs. _______________ (V.V.S.RAO, J) ______________________________ (RAMESH RANGANATHAN, J) 28.06.2011 Note: Issue C.C by 29.06.2011. B/o. vs