Sri Suresh Chanda, I.A.S., Commissioner of Commercial Taxes, A.P. Hyderabad

Sub: Check of Vehicular Traffic- Detention, Tax collection, Penalty collection, Seizure, Confiscation of Goods – As per Section 45 of APVAT Act, 2005 and Procedures to be followed as per Rule 56 & 57 of APVAT Rules, 2005- instructions issued to the Officers – Regarding

It has come to the notice of the Commissioner (CT) that, certain Officers conducting Check of Vehicular Traffic are not correctly following the procedure prescribed under Section 45 of APVAT Act, 2005 and Rule 56 & 57 of APVAT Rules, 2005 while goods vehicles are detained for the reason that the sale or purchase of the goods carried has , for the purpose of payment of tax has not been properly accounted for in the bills of Sale, or Delivery notes or Waybill etc.

In this regard the Officers conducting Check of Vehicular Traffic are directed to follow the procedure prescribed under the Section 45 of APVAT Act, 2005 and Rule 56 & 57 of APVAT Rules, 2005 which is summarized here under:

1. Detention and Collection of Tax or Obtaining security:

If the Officer after scrutiny of the documents produced by the driver or person in-charge of the Goods Vehicle is satisfied that, the sale or purchase of the goods carried , for the purpose of payment of tax, has not been properly accounted for in the documents, shall detain the goods and direct the Driver or person-in charge of the goods vehicle to pay tax or to furnish security for an amount equal to two times the amount of tax payable by issuing a notice in Form 610 specifying the reasons there for and serve the notice on the driver or person in-charge of the goods vehicle. While recording any statement as to availability or otherwise of documents for the goods under movement, care must be taken that same are recorded by the driver or person incharge of the goods vehicle. However if driver or person incharge is not able to record himself, in that case record and read over to him and obtain signature/thumb impression preferably in the presence of witnesses. It is suggested to avoid any attempt by driver or person incharge later to deny having given such statement.

2. If the person incharge pays the tax or furnish security, the officer receiving tax and security shall issue receipt in the name of dealer liable to pay tax and also intimate the details of such collection to the officer concerned having jurisdiction over the place of business of the owner of goods. Tax so collected shall be given credit to the account of the owner of goods if he is a registered dealer.

3. If tax or security directed so is not paid or furnished within the time given, the officer who detained the goods, shall pass order of detention with reasons for such detention and order shall be served on the driver or person incharge of the goods vehicle. Such detention order shall not be for more than 3 days except with the permission of next higher authority.

4. Levy of Penalty:

The Officer shall issue a separate notice (it should be later in time from notice for payment of tax or furnishing security) proposing levy of penalty not exceeding two times the amount of tax payable on such goods and pass an order after giving a reasonable opportunity to the person likely to be effected.

5. Release of goods:

If the tax is paid or security is furnished and penalty is paid by the driver or person in-charge of the goods vehicle or owner of goods, then the goods so detained shall be released forthwith.

6. The Officers conducting Check of Vehicular Traffic should note that they should not pass a penalty order either along with the notice for payment of tax or without providing reasonable opportunity after issue of a penalty notice.

7. If the tax directed to be paid or the security directed to be furnished is not paid or furnished as the case may be or penalty directed to be paid is not paid and it is necessary to detain the goods, he shall detain so much of the goods that are approximately equal in value to the amount of tax to be paid or security to be furnished and penalty to be paid, as long as it may be reasonably necessary ;

provided that no such goods shall be detained by the said officer for more than three days except with the permission of the next higher authority.

8. If the goods are carried in the goods vehicle without any documents or covered by fictitious or unrelated documents, the Officer conducting CVT shall have power to seize and confiscate such goods.

If, after issue of detention notice for non production of documents relating to goods under movement, documents are produced, the Supreme Court has held in the case of ACTO Vs Balaji Electricals ( Rajasthan State reported in 2008- 18-VST-436-SC) that subsequent production of any documents as afterthought.

Before taking the action for the confiscation of the goods under Clause (b) of Sub- Section 7 of Section 45 of APVAT Act, 2005 the Officer, shall give a notice to the person likely to be effected and provide an opportunity of being heard.

9. If the driver or in charge of the goods vehicle has not responded to the notice, then the said Officer may take action under Sub-section 8 and 9 of Section 45 of APVAT Act,2005 read with Rule 56 of APVAT Rules and realize the tax and penalty on auction of the goods which are seized and confiscated.

All the Officers conducting Check of Vehicular should follow the above instructions scrupulously. Receipt of the instructions shall be acknowledged.

Sd/ Suresh Chanda

Commissioner of Commercial Taxes