The Punjab and Haryana High Court held that the principle of vicarious liability cannot be extended indefinitely. Owner of conveyance is not vicariously liable to the wrong of the owner of goods.
Vijay Mamgain, the petitioner has challenged the action of the respondent in not releasing the conveyance even though h had paid the fine prescribed under section 130(2) proviso of the Central Goods and Services Act, 2017. The fact is that in this case an order of penalty and tax was made against the goods but since the same was not paid within 14days proceedings under section 130 of the Act were initiated. At that stage also the owner of the goods did not come forward to pay the tax and penalty or the fine in view of the confiscation. However, the owner of the conveyance i.e. the petitioner went and paid the fine imposed on the vehicle but, the vehicle was not released.
The petitioner submitted that the scheme of section 130 of the Act makes it clear that the owner of the goods and the owner of the conveyance are two separate entities and the liability of the one cannot be foisted upon the other.
The division bench of Honorable justice Sri Ajay Tewari and Honorable justice Sri Pankaj Jain have given reliance to the case M/s Shiv Enterprises vs. the State of Punjab and held that, “the vicarious liability cannot be extended indefinitely. In the present case also to force the owner of the conveyance to pay tax, penalty, and fine on the goods would mean that the owner of the conveyance is also foisted with the vicarious liability of any mis-declaration /fraud by the owner of the goods despite the proviso engrafted on to subsection 2 of section 130 of the Act”. Consequently, they rejected the arguments of the respondents and directed that the conveyance be released forthwith.
Vijay Mamgain Vs The State of Haryana & ors.
CITATION: 2022 TAXSCAN (HC) 122
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