1999 (2) TMI 653 - AT - VAT and Sales Tax

Summary

Issues:
Prayer to set aside Joint Commissioner's order and order refund of collected sum without authority of law.

Analysis:
The petitioner sought to set aside the order of the Joint Commissioner and requested a refund of the sum collected without legal authority. The petitioner's counsel argued that the detention of goods at the check-post was unjustified as there were valid documents for the intended sale by transfer of documents without handling the goods. The goods were accompanied by necessary forms and documents, and the compounding fee collected was deemed unwarranted. The government advocate, however, justified the levy based on constructive delivery locally, alleging evasion. The Tribunal examined the contentions, finding that at the time of detention, valid documents existed for the goods, and there was no evasion of tax. The compounding fee collected was deemed unauthorized under section 46(1)(a) as there was no evidence of tax evasion. The Tribunal emphasized that if there were sales liable for tax, the proper action would be to levy tax and penalty under the appropriate provisions of the Sales Tax Act, not a compounding fee. Therefore, the order justifying the compounding fee levy was quashed, and the amount was ordered to be refunded to the petitioner.

The Tribunal clarified that the assessing authority could take separate action if there were sales of goods attracting tax under the Sales Tax Act based on the documents available. The original petition was allowed, and the order was to be observed and executed by all concerned. The Tribunal issued the order for the refund of the amount collected without legal authority, emphasizing that the compounding fee levy was unjustified given the presence of valid documents at the time of the check-post detention.