2000 (7) TMI 929 - AT - VAT and Sales Tax

Summary

Issues:
1. Detention of goods for alleged tax evasion during transportation.
2. Legal provisions regarding release of goods under the Tamil Nadu General Sales Tax Act.
3. Compounding of offence and prosecution options for the petitioner.

Analysis:
1. The petitioner, a registered dealer in raw rubber sheets, sold goods to a buyer in a different district. The goods were detained during transportation, leading to a legal dispute over alleged tax evasion. The respondent accused the petitioner of contravening tax laws and issued a notice for compounding the offence.

2. The Tribunal analyzed relevant provisions of the Tamil Nadu General Sales Tax Act. Section 42(3) allows for the release of goods if properly accounted for, but the petitioner's refusal to compound the alleged offence complicated the situation. The Tribunal emphasized that the law does not provide for releasing goods once prosecution is initiated, as the property involved must be under the Magistrate's control.

3. The petitioner's argument to release goods by paying tax alone was rejected. The Tribunal clarified that the logical course after refusing to compound an offence is prosecution. If the petitioner wishes to seek release of goods, payment of the compounding fee under protest is necessary. Any disagreement with the fee determination can be addressed through a revision petition before the appropriate authority.

Conclusion:
The Tribunal dismissed the original petition, stating that any direction for the release of goods during prosecution can only be obtained from the Magistrate. The petitioner's option is to pay the demanded compounding fee under protest, face prosecution, and claim a refund if successful. The decision highlighted the absence of provisions for releasing goods under the Act once prosecution is initiated, emphasizing the legal process to be followed in such cases.