2010 (2) TMI 1060 - HC - VAT and Sales Tax

Seizure of the vehicle Lorry No. TN-37-AW-0955 and retaining the goods therein - Held that - This writ petition is disposed permitting the petitioner to give his objection to the show-cause notice issued by the respondent dated January 19, 2010 within one week from the date of receipt of a copy of this order, and on receipt of the said representation, the respondent shall take note of the facts and circumstances and pass appropriate orders under section 72 of the Act within one week thereafter. If the respondent comes to a conclusion that the petitioner is liable to pay any amount as per section 72(1) of the Act, on payment of the amount the vehicle as well as the goods are directed to be released forthwith

Summary

Issues:
Seizure of vehicle and goods under Tamil Nadu Value Added Tax Act, 2006.

Analysis:
The petitioner was aggrieved by the seizure of a lorry and goods while transporting consignments from Hyderabad to Trichy and Cochin. The respondent seized the vehicle alleging it was carrying consignments without proper seal or authorization under the Tamil Nadu Value Added Tax Act, 2006. The petitioner, a transporter, claimed no involvement in the consignment except for transportation charges. The respondent issued a show-cause notice for composition of offences under section 72(1) of the Act, which allows for the payment of a specified amount in case of tax evasion or other offenses.

The section 72 of the Act provides for composition of offenses, allowing the authority to direct payment of a specified amount in case of tax evasion or other offenses. The authority can refuse composition by recording reasons in writing. Despite a show-cause notice, the authority had not passed an order as required under section 72 of the Act. The petitioner failed to respond to the show-cause notice, which is necessary for release of the vehicle and goods under the Act.

The petitioner's counsel suggested furnishing a bank guarantee if the respondent does not accept the composition proposal. However, the power to release goods upon furnishing a bank guarantee lies with the respondent under section 72(3) of the Act. The court directed the petitioner to respond to the show-cause notice within a week and ordered the respondent to pass appropriate orders within a week thereafter. If the respondent determines the petitioner owes an amount under section 72(1) of the Act, the vehicle and goods are to be released upon payment. The court disposed of the writ petition without costs.

In conclusion, the judgment addressed the seizure of goods and a vehicle under the Tamil Nadu Value Added Tax Act, 2006, emphasizing the importance of responding to show-cause notices and following the procedures outlined in the Act for composition of offenses.