2014 (10) TMI 819 - HC - VAT and Sales Tax

Detention of goods - Unregistered dealer - offence under Sections 71(1)(b) and 71(3)(e) of the TNVAT Act, 2006 - Compounding of offence - The petitioner did not avail the opportunity given in the detention orders, but, challenging the same, filed Writ Petitions - Considering the submission made by the petitioner and after hearing the learned Government Advocate for the respondent, this Court by order dated 18.12.2012, directed the respondent therein to release the goods forthwith in terms of Section 67 of the TNVAT Act on payment of tax as determined in the notice - Held that - Now the petitioner has challenged these notices alleging that the authority concerned has no power to take action as alleged in the impugned notices and virtually, the matter has been pre-decided - Court directed to release the goods on payment of tax as determined in the notice dated 12.12.2012 and permit the petitioner to contest the payment of composition of fee on merits. Therefore, it is too late for the petitioner to now contend before this Court that the impugned notices have to be quashed as being without jurisdiction or on any other grounds. - Though the petitioner themselves reconciled with the facts that they would be satisfied if the goods are released subject to payment of tax as determined with liberty to agitate the same on merits before the concerned authority, they cannot now raise the same plea in a second Writ Petition - Decided against assessee.

Summary

Issues:
1. Detention of goods under TNVAT Act
2. Release of goods on payment of tax
3. Authority's power to take action on impugned notices

Analysis:
1. The petitioner, a Registered Dealer under the TNVAT Act, was engaged in resale of spices and other goods. The department detained the goods citing non-compliance with tax provisions related to imported goods. The petitioner challenged the detention orders through Writ Petitions.

2. The petitioner sought to pay the tax demand under protest and requested the release of goods as per Section 67(4) of the TNVAT Act. The court directed the release of goods on payment of tax and allowed the petitioner to contest the composition fee separately.

3. The petitioner later contested the impugned notices, alleging lack of authority and pre-decision. The court noted the petitioner's earlier acceptance of releasing goods upon tax payment and rejected the plea to quash the notices. The court directed the petitioner to contest the composition fee separately before the concerned authority.

4. The petitioner's contention that the impugned notices were demands without contesting opportunity was raised. The government advocate clarified that the notices were for compounding the offense under TNVAT Act, providing an opportunity for the dealer to reply and be heard before a final order is passed.

5. The court disposed of the Writ Petitions, instructing the petitioner to treat the impugned notices as show cause notices. The petitioner was granted three weeks to respond to the 2nd respondent and afforded a personal hearing. The 2nd respondent was directed to adjudicate the matter and pass a reasoned order within four weeks.

This judgment clarifies the detention of goods under the TNVAT Act, the procedure for release on payment of tax, and the authority's power to take action on impugned notices, ensuring due process and opportunity for the dealer to contest the claims made.