2016 (6) TMI 1204 - HC - VAT and Sales Tax

Detention of goods - detention on the ground that without e transit pass the goods are moved - offence u/s 70(2)(c) 71(3)(d) 71(3)(e) and 71(5)(a) of TNVAT Act 2006 - Held that - in Tvl.Sodhi Transport Co. and Another Vs.State of U.P 1986 (3) TMI 303 - SUPREME COURT OF INDIA it was held that in case of non-surrender of transit pass if a dealer could produce sufficient legally valid and reliable documentary evidence to prove that the goods moved with the transit pass in question had actually crossed the borders of the State such evidences may be accepted by the Assessing Authority as an evidence of inter-state movement of goods. The officers of the Department were also cautioned that this cannot be accepted for repeated violations - this is the first occasion where the petitioner s goods have been detained and the petitioner has not come to the adverse notice of the Department on the earlier occasions - goods directed to be released with a direction to the petitioner to remit a sum of Rs. 2, 000/- towards fine - petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to Goods Detention Notice based on absence of "e" transit pass and legality of detention under TNVAT Act, 2006.

Analysis:
The petitioner, a registered dealer under the TNVAT Act, challenged a Goods Detention Notice dated 06.06.2016, issued by the fourth respondent for moving goods without an "e" transit pass. The petitioner contended that the goods should not be detained solely for this reason, as there are other relevant documents that the check post authorities should consider for releasing the goods. The petitioner relied on a circular issued by the Principal Secretary/ Commissioner of Commercial Taxes and previous court decisions to support this argument.

The Additional Government Pleader argued that for interstate movement, goods must be accompanied by an "e" transit pass to prove tax compliance at the destination. Failure to produce the required pass is considered an offense under the TNVAT Act. The petitioner was advised to pay the tax and seek release of goods through proper channels, such as approaching the Revisional Authority under Section 55 of the TNVAT Act, instead of filing a writ petition.

Referring to a similar case, the court highlighted the importance of having necessary documents during goods movement. The court emphasized that if a dealer can provide valid evidence of interstate movement despite lacking a transit pass, the goods may be released. However, repeated violations were cautioned against.

Considering the circumstances and the circular issued by the Commissioner of Commercial Taxes, the court directed the petitioner to pay a fine of Rs. 2,000 for the release of goods. Upon payment, the goods were to be released without any additional costs. This decision was made based on the specific facts of the case and the legal provisions discussed during the proceedings.