2017 (3) TMI 1649 - HC - VAT and Sales Tax

Detention of goods - it was alleged that the goods transported by the petitioner was not accompanied by the documents prescribed in Sub-Section 5 of Section 67 of the Tamil Nadu VAT Act, 2006 and that the respondent had reason to believe that there was sale of the goods liable to tax - Held that - considering the fact that the very impugned proceedings is only the detention notice, this Court is of the view that the petitioner must approach the respondent and give the explanation as discussed - this writ petition is disposed of by granting liberty to the petitioner to approach the respondent and file their explanation within a period of seven days.

Summary

Issues: Detention notice under Tamil Nadu VAT Act, 2006. Challenge to detention notice.

In this case, the petitioner challenged a detention notice issued under the Tamil Nadu VAT Act, 2006. The respondent alleged that the goods transported were not accompanied by the required documents and that there was a sale of goods liable to tax. The petitioner contended that there was no tax evasion and the detention notice was unjustified. The Court noted that the petitioner should have approached the respondent with all relevant documents to explain the situation before challenging the detention notice. The respondent offered the petitioner an opportunity to provide an explanation, after which a one-time tax liability could be determined for the release of goods. The Court emphasized that the petitioner must first approach the respondent with an explanation. The petitioner was granted seven days to file the explanation, following which the respondent was directed to pass orders within seven days. The petitioner could then either accept the liability and pay the tax or challenge the decision before the appropriate forum. No costs were awarded in this case.