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2017 (2) TMI 1335 - HC - VAT and Sales TaxDetention of goods - Inter-State sale transaction - Held that - the writ petition is disposed of with a direction to the respondent to release the detained goods, forthwith, upon a bank guarantee of a Nationalized Bank/ Scheduled Bank, equivalent to a sum of ₹ 69,969/- being furnished by the petitioner - petition disposed off.
Issues:
1. Detention of goods for alleged tax evasion during interstate transportation. Analysis: The writ petition challenged a goods detention notice dated 12.02.2017, which led to the issuance of a compounding notice to the petitioner. The detention was based on the suspicion of tax evasion during the transportation of goods from Kerala to Chennai without proper records as required by the TNVAT Act. The petitioner contended that the goods were actually being moved from Kerala to Maharashtra in an interstate sale transaction, implying no tax liability within Tamil Nadu. The impugned notice highlighted a diversion made by the transporter, raising suspicions that prompted the detention of the goods. The petitioner was asked to pay a one-time tax of 14.5% amounting to ?69,969, along with duty totaling ?1,39,938. In response, the petitioner offered to furnish a bank guarantee equivalent to the tax amount for the expedited release of the goods, reserving the right to challenge the tax and penalty imposition. Upon acceptance of the security offer by the petitioner, the respondent agreed to release the detained goods immediately. The court disposed of the writ petition with a direction for the release of goods upon the petitioner furnishing a bank guarantee from a Nationalized Bank/Scheduled Bank amounting to ?69,969. The petitioner retained the right to challenge the tax and penalty imposition despite providing the security, and was instructed to keep the bank guarantee active until further orders from the authority. As a result, the writ petition was concluded with the connected miscellaneous petition closed, and no costs were awarded in the matter.
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