2015 (6) TMI 192 - HC - VAT and Sales Tax

Detention of goods - Transportation of goods without proper documents - Held that - Petitioner, being a transporter, carrying on business in the State, is hereby directed to pay tax for release of the goods. Insofar as the compounding fee is concerned, the authority will proceed in accordance with the provisions of section 72 of the Tamil Nadu Value Added Tax Act and the amount demanded under the compounding fee shall not be made a pre-condition for release of the goods and the authorities are to proceed in accordance with law for compounding fee following the procedure prescribed and the petitioner is entitled to file revision under section 54 of the Act, if so advised. - Decision in the case of MOHAN SHARMA v. THE DEPUTY COMMERCIAL TAX OFFICER 2013 (4) TMI 244 - MADRAS HIGH COURT followed - Decided in favour of assessee.

Summary

Issues:
Challenge against impugned notices of goods detention and compounding based on arbitrary exercise of power under section 69 of the Tamil Nadu Value Added Tax Act, 2006.

Analysis:
The petitioner, a transporter, contested the detention of goods accompanied by proper documents for a routine stock transfer from Cochin to Patna. The respondent intercepted the vehicle, detained the goods, and issued notices alleging improper documentation. The petitioner argued under section 67(3)(b)(2) that taxes could be paid under protest for release, citing MOHAN SHARMA v. THE DEPUTY COMMERCIAL TAX OFFICER (CDJ 2012 MHC 6343) as precedent for releasing goods upon voluntary or protested tax payment.

Analysis Continued:
The respondent contended that the petitioner, as a transporter, should not solely pay taxes due to potential recovery issues if the case is decided against him. The court, referencing the MOHAN SHARMA case, directed the petitioner to pay tax for goods release under section 67(3)(b)(2). Regarding compounding fees, the court instructed authorities to follow section 72 of the Act without making the fee a pre-condition for goods release, allowing the petitioner to file a revision under section 54 if necessary.

Conclusion:
The court disposed of the writ petition without costs, directing the petitioner to pay taxes for goods release and allowing for compounding fee procedures as per the law. The judgment emphasized adherence to legal provisions and the petitioner's right to seek revision if required.