2015 (9) TMI 681 - HC - VAT and Sales Tax

Detention of goods Condition for release of goods Petitioner aggrieved by notice detaining consignment of machinery and parts that was purchased by petitioner and also by imposition of security deposit as condition for release of goods and vehicle Held that - on verification of details available in KVATIS, it was found that petitioner had no branch or godown It was therefore suspected that onward movement of goods, from check post, was pursuant to sale effected by petitioner to person in address Discrepancy in description of place to which goods were consigned and explanation offered by petitioner has to be examined by adjudicating authority Therefore 2nd respondent directed to release goods and vehicle to petitioner on petitioner furnishing an amount of 30% of security deposit amount demanded On deposit of said amount, Adjudicating authority shall adjudicate matter and pass orders Decided partially in favour of petitioner.

Summary

Issues:
Detention of consignment at check post, demand for security deposit for release of goods, discrepancy in delivery address on invoice, explanation of consignment destination, release of goods by adjudicating authority, time frame for adjudication.

Analysis:
The petitioner, a registered dealer under the Kerala Value Added Tax Act, challenged the detention notice (Ext.P5) issued for a consignment of machinery and parts purchased by the petitioner at the Amaravila check post. The respondents insisted on a security deposit for the release of the goods and vehicle. The main issue was the discrepancy in the delivery address on the invoice and the actual destination of the goods. The respondents suspected a sale to a different party due to the mismatch in addresses. However, the petitioner explained that the goods were intended for personal use and were to be stocked at a sister concern's premises due to space constraints.

The Court noted that the consignment was supported by valid documents as per the KVAT Act, and the petitioner was a registered dealer. Despite the address discrepancy, the Court directed the 2nd respondent to release the goods and vehicle upon the petitioner furnishing 30% of the security deposit amount and a simple bond for the remaining balance. The adjudicating authority was tasked with examining the petitioner's explanation and resolving the matter within two months from the date of the judgment.

Furthermore, the petitioner was instructed to present a copy of the judgment and writ petition to the respondents for compliance. The judgment aimed to balance the interests of the petitioner and the tax authorities by allowing the release of goods while ensuring a thorough examination of the situation by the adjudicating authority within a specified timeframe.