2015 (10) TMI 1994 - HC - VAT and Sales Tax

Detention of goods - Imposition of compounding fees - Held that - petitioner is willing to pay one time tax and in order to give a quietus to the issue, for the purpose of release of goods, on payment of one time tax viz., ₹ 61,736/-, ₹ 60,988/- and ₹ 60,534/- respectively by the petitioner, the respondent shall release the goods forthwith along with the respective goods vehicles. - Appeal disposed of.

Summary

Issues:
Challenge to proceedings of the respondent in G.D. Nos.1591, 1592, and 1593/2015-2016 dated 26.8.2015 and the direction to release goods without payment of tax and compounding fee.

Analysis:
The petitioner, a company engaged in Solar Power Systems business, challenged the respondent's actions in detaining goods and goods vehicles at a check post. The petitioner contended that the transactions were inter-state sales originating from Telangana to Trichy, falling under Section 3(b) of the CST Act, hence outside the scope of tax levy in Tamil Nadu. The petitioner argued that the destination of goods cannot be considered an additional place of business, and registration at the work site was unnecessary as per Circular dated 08.04.2014. The petitioner emphasized that the goods movement was supported by proper documents, and detaining the goods was unjustified.

The petitioner further argued that the respondent's allegation of evasion of tax by not raising a local sale bill in the name of the recipient was baseless, as the transactions were inter-state in nature. The petitioner expressed willingness to pay a one-time tax to secure the release of goods. The respondent contended that the petitioner brought goods to Tamil Nadu and supplied them to Trichy as local sales without proper documentation, resulting in the detention of goods to evade tax payment. The court directed the release of goods upon payment of the one-time tax by the petitioner, while allowing the petitioner to challenge the compounding fee through legal means.