2015 (12) TMI 1339 - HC - VAT and Sales Tax

Detention of goods - Evasion of tax - Held that - Goods transported from Gujarath already reached the destination of the petitioner s factory at Pondicherry and the petitioner who received the goods voluntarily appeared before the authority for obtaining necessary seal in the transport documents. There is no other allegation with regard to evasion of tax pointed out by the authority in the impugned goods detention notice - since there is no evasion of taxes mentioned in the impugned order, the authority is entitled to collect ₹ 2000/- only from the petitioner - Petitioner disposed of.

Summary

Issues:
Detention of goods due to lack of appropriate seal in transport documents; Allegation of tax evasion; Proper documentation for interstate transportation; Application of Section 72(1) of Tamilnadu Value Added Tax Act, 2006.

Detention of Goods:
The petitioner, a registered dealer under various tax acts, imported plastic granules from Gujarat. Upon arrival at the destination in Pondicherry, it was discovered that the necessary seal from the Kandamangalam Check post was missing from the transport documents. The authorities issued a detention order based on this discrepancy. The petitioner contended that there was no tax evasion as the transaction was interstate, and the goods had crossed multiple check posts without issue. The petitioner voluntarily sought the missing seal, but the authorities refused to release the goods.

Allegation of Tax Evasion:
The Additional Government Pleader argued that the petitioner failed to produce relevant documents, justifying the detention to ensure the collection of genuine tax owed. However, no specific evasion of tax was alleged by the authorities, and the petitioner had cooperated by presenting all necessary documentation.

Proper Documentation for Interstate Transportation:
The court noted that the goods had safely reached the petitioner's factory and that the petitioner had proactively attempted to rectify the missing seal issue. The detention notice did not mention any tax evasion. The court referenced Section 72(1) of the Tamilnadu Value Added Tax Act, 2006, which allows for the composition of offenses. Since there was no proven tax evasion, the authority was directed to collect a nominal sum of Rs. 2,000 from the petitioner for the release of goods.

Application of Section 72(1) of Tamilnadu Value Added Tax Act, 2006:
Section 72(1) provides for the composition of offenses, allowing the prescribed authority to collect a specified amount in cases of tax evasion or other violations. In this case, as there was no evidence of tax evasion, the court ordered the petitioner to pay Rs. 2,000 for the release of goods. The judgment emphasized that the assessing authorities could pursue further action if any violations of the Act were discovered.

In conclusion, the writ petition was disposed of with the direction for the petitioner to pay the specified amount for the release of goods, highlighting the importance of proper documentation for interstate transactions and the application of relevant tax laws to ensure compliance and fair treatment.