2016 (1) TMI 470 - HC - VAT and Sales Tax

Detention of goods - driver of the vehicle has handed over some wrong invoice pertaining to some other goods of the respondent due to inadvertence - Held that - Admittedly, the goods are detained from 16.09.2015. Till date, tax has not been quantified. Hence, for the purpose of release of goods, the respondent is directed to quantify the tax to be paid by the petitioner and intimate the same to the petitioner within a period of one week from today and on such payment being made by the petitioner, the goods detained are directed to be released forthwith. As far as the compounding fee is concerned, it is open to the petitioner to adjudicate the same in the manner known to law. - Petition disposed of.

Summary

Issues:
Challenge to proceedings dated 16.09.2015 and release of goods under Article 226 of the Constitution of India.

Analysis:
The petitioner, a marble and tiles dealer registered under the Pondicherry VAT Act, had ordered ceramic tiles from suppliers in Gujarat. The goods were consigned with correct invoices to the petitioner's address but were detained by the respondent on 16.09.2015 during transit to Puducherry. The respondent alleged that the delivery address was incorrect, demanding tax payment at 14.5% along with compounding fees. The petitioner contended that the driver mistakenly presented the wrong invoice, while the correct documents were with the goods. The petitioner argued that relevant sections had no application, and the respondent violated natural justice by alleging tax evasion without opportunity. The petitioner also objected to the demand for tax and compounding fees for releasing the goods, seeking relief through the writ petition.

The petitioner's counsel argued that the detention notice was based on incorrect documents, while the petitioner was willing to pay the one-time tax amount to secure the release of goods. The respondent's representative maintained that the detention was justified due to the lack of correct documents. The petitioner expressed readiness to pay the quantified tax amount for the goods' release and requested the opportunity to contest the compounding fee separately. After considering both sides' submissions and reviewing the records, the court noted that the goods had been detained since 16.09.2015 without the tax being quantified. The court directed the respondent to calculate the tax amount owed by the petitioner within one week. Upon payment by the petitioner, the detained goods were to be released immediately. The court allowed the petitioner to address the compounding fee through appropriate legal procedures. The writ petition was disposed of with the specified directions, without imposing any costs.