2017 (7) TMI 1333 - HC - VAT and Sales Tax

Detention order - compounding of offence by paying tax - TNVAT Act - HELD THAT - The petitioner has explained the case in detail and requested the respondent to release the goods. However, the respondent has not released the goods and issued the compounding notice. Further, it is stated that the goods can be transported from West Bengal to Chennai and kept in the godown to export the goods through Chennai Port and the goods which are consigned from West Bengal cannot be exported on the same day without following the procedure and documentation works for the export sales. Therefore, the petitioner has temporarily stored the goods in a private godown near Redhills as the goods have to be shipped to Malaysia by M/s.Sre Ranga Logistics. Only when the goods are stored for more than 30 days, then only proper permission and license has to be obtained from the sales tax authorities. There are factual issues that the petitioner should establish before the appropriate authority and cannot gone into in this writ petition. Therefore if the petitioner seeks for release of the goods, he should pay one time tax as quantified in the compounding notice and thereafter, avail other remedies available under the Act. The writ petition is disposed of by directing the petitioner to remit one time tax of ₹ 10,61,845/- and thereafter avail the other alternate remedy available under the provisions of the Act. On remittance of the one time tax, the respondent is directed to release the goods forthwith.

Summary

Issues:
Challenge to goods detention notice and compounding notice.

Analysis:
The petitioner challenged the goods detention notice and compounding notice issued by the respondent. The respondent detained the consignment due to three defects: the petitioner not being a registered dealer in West Bengal, the import and export details being questionable, and the godown not being registered under the TNVAT Act. The petitioner argued that the goods were covered by proper records and requested their release. However, the respondent did not release the goods and issued the compounding notice. The petitioner explained that the goods were temporarily stored in a private godown for export to Malaysia through M/s.Sre Ranga Logistics. The court noted that these were factual issues to be established before the appropriate authority and not within the purview of the writ petition.

The court directed the petitioner to remit a one-time tax of ?10,61,845 as quantified in the compounding notice. After payment of the tax, the petitioner could avail other remedies under the Act. Upon remittance of the tax, the respondent was ordered to release the goods immediately. The writ petition was disposed of without any costs, and the connected miscellaneous petition was also closed.