2015 (6) TMI 1202 - HC - VAT and Sales Tax

Compounding of offence - release of detained goods alongwith vehicle - case of petitioner is that the second respondent has no jurisdiction or authority, as he is not the assessing authority to compound the offence on receiving the amount - Circular No.33/2014 Q4/7752/2014 dated 17.7.2014 - HELD THAT - Mere reading of Rule 15(1) 15(4) of the TNVAT Rules says that the officers of Commercial Taxes Department not below the rank of Deputy Commercial Tax Officer shall be the officer prescribed for the purposes of Sections 65, 66, 67, 68 and 69. Although this may be so, the Circular No.33/2014 Q4/7752/2014 dated 17.7.2014 issued by the Principal Secretary/Commissioner of Commercial Taxes, Chennai clearly shows that the movement of goods, if accompanied with a valid invoice, would satisfy the provisions of Section 68 of the TNVAT Act, hence, there is no offence falling under Section 71(5)(a) of the TNVAT Act. Further, when Rule 15(1) totally excludes the operation of Section 72(1)(a) of the TNVAT Act and also for the reason that the movement of goods were accompanied with valid invoices as per Section 68 of the TNVAT Act, the impugned goods detention notices issued by the second respondent in both the writ petitions are liable to be set aside. The impugned orders are set aside and the respondents are directed to release the goods forthwith to the petitioners on production of a copy of this order - Petition allowed.

Summary

Issues:
Challenging impugned goods detention notices; jurisdiction of roving squad/checkpost officer to compound offense; validity of goods detention without valid grounds; interpretation of Circular No.33/2014 Q4/7752/2014; applicability of TNVAT Act provisions; release of detained goods based on valid transport documents.

Analysis:
The judgment involves two writ petitions challenging goods detention notices issued by Commercial Tax Officers. The petitioners, engaged in the business of glass, plywoods, and building materials, faced detention of goods during transportation. The petitioners argued that the detention was based on suspicion without valid grounds and that the roving squad/checkpost officer lacked jurisdiction to compound offenses. They cited Circular No.33/2014 highlighting the need for diligent enforcement and proper application of statutory provisions during vehicular checks.

The petitioners contended that the officers detained goods without issuing notices to drivers and directly issued show cause notices for composition of offenses under Section 72 of the TNVAT Act. They emphasized that the roving squad officer lacked authority to compound offenses without valid grounds and without the petitioner's consent. The petitioners also referenced previous court judgments to support their arguments regarding the jurisdiction of assessing officers and the limitations of roving squad officers in compounding offenses.

In response, the Additional Government Pleader failed to provide a substantial reply to the jurisdictional issues raised by the petitioners. The court considered the arguments from both sides along with the contents of Circular No.33/2014. The Circular emphasized the importance of proper enforcement procedures and highlighted that the movement of goods with valid invoices should not result in detention under Section 71(5)(a) of the TNVAT Act.

The court analyzed the TNVAT Rules, specifically Rule 15, which designates officers for the enforcement of various sections of the Act. The court noted that the Circular and Rule 15 supported the petitioners' position that detention based on valid transport documents was unjustified. Consequently, the court set aside the impugned goods detention notices and directed the immediate release of the goods to the petitioners upon the production of a copy of the court's order. The writ petitions were allowed, and the court closed the related motions without imposing any costs.