2015 (10) TMI 2805 - HC - VAT and Sales Tax

Detention of goods on the ground of mis-classification - demand for security deposit at twice the value of tax sought to be evaded - HELD THAT - The detention has been made by the Checkpost authorities, which can be only on the ground of suspicion of evasion of tax. A mere misclassification, which is discernible from the records, cannot lead to a conclusion of evasion. The issue with respect to whether the higher rate of tax is applicable cannot be looked at as an issue of evasion of tax. In any event, the petitioner shall be allowed release of goods on execution of a simple bond and adjudication proceedings shall be completed expeditiously untrammeled by any observation herein, but however regulated by the judgments of this Court. Petition disposed off.

Summary

The High Court of Kerala ruled in favor of the petitioner, a dealer transporting Multi-Function Printers interstate. The detention of goods at the Checkpost was due to misclassification, not tax evasion. The petitioner can release the goods by executing a simple bond, and adjudication proceedings should proceed promptly as per court judgments. The writ petition is disposed of.