2016 (11) TMI 748 - HC - VAT and Sales Tax

Detention of goods - the goods are transported from Chennai to Madhya Pradesh and the amount quoted in the invoice and in the transit pass were not relevant to each other and the value of the invoice was more than the transit pass value i.e. three times - Form LL - payment of one time tax - Held that - the entire proceedings are out of total non-application of mind. The petitioner has clearly explained as to why the consignment covered in the single invoice was split up into three. The respondent has not disputed the fact that two of the consignments have already moved from the State of Tamil Nadu and so far as the impugned consignment is concerned, it was accompanied by proper documents and the explanation given by the petitioner for the variation in the quantity was reasonable and there is nothing on record to show that the said explanation was false. The Invoice Number in the Form LL, has been correctly shown. Therefore, there is absolutely no ground for detaining the cargo or issuing the Detention Notice or compelling the petitioner to compound, especially when no offence had been committed by the petitioner. Hence, it is held that the impugned Detention Notice is wholly without jurisdiction and illegal. The impugned detention notice is quashed and the petitioner is given liberty to approach the Assessing Officer to adjust the one time tax paid by the petitioner as against their regular tax dues - petition allowed - decided in favor of petitioner.

Summary

Issues Involved:
Challenge to Goods Detention Notice dated 06.04.2016; Reason for detaining goods; Non-application of mind in proceedings; Validity of Detention Notice; Jurisdiction and legality of Detention Notice.

Analysis:
The petitioner challenged the Goods Detention Notice dated 06.04.2016 after previously dealing with a similar issue in a previous Writ Petition. The reason for detaining the goods was discrepancies between the invoice and transit pass values, leading to safeguarding government revenue. The petitioner explained that the consignment under a single invoice was split into three vehicles, each with separate documentation. Despite explanations and submissions by the petitioner, multiple compounding notices were issued based on different reasons, showing a lack of application of mind by the authority.

The Court found that the proceedings lacked proper consideration as the petitioner had valid reasons for the consignment split and had provided adequate documentation. It was noted that two consignments had already left Tamil Nadu with proper documentation. The Court concluded that there was no valid ground for detaining the cargo or issuing the Detention Notice, especially since no offense was committed by the petitioner. Consequently, the Court held the Detention Notice as without jurisdiction and illegal.

As a result, the Writ Petition was allowed, the detention notice was quashed, and the petitioner was permitted to adjust the one-time tax paid against their regular tax dues. No costs were awarded in this matter. The connected Miscellaneous Petition was closed as a consequence of the judgment.