2016 (12) TMI 563 - HC - VAT and Sales Tax

Detention of goods - compounding of offences - stock transfer - Form LL - whether the petitioner has complied with the provisions of Section 70(2)(b) of the said Act, which states that the seller or consignor or transferor or clearing and forwarding agent of the goods shall deliver or cause to be delivered within the prescribed period, the transit pass to the officer in-charge of the last check post or barrier, before the exit of the goods vehicle from the State? - Held that - It is not in dispute that the transit pass has been delivered to the officer in charge of the last check post namely Puzhal Out Check Post. It is only thereafter the vehicle has not left the State of Tamil Nadu. Since no untoward incident had taken place in the meantime and since it is admitted that the vehicle was moving with full load as per the invoice, there is no justifiable ground for detaining the vehicle. The respondent is directed to release the vehicle as well as the goods forthwith and ensure that the vehicle crosses Tamil Nadu border immediately - petition allowed - decided in favor of petitioner-assessee.

Summary

Issues:
Challenge to goods detention notice and compounding notice under the Tamil Nadu Value Added Tax Act, 2006.

Analysis:
The petitioner contested a goods detention notice and a compounding notice issued by the respondent concerning a vehicle transporting 80 air conditioners from Madhavaram to West Bengal as a stock transfer. The vehicle was detained because it crossed the Puzhal Out Check Post after the stipulated time limit mentioned in the transit pass. Subsequently, the vehicle was found within Tamil Nadu's border at Vadakarai, leading to the detention and issuance of the compounding notice citing a violation of Section 70(2)(b) of the Tamil Nadu Value Added Tax Act, 2006.

The compounding notice alleged that the vehicle did not leave Tamil Nadu's border as required, despite the transit pass being surrendered at the Puzhal Out Check Post. The petitioner claimed that the delay was due to the driver's wife falling sick, causing a delay in crossing the border. However, this explanation was not fully substantiated. The crux of the matter revolved around whether the petitioner complied with Section 70(2)(b) of the Act, which mandates delivering the transit pass to the last check post before the goods vehicle exits the state. Despite delivering the transit pass, the vehicle did not leave Tamil Nadu, leading to its detention.

The court found that since no untoward incident occurred during the delay, and the vehicle was moving with a full load as per the invoice, there was no justifiable reason for detaining the vehicle. Consequently, the court allowed the writ petition, set aside the impugned order, directed the respondent to release the vehicle and goods immediately, and ensure the vehicle crosses the Tamil Nadu border promptly. The judgment concluded with no costs imposed, and the related Writ Miscellaneous Petitions were closed.