2016 (12) TMI 1306 - HC - VAT and Sales Tax

Detention of goods - goods detained on the basis of mere allegation - compounding of offences - jurisdiction of respondent to act as assessing officer - Held that - the respondent could not have detained the goods by comparing the contents of the Invoice, which accompanied the subject goods with the Department s website, and then, gone on to detain the goods on the ostensible ground that the petitioner has not filed his returns - the Compounding Notice issued by the respondent is beyond his jurisdiction, as he has donned the robes of an Assessing Officer, which is not permissible in law. Petition allowed in favor of petitioner.

Summary

Issues:
Detention of goods at Katpadi Check Post, validity of Detention Notice and Compounding Notice, jurisdiction of the respondent, applicability of Circular dated 17.07.2014, relief sought by the petitioner.

Detention of Goods at Katpadi Check Post:
The petitioner, a registered dealer, purchased Tin Oil Seeds from an entity in West Bengal and transported them to himself. Upon reaching Katpadi Check Post, the goods were intercepted, and the Lorry carrying them was detained on 04.12.2016. The Detention Notice cited reasons for detention related to the dealer's alleged failure to file returns, despite having relevant documents with the driver.

Validity of Detention Notice and Compounding Notice:
The petitioner challenged both the Detention Notice and the subsequent Compounding Notice dated 05.12.2016. The Compounding Notice required the petitioner to pay a tax amount and a compounding fee. The petitioner contended that the reasons in the Detention Notice were unsustainable, citing a Circular from the Principal Secretary/Commissioner of Commercial Tax, which indicated that detention based on non-filing of returns was not valid.

Jurisdiction of the Respondent:
The petitioner argued that the respondent, acting as a Check Post Officer, exceeded their authority by detaining the goods and issuing the Compounding Notice. The respondent's counsel acknowledged that the Circular referenced by the petitioner bound the respondent, and the actions taken were not in line with the Circular's provisions.

Applicability of Circular dated 17.07.2014:
The Circular highlighted that detaining goods based on a dealer's failure to file returns was not a valid reason and that such cases should be addressed through specific provisions of the law. The Circular emphasized the importance of following due process and not harassing dealers or transporters during checks.

Relief Sought by the Petitioner:
The Court, after considering the arguments and the Circular, quashed the impugned orders, directing the release of the detained goods to the petitioner. The judgment clarified that if there were any violations of tax laws by the petitioner, appropriate legal actions could still be taken. The Writ Petition and pending applications were closed without any costs imposed.

---