2019 (10) TMI 530 - HC - VAT and Sales Tax

Release of seized goods - readymade garments - export goods or inter-state sale - TNVAT ACT - HELD THAT - Admittedly the goods in question, according to the appellant, had been emanated from their office at Calcutta and it was meant for export to Kuala Lumpur, Malaysia through Chennai port and on the way it has been kept for short while at the godown and therefore it was not meant for any local sale or interstate sale, therefore the goods in question are not liable to be taxed under the provisions of the TNVAT Act - However, prima facie the documents produced by the appellant would disclose the fact that, the address given by the appellant does not have any IE code or TIN number, as the appellant had not registered its office at West Bengal under the said State Taxation Law. Moreover, those documents such as Bill of lading, invoice and road challan produced by the appellant were found bogus by the Revenue. In order to rebut the same, there has been no documents from the side of the appellant and no plausible or acceptable arguments have been made on the side of the appellant. The appellant has not made out any case to release the goods in question either without paying the tax or with execution of bank guarantee alone - Appeal dismissed.

Summary

Issues:
1. Interpretation of TNVAT Act 2006 regarding taxation on goods meant for export.
2. Validity of detention notice issued by Revenue for alleged tax evasion.
3. Consideration of documents provided by the appellant to prove goods were meant for export.
4. Comparison with a previous Division Bench judgment for similar issues.
5. Justifiability of the writ court's decision to uphold Revenue's compounding notice.

Analysis:
1. The appellant filed a writ petition challenging a Goods Detention Notice issued by the Revenue, claiming the goods kept at a godown were meant for local or interstate sale to evade TNVAT Act taxes. The writ court upheld the Revenue's decision, directing the appellant to pay a one-time tax of ?10,61,845 for release of goods.

2. The appellant argued that the goods were intended for export to Malaysia, not for local sale, and submitted necessary export documents to the Revenue. The appellant contended that detaining goods without accepting documents or bank guarantee was unjustified.

3. The Additional Government Pleader for the Revenue countered, stating the appellant's documents were found to be bogus, lacking proper registration under TNVAT and CST Act. The Revenue issued a compounding notice for one-time tax payment due to non-response from the appellant.

4. The appellant cited a Division Bench judgment in a different case to support their argument for releasing goods without paying tax, based on a security guarantee. However, the court distinguished the present case due to lack of genuine documents and registration.

5. The High Court dismissed the appeal, upholding the writ court's decision. The court found the Revenue's actions justified, considering the lack of genuine documents and registration by the appellant, leading to the compounding notice for tax payment and subsequent release of goods.

This detailed analysis of the judgment highlights the key legal issues, arguments presented by both parties, and the court's reasoning for upholding the decision regarding taxation on goods meant for export and the validity of the detention notice issued by the Revenue.