2012 (11) TMI 614 - HC - VAT and Sales Tax

Release of Goods detained e transit pass - held that - All the documents clearly show that the goods are consigned from the State of Tamil Nadu to another State covered by valid documents under Section 69 of the TNVAT Act 2006 including transit pass as required was caused to be delivered at the time of crossing the last check post or barrier. In this case, the petitioner has caused to deliver the e-transit pass which is valid for transit on or before 3.11.2012 at 1.57 pm and hence the rule is complied. Therefore, the authority is bound to consider the same for release of the goods detained once the requirement of Section 70(2) of the TNVAT Act 2006 and the Rule has been complied. Since the petitioner in this case has submitted the required documents issued by a competent authority, there is no manner of doubt that the Detention Notice has no force in law and liable to be set aside and accordingly, the same is set aside - Consequently, the proceedings under Section 72 of the TNVAT Act 2006 for composition of offence has no legs to stand as it is a consequential order. Hence, the Notice of Composition is also set aside - In the result, the impugned order in both the writ petitions are set aside. The Writ Petitions are allowed. No costs. Consequently, connected miscellaneous petitions are closed.

Summary

Issues:
1. Validity of Goods Detention Notice dated 02.11.2012 in G.D.N.No.142/2012-13.
2. Validity of compounding Notice dated 04.11.2012 in G.D.No.142/2012-13 under the Tamil Nadu Value Added Tax Act.

Issue 1: Validity of Goods Detention Notice:
The petitioner transported liquor from Tamil Nadu to Goa, and a Goods Detention Notice was issued due to the absence of a valid E-transit pass for alcoholic liquors as required by Section 70(2)(a) of the TNVAT Act, 2006. The petitioner later produced an E-transit pass, but the authority refused to accept it, leading to detention. The petitioner argued that the pass was validly issued and should have been considered, preventing detention. The respondent confirmed the validity of the E-transit pass. The court held that as per Section 70(2)(b), the authority must release goods upon delivery of the transit pass before crossing the last check post, meeting the prescribed time limit. Since the petitioner complied by delivering the pass within the specified period, the detention was deemed unlawful, and the Goods Detention Notice was set aside.

Issue 2: Validity of Compounding Notice:
Concurrently, a notice for compounding the offense under Section 72 of the TNVAT Act, 2006 was challenged. However, since the detention itself was found to be unjustified due to the valid E-transit pass, the compounding notice was also deemed baseless. The court ruled that as the detention was unlawful, the subsequent compounding proceedings had no legal standing. Consequently, the compounding notice was set aside along with the Goods Detention Notice. The court allowed both writ petitions, noting that all necessary documents were submitted by the petitioner in compliance with the law, leading to the dismissal of the detention and compounding notices. No costs were awarded, and the petitions were allowed, closing all connected miscellaneous matters.

This comprehensive analysis of the judgment addresses the issues of the validity of the Goods Detention Notice and the Compounding Notice under the Tamil Nadu Value Added Tax Act, providing detailed insights into the legal arguments, statutory provisions, compliance requirements, and the court's final rulings on each issue.