2014 (8) TMI 373 - HC - VAT and Sales Tax

Detention of goods - Tax already paid - Held that - The only ground raised by the petitioner in this writ petition is that when the goods detained had already suffered tax, the authorities should not have detained the same. This being a pure question of fact, only the authority had to decide the same - petitioner shall pay the entire tax amount as an one time payment - petitioner shall execute a personal bond for the compounding fee along with the purchaser and shall also give an undertaking that they will appear before the authority concerned and co-operate with the adjudicating process - On compliance of the aforesaid conditions by the petitioner, the respondent is directed to release the goods detained to the petitioner forthwith - Decided partly in favour of assessee.

Summary

Issues:
Challenge to Goods Detention Notice and Release of Detained Goods

Analysis:
The petitioner, a registered dealer engaged in the business of False flooring and Raised Access Flooring in Gujarat, filed a writ petition to quash the Goods Detention Notice issued by the respondent in Chennai. The goods were detained during transportation for the buyer in Chennai due to the lorry driver's failure to provide proper invoices. The petitioner contended that the goods were transported with necessary documents and had already suffered tax. The respondent, represented by the Special Government Pleader, argued that the petitioner was not a registered dealer in Chennai and might not participate in the adjudicating process if the goods were released. The respondent suggested the petitioner pay the demanded tax amount as a one-time payment and provide a security or bank guarantee for the compounding fee.

Upon considering the arguments, the court noted that the key issue was whether the detained goods had already been taxed. Recognizing this as a factual matter to be decided by the authority, the court refrained from delving into the merits of the case. The court issued the following directives: the petitioner must make a one-time payment of the entire tax amount, execute a personal bond for the compounding fee along with the purchaser, and commit to cooperating in the adjudication process. Upon compliance with these conditions, the respondent was ordered to release the detained goods to the petitioner immediately. Additionally, the petitioner was instructed to subject themselves to any adjudication proceedings initiated by the respondent.

In conclusion, the Writ Petition was disposed of with no costs, and the connected miscellaneous petition was closed. The judgment balanced the interests of both parties by requiring the petitioner to fulfill certain conditions before the release of the detained goods, ensuring compliance with tax obligations and participation in the adjudication process.