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2014 (9) TMI 851 - HC - VAT and Sales TaxDetention of goods - Undervaluation of goods - Evasion of tax - Held that - The respective petitioners shall pay the tax as demanded in the impugned notices, and on payment of tax as determined in the impugned notices, the respondent is directed to release the detained goods and is also at liberty to proceed further in respect of the composition notices issued to the respective petitioners, and the petitioner in all the writ petitions is also granted liberty to contest the same on merits and in accordance with law - Decided in favour of assessee.
Issues: Detention of goods under Tamil Nadu Value Added Tax Act, 2006
In this judgment, the petitioner, a registered dealer engaged in the purchase and re-sale of iron and steel, sold M.S. Melting Scrap to various registered dealers. The goods were transported in different vehicles and were intercepted by the respondent near a toll plaza. The respondent claimed that the goods were undervalued and the tax paid for the month of May, 2014, was meagre. The petitioner contended that the detention of goods was illegal and against the provisions of the Tamil Nadu Value Added Tax Act, 2006. The petitioner argued that goods can only be detained to prevent tax evasion and that the respondent had no authority to detain the goods under Section 67 of the TNVAT Act. The petitioner's counsel referred to Section 67(4) of the TNVAT Act, which states that detained goods should be released if tax is paid or security is furnished. The counsel also mentioned that notices of composition had been issued, and the petitioner intended to challenge them in separate writ petitions. The petitioner sought release of the detained goods by paying the tax as per Section 67(4) of the TNVAT Act. The Government Advocate representing the respondent argued that the writ petitions had become infructuous as notices of composition had been issued against the petitioner. The respondent suggested that the petitioner should pursue their remedy in accordance with the law. After considering the submissions and previous court orders, the High Court directed the respective petitioners to pay the demanded tax as per the notices. Upon payment, the respondent was instructed to release the detained goods. The petitioners were granted liberty to contest the composition notices issued to them. The court disposed of all writ petitions accordingly, without costs.
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