2015 (5) TMI 252 - HC - VAT and Sales Tax

Detention of vehicle - movement of vehicle was suspicious and it has unnecessarily entered into Sidco, Sundarapuram, instead of going to Puducherry - petitioner has contravened the provisions of Section 71 of Tamil Nadu Value Added Tax Act, 2006 - Held that - Admittedly, the impugned proceedings are the only show cause notice for composition of offence and draft compounding notice. It is well open to the petitioner to submit their objection and to satisfy the respondent that the goods were accompanied by proper documents. Merely because, the driver of the vehicle had gone into Sidco Sundarapuram will not make the transportation of goods in any manner as illegal or in contravention of the provisions of the Act. However, without submitting their objection, the petitioner has approached this Court directly. - petitioner submitted that the petitioner is ready and willing to submit their objection before the respondent, however, in the interregnum period, the vehicle may be released. - Therefore, there shall be a direction to the respondent to release the vehicle in question, subject to the certain conditions - Decided conditionally in favour of assessee.

Summary

Issues:
1. Quashing of Show Cause Notice for composition of offence and Draft Compounding Notice.

Analysis:

The petitioner filed a writ petition seeking to quash the Show Cause Notice and Draft Compounding Notice issued by the respondent regarding an alleged offence under the Tamil Nadu Value Added Tax Act, 2006. The petitioner's vehicle was detained for verification as it was suspected of deviating from its intended route. The notices demanded a total amount of Rs. 3,26,250, including a tax component of Rs. 1,08,750. The petitioner contended that the goods being transported were accompanied by proper documents, including an invoice, Goods Way Bill, and transit pass issued by the Karnataka Government. The petitioner argued that the driver had briefly entered a different location to collect pending freight charges, which should not cast doubt on the legitimacy of the goods' movement.

The court noted that the impugned notices were the only communication from the respondent and directed the petitioner to submit objections to the show cause notice before approaching the court directly. The court emphasized that the mere entry of the vehicle into a different location en route did not render the transportation illegal. The petitioner was instructed to present their objections to the respondent to clarify the situation.

The petitioner expressed readiness to submit objections to the respondent but requested the release of the vehicle in the meantime to avoid financial hardship and potential damage to the goods. The court ordered the respondent to release the vehicle upon the petitioner's payment of the demanded tax and submission of written objections to the show cause notice. The respondent was directed to consider the objections and issue a decision within three weeks of receiving the petitioner's response.

In conclusion, the writ petition was disposed of with the above directions, and no costs were imposed. The connected miscellaneous petition was also closed as a result of the judgment.