2015 (7) TMI 464 - HC - VAT and Sales Tax

Detention order - goods detained at border - requisite documents as prescribed in Section 67 of the TNVAT Act - respondent himself has admitted that the goods are moved from one State to another State, without looking into the Invoice to check whether the TIN Number has been properly mentioned or not, the said authority hurriedly passed the impugned detention order. - Held that - A cursory reading of the circular dated 17.07.2014 depicts that movement of goods accompanied with a valid invoice satisfies the provisions of Section 68 of the TNVAT Act and thus, there is no offence falling under Section 71(5)(a) of the TNVAT Act and that the composition of offence under Section 72 (1)(a) of the TNVAT Act is possible only in case of a dealer s failure to pay or attempt to evade any tax payable under the Act. It further states that failure to file monthly return for previous months is not an offence relatable to movement of the goods. Therefore, though, in the case on hand, requisite documents have been produced as stated above, the first respondent has not followed the above said procedure while detaining the goods. Further, this Court also, on perusal of the typed set of papers filed in support of the writ petition, is able to see the TIN Number mentioned in the Invoices, as it is admittedly mentioned as TIN No.33270460111 of M/s.Indian Oil Corporation Limited / Consignee, therefore, in such view of the matter, for the reasons stated above, the impugned order is deserved to be set aside. - Decided in favor of assessee.

Summary

Issues:
Detention of goods for alleged lack of valid documents under TNVAT Act.

Analysis:
The petitioner entered into a contract with Indian Oil Corporation Limited (IOCL) for providing 'Retail Visual Identity' at various outlets in Tamil Nadu. The petitioner raised invoices and dispatched goods to dealers of IOCL. However, the goods were detained by the first respondent at a check post, alleging lack of valid documents for interstate movement. The petitioner contended that the goods were accompanied by proper documentation, including the Consignee TIN number, and challenged the detention order.

The Government Advocate (Tax) representing the respondents admitted that the goods were moved with proper documentation, including the TIN number of the consignee. The legal provisions under Section 67(5) of the TNVAT Act and Rule 15(3) of the TNVAT Rules were examined. It was noted that the detained vehicle had the required Invoices and LR Copy, fulfilling the document requirements during transit. The detention order based on lack of documents was deemed unjustified.

Referring to relevant case laws, the judgment highlighted that authorities cannot demand compounding fees or collect tax at check posts without proper assessment or evidence of tax evasion. The circular issued by the Principal Secretary/Commissioner of Commercial Taxes emphasized that movement of goods with a valid invoice does not constitute an offense under the TNVAT Act. The circular clarified that failure to file monthly returns is not an offense related to the movement of goods.

Upon review, the Court found that the TIN number was correctly mentioned in the Invoices, and the detention order lacked valid grounds. The judgment directed the first respondent to release the vehicle and goods immediately upon production of a copy of the order. The writ petition was allowed without costs, and connected miscellaneous petitions were closed.