2015 (12) TMI 1475 - HC - VAT and Sales Tax

Detention of goods - petitioner has not raised any inter-state sale invoice or delivery notice in Form JJ required under CST Act - Imposition of compounding fees - Held that - petition stands disposed of with a direction to the respondents to release the goods forthwith on condition that the petitioner pays the one time tax of a sum of ₹ 2,13,516. As regards the compounding fee demanded, it is always open to the petitioner to agitate the same in the manner known to law - Appeal disposed of.

Summary

Issues:
Challenge to detention of goods in transit for alleged tax evasion and compounding fee demand.

Analysis:
The petitioner, an authorized dealer in electrical goods, challenged the detention of goods by the first respondent under GD No: 1070/2015-2016, alleging that the goods were transported from one state to another without proper documentation. The petitioner contended that the transaction was a transit sale falling under Section 3(b) of the CST Act. The petitioner sought the release of the detained consignment without being required to pay a one-time tax or compounding fee.

The petitioner argued that the goods were accompanied by a proper bill and were being moved as part of a sale in transit from one state to another. The petitioner claimed that the first respondent had no authority to detain the consignment in such circumstances. The petitioner emphasized that the demand for tax and compounding fee by the first respondent was unjustified.

On the other hand, the learned Government Advocate representing the respondents contended that the invoice produced upon interception of the goods indicated that they were being transported from one location to another without proper documentation for inter-state sale. The respondents argued that the petitioner failed to provide any sale invoice, especially an inter-state sale invoice or delivery note, to prove that the goods were intended for inter-state movement.

Ultimately, the court disposed of the writ petition by directing the respondents to release the goods upon the petitioner's payment of a one-time tax amounting to Rs. 2,13,516. The court allowed the petitioner to challenge the compounding fee demanded through appropriate legal channels. The judgment did not impose any costs on either party, bringing the matter to a close.