2016 (4) TMI 95 - HC - VAT and Sales Tax

Refund claim of amount collected towards compounding fee - Detain of mix gold ornaments and released on collecting compounding fee - Proper due process of law not followed - Second respondent neither issued any notice nor passed any compounding order before collecting the compounding fee of ₹ 3,05,802/- from the petitioner for release of the goods - Held that - in view of the ground raised by petitioner that it would suffice, if a copy of the notice relating to compounding fee is served on the petitioner, so as to enable them to approach the competent authority for appropriate relief, the petitioner is directed to submit a representation for furnishing a copy of the compounding notice to the second respondent. On filing of such representation, the second respondent shall furnish a copy of the compounding notice as well as the letter submitted by the petitioner immediately. On receipt of the same, the petitioner is permitted to file revision before the authority concerned. On filing of such revision, the authority concerned shall entertain the same without raising any issue relating to limitation and thereafter consider and pass appropriate orders on merits and in accordance with law, after affording due opportunity of personal hearing to the petitioner. Since the place of business of the petitioner is at Gujarat, representation shall be made by the counsel on record for the petitioner, on which basis, the copy of the compounding notice shall be furnished to him. - Petition disposed of

Summary

Issues:
Challenge to orders for refund of compounding fee collected by second respondent without due process of law.

Analysis:
The petitioner, a registered dealer under the Gujarat Value Added Tax Act, sent mixed gold ornaments for approval but were returned without sale in Tamil Nadu. The goods were detained by the second respondent for verification, and a compounding fee of Rs. 3,05,802 was collected without proper notice or order. The petitioner challenged this action in the High Court.

The petitioner argued that valid documents accompanied the goods, showing they were sent for approval, and no compounding order was issued before collecting the fee. They requested a copy of the compounding notice to file a revision before the competent authority.

The Additional Government Pleader contended that the impugned orders were passed as per law, providing documents supporting the compounding notice and the petitioner's response.

After hearing both sides, the Court directed the petitioner to submit a representation for a copy of the compounding notice within a week. Upon receipt, the petitioner could file a revision without limitation issues, and the authority would consider and pass orders on merits after a personal hearing. Representation could be made by the petitioner's counsel due to their business location in Gujarat.

The writ petition was disposed of without costs, and connected Miscellaneous Petitions were closed.