2016 (12) TMI 565 - HC - VAT and Sales Tax

Detention of goods - non-submissions of forms - Online Form KK - Transporter Form MM - Transporter L.R. - Held that - the respondent while passing the impugned order invoked Section 72(1)(a) of the Tamil Nadu Value Added Tax Act 2006 (hereinafter referred to as TNVAT Act ) and demanded double the amount of tax as if there is an evasion of tax. There is no finding in the compounding notice that the petitioner evaded payment of tax. The only reason for detention of the goods is the petitioner had produced a manual Form KK instead of a computed generated Form KK. The petitioner s explanation vide representation dated 20.11.2016 has not been considered nor referred to by the respondent though it has been acknowledged by the respondent as could be seen from the signature appended to the representation dated 20.11.2016. That apart in terms of Section 68 of the TNVAT Act the owner or person in charge of the goods should carry with them a Bill of sale or delivery note or such other documents as may be prescribed and Log book relating to the goods transported. Assuming that Form KK cannot be accepted the other documents which are all import documents could have been considered by the respondent. Therefore this Court has no hesitation to hold the computation done by the respondent in the compounding notice dated 18.11.2016 is not tenable - the petitioner is directed to pay a sum of 50, 000/- the tax calculated by applying the rate of tax under the Central Sales Tax Act at 2% and this Court has fixed the amount of 50, 000/- which is approximately 2% of the value of the goods viz. 20, 77, 467/-. On payment of the said amount the vehicle and goods shall be forthwith released - petition disposed off - decided partly in favor of assessee.

Summary

Issues:
Detention of goods at check post due to discrepancies in electronic forms; Invocation of Section 72(1)(a) of TNVAT Act for demanding double tax amount; Failure to consider petitioner's explanation; Interpretation of Section 68 of TNVAT Act regarding required documents for transportation of goods.

Analysis:
The petitioner, a Custom House Agent, cleared and forwarded a consignment to a company in Bangalore, which was detained at a check post on the grounds of discrepancies in electronic forms. The respondent demanded double the tax amount under Section 72(1)(a) of the TNVAT Act, alleging evasion, despite the petitioner's explanation that manual forms were used due to technical issues with the VAT website. The court noted that the detention was solely based on the use of manual forms, overlooking the import documents provided by the petitioner. The court found the respondent's computation untenable and directed the petitioner to pay a specific amount, equivalent to 2% of the goods' value, for release of the goods and vehicle.

The court emphasized that under Section 68 of the TNVAT Act, the transportation of goods requires specific documents like a bill of sale or delivery note, which were provided by the petitioner. The court held that even if the electronic Form KK was not acceptable, the other import documents should have been considered by the respondent. Consequently, the court ordered the release of the goods upon payment of the specified tax amount, rejecting the respondent's demand for double tax and highlighting the importance of considering all relevant documents in such cases.

In conclusion, the court disposed of the Writ Petition, directing the petitioner to pay a specific tax amount for the release of goods and vehicle, while emphasizing the necessity of considering all relevant documents in cases of goods transportation to avoid unjust detention and demands for excessive tax amounts.