2016 (4) TMI 1303 - HC - VAT and Sales Tax

Court Orders Release of Goods Upon Payment of Tax Compounding Amount

The Court directed the petitioner to pay the specified one-time tax compounding amount of Rs. 1,28,934 to secure the release of the detained goods and ... Release of detained goods - goods detained on the ground that there was no CST tax collected - Held that: - since the petitioner is willing to pay the one time tax amount of ₹ 1,28,934/-, the petitioner is directed to pay the said amount and on payment of the said amount, the respondent is directed to release the goods and the vehicles forthwith - petition disposed off. Issues involved:- Detention of goods for non-payment of CST tax- Authority of the Detention Notice- Levy of tax under CST Act- Compounding of one-time tax amountDetention of goods for non-payment of CST tax:The petitioner, a manufacturer and dealer in Cotton Bales, entered into a contract for the sale of 125 cotton bales. The goods were detained by the Commercial Tax Officer on the grounds of non-collection of CST tax. The petitioner possessed relevant documents like Invoice, E-way bill, and lorry receipt. The petitioner challenged the detention, claiming it was without legal authority.Authority of the Detention Notice:The petitioner argued that the Detention Notice lacked legal authority. It was contended that under Sections 14 and 15 of the CST Act, the levy of tax by the State legislature should not exceed the prescribed rate of 5%. The petitioner sought the quashing of the compounding notice dated 26.03.2016 and the release of the goods.Levy of tax under CST Act:The petitioner expressed willingness to pay a one-time tax compounding amount of Rs. 1,28,934 to secure the release of the goods and the vehicle. The learned counsel for the petitioner emphasized this point, indicating the readiness to comply with the tax requirements under the CST Act.Compounding of one-time tax amount:In response, the Additional Government Pleader noted that upon payment of the tax amount, the goods and the vehicle could be released. The Court directed the petitioner to pay the specified amount, following which the respondent was instructed to release the goods and the vehicles immediately. The petitioner was also advised to file a Revision if aggrieved by the decision. The writ petition was disposed of with no costs, and related petitions were closed accordingly.