Detained goods may be released on tax payment under protest while separate composition proceedings continue independently.

Detained goods covered by an unquantified tax demand may be ordered released when the assessee pays the demanded tax under protest, consistent with the release mechanism under the Tamil Nadu Value Added Tax Act, 2006. The composition proceedings are distinct from the release question and may continue separately, while the assessee retains the right to contest the composition notice on merits and in accordance with law. The operative effect is immediate release of the goods on protested payment, without precluding independent adjudication of the compounding issue.

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Issues: (i) whether the detained goods were required to be released on payment of the tax demanded under protest; (ii) whether the composition notice could proceed independently, leaving the assessee free to contest it on merits.

Issue (i): whether the detained goods were required to be released on payment of the tax demanded under protest.

Analysis: The goods had been detained though the tax amount had not been quantified. The petitioner expressed willingness to pay the tax demanded under protest and sought release of the goods. Release of goods on such payment was consistent with Section 67 of the Tamil Nadu Value Added Tax Act, 2006, and the same course had been adopted in an earlier similar case.

Conclusion: The goods were directed to be released forthwith on payment of the tax as demanded under protest.

Issue (ii): whether the composition notice could proceed independently, leaving the assessee free to contest it on merits.

Analysis: The proceedings relating to compounding were treated as distinct from the release of goods. The authority was permitted to proceed further in respect of the composition notice, while preserving the petitioner's right to contest it on merits and in accordance with law under Section 72 of the Tamil Nadu Value Added Tax Act, 2006.

Conclusion: The composition proceedings were left open for decision on merits, with liberty to the petitioner to contest them.

Final Conclusion: The writ petition was allowed to the extent that the detained goods had to be released on payment of the demanded tax under protest, while the composition matter was left to be decided separately according to law.

Ratio Decidendi: Where detained goods are covered by the tax demand, release can be directed upon payment of the demanded tax under protest, while distinct composition proceedings may continue independently.

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