Detained goods release on tax payment and valid composition notice upheld under the Tamil Nadu VAT framework.

Detained goods were ordered to be released on payment of the tax demanded, because the statute contemplated release upon such payment under protest. The challenge to detention succeeded only to that extent, and no further relief was granted on the goods. The notice proposing composition of the offence was also upheld, as the composition procedure was treated as valid under the Tamil Nadu Value Added Tax Act, read with the applicable rules and prescribed authority framework. The authority was left to pass final orders on merits in the composition proceedings.

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Issues: (i) Whether the detained goods were liable to be released on payment of tax demanded under protest. (ii) Whether the notice proposing composition of the offence was in order.

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

Analysis: The writ petition challenged the detention notice and the consequential demand for tax and compounding fee. The petitioner expressed readiness to pay the tax under protest under Section 67(4) of the Tamil Nadu Value Added Tax Act, 2006. The governing provision contemplated release of the goods upon payment of the tax demanded.

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

Issue (ii): Whether the notice proposing composition of the offence was in order.

Analysis: Section 72 of the Tamil Nadu Value Added Tax Act, 2006 governed composition of offences. The provision was treated as analogous to the corresponding procedure under the Tamil Nadu General Sales Tax regime, and the prescribed authority was traced through Rule 53 of the Tamil Nadu General Sales Tax Rules as applied by Section 88(3)(i) of the Tamil Nadu Value Added Tax Act, 2006. On that basis, the composition notice was held to be legally sustainable, with the authority required to pass final orders on merits.

Conclusion: The notice for composition of offence was upheld as being in order.

Final Conclusion: The challenge to the detention was accepted only to the extent of securing release of the goods on tax payment, while the composition proceedings were left to be decided on merits by the authority.

Ratio Decidendi: Detained goods may be released on payment of the tax demanded where the statute so provides, and a composition notice issued under the governing statutory procedure is valid if it is referable to the prescribed authority and framework.

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