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Issues: (i) Whether the earlier departmental circular could be relied upon after the Tamil Nadu Value Added Tax Act, 2006 came into force despite the requirement of a transit pass for inter-State movement of goods. (ii) Whether the detained goods were liable to be released on payment of tax under the detention provisions and whether composition of offence had to be dealt with separately.
Issue (i): Whether the earlier departmental circular could be relied upon after the Tamil Nadu Value Added Tax Act, 2006 came into force despite the requirement of a transit pass for inter-State movement of goods.
Analysis: The saving provision in Section 88(3)(i) preserves earlier clarifications only to the extent they are not inconsistent with the 2006 Act. Section 70(2)(a) specifically requires a transit pass when specified goods are moved to another State from within the State. Where the statutory requirement directly governs the movement, an earlier circular contrary to that mandate cannot prevail.
Conclusion: The circular could not override the statutory requirement under the Tamil Nadu Value Added Tax Act, 2006, and the petitioner's challenge on that basis was rejected.
Issue (ii): Whether the detained goods were liable to be released on payment of tax under the detention provisions and whether composition of offence had to be dealt with separately.
Analysis: Section 67(4) permits release of detained goods on payment of tax or security as required by the authority. The Court held that the petitioner was entitled to seek release on compliance with that provision and that the authority was bound to release the goods forthwith upon such payment. The matter of composition of offence under Section 72 was treated as a separate statutory process requiring independent consideration on merits.
Conclusion: The petitioner was entitled to release of the detained goods on payment of tax under Section 67(4), while composition proceedings were to be handled independently.
Final Conclusion: The writ petition was partly allowed in the sense that the detention could not continue after compliance with the statutory payment requirement, but the challenge to the applicability of the earlier circular failed, and composition of offence was left to independent statutory adjudication.
Ratio Decidendi: An earlier circular cannot displace an express and inconsistent statutory requirement under a later enactment, and detained goods must be released when the statute permits release upon payment of the prescribed tax or security.
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