Petitioner Must Pay Tax & Guarantee for Goods Release

The court directed the petitioner to pay the demanded tax amount of Rs. 1,19,260 within a week and furnish a bank guarantee for the compounding fee of Rs. 2,38,720. Upon compliance, the detained goods were to be released, resolving the challenge to the goods detention notice proceedings under the Tamil Nadu Value Added Tax Act, 2006.

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Issues: Challenge to goods detention notice proceedings under Tamil Nadu Value Added Tax Act, 2006

Analysis:
1. The petitioner challenged the detention of goods in a writ petition, claiming to be engaged in transporting goods owned by M/s. Indian Oil Corporation Ltd. to various states in India for M/s. Supreme Industries Ltd. The goods, plastic granules worth Rs. 20,35,086, were detained as they lacked a required transit pass at a check post, leading to the petition against the detention proceedings.

2. The petitioner argued that they followed proper procedures, maintaining a movement register, and were willing to pay the tax liability as demanded in the detention notice. On the other hand, the government advocate contended that the petitioner, as a transporter, needed to secure a compounding fee in addition to the tax liability, highlighting the department's difficulty in collecting the fee if not secured.

3. The court observed that as per Section 70(1)(a) of the TNVAT Act, the owner or person in charge of the goods vehicle should obtain a transit pass for goods mentioned in the Sixth Schedule when passing through the state. The petitioner, claiming to be in charge, sought the release of goods on payment of tax, which was opposed by the government advocate who emphasized the necessity of securing the compounding fee.

4. The judgment directed the petitioner to pay the demanded tax amount of Rs. 1,19,260 within a week and furnish a bank guarantee for the compounding fee of Rs. 2,38,720. Upon compliance with these conditions, the detained goods were to be released by the respondent, resolving the issue raised in the writ petition under the TNVAT Act, 2006.

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