Transit-check detention fails where the underlying entry tax levy is inapplicable to the goods.

Detention and demand under the transit-check provisions could not be sustained where the underlying levy was inapplicable to the goods. The notice assumed that entry tax was payable on an excavator under the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990 and treated non-payment as a basis for detention and security demand. The court noted that the excavator was not exigible to entry tax and that its purchase in Karnataka on payment of central sales tax was undisputed, so the action rested on an inapplicable taxing provision. The detention notice and consequential demand were therefore without jurisdiction and liable to be set aside.

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Issues: Whether the impugned detention and demand could be sustained when entry tax was not applicable to the excavator and the action was founded on an alleged non-payment of such tax.

Analysis: The notice proceeded on the footing that entry tax under the Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990 was payable on the excavator and that the goods could be detained for non-payment. The Court noted that the excavator was not exigible to entry tax, that the purchase at Karnataka on payment of central sales tax was not disputed, and that the impugned action was therefore based on an inapplicable taxing provision. In such circumstances, the exercise of power under Section 42(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 to detain the goods and demand tax or security could not be justified.

Conclusion: The detention notice and consequential demand were without jurisdiction and were liable to be set aside.

Ratio Decidendi: A detention and demand under the transit-check provisions cannot be sustained where the levy itself is inapplicable to the goods, because the action then rests on an absence of jurisdiction.

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