Detention for manual Form KK usage was unsustainable where transport documents were ignored and no evasion finding was recorded.

Detention of goods based on a manually issued Form KK, rather than an electronically generated form, was found unsustainable where the transporter explained that the electronic system was temporarily unavailable and that explanation was not addressed. The demand under the Tamil Nadu Value Added Tax Act, 2006 was also treated as improper because it proceeded as if there was tax evasion without any recorded finding of evasion, and the accompanying transport and import documents had to be read as a whole under Section 68. The compounding computation was therefore unsustainable, and release of the vehicle and goods was ordered on payment of a reduced amount.

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Issues: Whether the detention of goods and the compounding demand based on the use of a manual Form KK instead of an electronically generated Form KK were sustainable, and whether the goods were liable to be released on payment of a reduced amount.

Analysis: The detention was founded on verification of transport documents and the absence of a transporter L.R., but the explanation that the electronic system was temporarily unavailable was placed on record and not dealt with by the respondent. The demand was made under Section 72(1)(a) of the Tamil Nadu Value Added Tax Act, 2006 as though there was tax evasion, although no finding of evasion was recorded. The Court also noted that Section 68 of the Tamil Nadu Value Added Tax Act, 2006 required the accompanying documents to be considered as a whole, and the other import documents could not have been ignored merely because Form KK was manually prepared.

Conclusion: The compounding computation was held unsustainable. The petitioner was directed to pay Rs. 50,000 and, on such payment, the vehicle and goods were to be released forthwith.

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