Valid transport documents bar detention for return-filing default; check post officers cannot levy tax through compounding notices.

Goods accompanied by an invoice and other transport documents cannot be detained merely because monthly returns were not filed, since such non-filing is not itself an offence connected to the movement of goods under the Tamil Nadu VAT framework. The proper course in that situation is action for return-filing default or provisional assessment, not detention. A Check Post Officer also cannot assume the role of an Assessing Officer and issue a compounding notice demanding tax and compounding fee where the statute provides separate remedies. The detention and compounding proceedings were therefore quashed, while the department was left free to proceed for any independent violation in accordance with law.

---

---

Issues: (i) Whether the detention of goods was valid when the goods were accompanied by proper documents and the sole basis was non-filing of monthly returns. (ii) Whether the Check Post Officer could issue a compounding notice and call upon the dealer to pay tax and compounding fee.

Issue (i): Whether the detention of goods was valid when the goods were accompanied by proper documents and the sole basis was non-filing of monthly returns.

Analysis: The movement of goods was supported by an invoice and other documents. The governing circular clarified that such movement satisfies the requirements of Section 68 of the Tamil Nadu Value Added Tax Act, 2006, and that non-filing of monthly returns is not, by itself, an offence relatable to the movement of the goods. In such a case, the proper course is to proceed under the provisions applicable to default in return filing or to make a provisional assessment, not to detain the goods on that ground.

Conclusion: The detention of goods was invalid and was quashed.

Issue (ii): Whether the Check Post Officer could issue a compounding notice and call upon the dealer to pay tax and compounding fee.

Analysis: The officer functioning as a Check Post Officer could not assume the role of an Assessing Officer and levy tax through a compounding notice. The circular and the statutory scheme indicated that, where returns were not filed, action lay under Section 71(1)(a) of the Tamil Nadu Value Added Tax Act, 2006 or by provisional assessment under Section 25 of the Tamil Nadu Value Added Tax Act, 2006. The compounding notice was therefore beyond jurisdiction.

Conclusion: The compounding notice was without jurisdiction and was quashed.

Final Conclusion: The impugned detention and compounding proceedings could not be sustained, and the goods were directed to be released to the petitioner, while leaving the department free to proceed in accordance with law for any independent violation.

Ratio Decidendi: Where goods are accompanied by valid transport documents, detention cannot be justified merely on non-filing of returns, and an officer at a check post cannot impose tax or compounding fee in the guise of assessment when the statute provides separate remedies.

---