2017 (1) TMI 745 - HC - VAT and Sales Tax

Court orders release of wind generator parts upon tax payment, balancing revenue interests.

M/s. Paramount Shipping Services Pvt. Ltd. Versus The Deputy Commercial Tax Officer

M/s. Paramount Shipping Services Pvt. Ltd. Versus The Deputy Commercial Tax Officer - TMI Issues:Challenge to Goods Detention Notice and Compounding Notice.Analysis:The petitioner, a Customs House Clearing and Forwarding Agent, filed a writ petition challenging the Goods Detention Notice and Compounding Notice issued by the respondent. The petitioner acted on behalf of Suzlon Energy Limited (SEL) and alleged that the detention of goods, specifically Hub Body parts of wind operated electricity generators, was due to a discrepancy in values reflected in the forms. The respondent had issued notices to the driver and the petitioner regarding the discrepancy. The petitioner contended that the goods were detained during transportation from Chennai Port to Pondicherry due to the value inconsistency.The petitioner supported their case with various documents, including purchase orders, invoices, and exemption certificates. However, the respondent, represented by Mr. Venkatesh, argued that the goods were undervalued and raised doubts about the origin of the goods. The respondent also pointed out discrepancies in the declaration made by the driver regarding the goods.Upon hearing both parties and examining the records, the court acknowledged the understated value in one of the forms and the import of goods by SEL from a specific supplier. The court noted that even if tax liability existed under the TNVAT Act, it should be imposed at a rate of 5% for goods like wind mill components used for electricity generation. The impugned notice sought to levy tax at a higher rate based on the total value of the goods, including duty.The court, considering the circumstances, directed the release of the goods upon payment of tax at a rate of 5% of the understated value, with a personal bond for the remaining amount. This decision aimed to secure the interest of revenue while allowing for further contentions to be raised before the adjudicating authority by the petitioner or SEL. The judgment concluded by disposing of the writ petition without any costs.In conclusion, the judgment addressed the challenge to the detention and compounding notices, highlighting the discrepancies in values, import details, and tax implications under the TNVAT Act. The court's decision balanced the interests of the parties involved and provided a resolution for the release of the goods pending further adjudication.