Court orders release of detained goods upon payment of one-time tax & bond for compounding fee

The court ordered the immediate release of goods detained under a Goods Detention Notice, subject to the petitioner paying a one-time tax based on the goods' value in the notice. The petitioner, not a registered dealer in Tamil Nadu, was required to deposit the tax amount and provide a personal bond for a compounding fee. The court acknowledged the potential inter-state sale, allowing for future adjudication while ensuring revenue interests were served. The release was to be completed within a day of receiving the order copy, with no costs imposed on the parties.

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Issues involved:
Challenge against Goods Detention Notice dated 18.01.2017; Jurisdiction of respondents to detain goods; Inter-state sale claim by petitioner; Release of subject goods upon payment of one-time tax.

Analysis:
The writ petition challenged the Goods Detention Notice dated 18.01.2017, concerning goods imported from Hong Kong and cleared at Chennai port. The petitioner's goods were detained while in transit from Chennai to New Delhi for further transport to Ujjain. The petitioner argued that no sale occurred in Tamil Nadu based on the documents carried by the transporter. The respondents doubted the transaction's genuineness due to the goods being stored in a Chennai warehouse after customs clearance. The petitioner offered to pay one-time tax for immediate release, without prejudice to their rights. The respondents insisted on tax payment and a bank guarantee for compounding fee to release the goods.

The court examined the documents and acknowledged the possibility of an inter-state sale, which needed further adjudication. Since the petitioner was not a registered dealer in Tamil Nadu, the court considered releasing the goods upon payment of calculated one-time tax to serve the revenue's interest. The valuation for tax calculation would be based on the goods' value in the detention notice. The petitioner had to deposit the tax amount and provide a personal bond for the compounding fee before receiving custody of the goods. Both parties retained the right to present their contentions during the future adjudication on merits.

The court disposed of the writ petition by ordering the immediate release of the goods upon payment of one-time tax, to be completed within a day of receiving the order copy. The connected pending application was closed without any costs imposed.

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