2017 (2) TMI 1155 - HC - VAT and Sales Tax

Court quashes order directing tax refund, emphasizes correct application of statutory provisions

The court quashed the compounding order dated 15.12.2016 under the Tamil Nadu Value Added Tax Act, 2006, directing the respondent to refund the tax and ... Detention of goods - local sale - detention on the ground that the subject goods were not accompanied by on-line Form JJ - whether the respondent could have detained the goods for want of on-line form JJ, when goods were being ferried for local sale? - Section 67-A of the 2006 Act - Held that: - The goods in issue were the notified goods, they were not entering the state from a place outside the state - Section 67-A of the 2006 Act had no application, and therefore, the petitioner could not have been called upon to produce on-line Form JJ, which is, the Form prescribed for advance inward way bill - petition allowed - decided in favor of petitioner. Issues:Challenge to compounding order dated 15.12.2016 under the Tamil Nadu Value Added Tax Act, 2006.Analysis:The petitioner, engaged in selling 'skin doors,' transported goods from Coimbatore to Chennai for sale to Star Ply. The goods were detained on 11.12.2016 for not being accompanied by online Form JJ, leading to a compounding notice demanding tax and fee. The petitioner paid the demanded amounts, following which the impugned compounding order was passed on 15.12.2016. The petitioner contended that the order lacked jurisdiction as the goods were detained for not having online Form JJ, which was not applicable since the goods were for local sale. The respondent argued that Section 67-A of the 2006 Act was correctly applied based on the Goods Detention Notice. The court examined the provisions of Section 67-A, which require the production of an advance inward way bill for goods entering the state from outside. However, as the goods were moving from Coimbatore to Chennai, within the state, this provision did not apply. The court held that the impugned order was unsustainable and quashed it, directing the respondent to refund the tax and fee already paid by the petitioner. The writ petition was disposed of with no costs.This judgment revolves around the detention of goods for not having online Form JJ during transportation for local sale. The key issue was whether Section 67-A of the 2006 Act, requiring an advance inward way bill for goods entering the state from outside, was applicable in this case. The court analyzed the language of the provision and the circumstances of the case to determine that the goods were moving within the state and thus, the requirement for online Form JJ did not apply. The court found that the impugned order lacked jurisdiction and was unsustainable, leading to its quashing and a direction for refund of the paid amounts to the petitioner.The court's decision was based on a strict interpretation of the relevant legal provisions and the specific facts of the case. By examining the nature of the goods, the origin and destination of transportation, and the requirements of Section 67-A, the court concluded that the respondent erred in applying the provision in this context. The judgment highlighted the importance of correctly applying statutory provisions and ensuring that actions taken by authorities are in accordance with the law. The petitioner's claim of the impugned order being passed without jurisdiction was upheld, emphasizing the need for adherence to legal requirements in such matters.