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of <h1>Writ Petition Granted: Imported Equipment for Personal Hospital Use Exempt from Registration</h1> <h3>M/s. Eye Foundation Ltd. Versus The Joint Commissioner (Commercial Taxes), The Commercial Tax Officer</h3> The High Court allowed the Writ Petition, quashing the challenged order due to the verified personal use of the imported equipment in the hospital, ... Detention of imported goods - import of surgical and other allied equipments - the goods imported by the petitioner from Germany on 18.04.2017, was sought to be detained and one time tax has been demanded and compounding fee being two times of the one time tax has also been demanded - Held that: - The import effected by the petitioner has not been disputed by the second respondent, rather admitted as the petitioner has a valid import licence. In such circumstances, the only fact that has to be ascertained is whether the suspicion in the minds of the second respondent that the goods are meant for sale within the State of Tamil Nadu is correct or not. For this purpose, this Court directed the Joint Commissioner (CT), Enforcement, Coimbatore, to submit a report. Upon due verification, a report has been submitted, which clearly states that the imported equipment is used by the petitioner in their hospital. This goes to show that the import has been effected by the petitioner using the import licence granted in their favour and the goods are put to use in their hospital. Thus, there is no grounds to treat the transaction as a sale within the State of Tamil Nadu - petition allowed - decided in favor of petitioner. Issues:1. Challenge to detention and tax demand on imported goods2. Allegation of harassment and procedural irregularities3. Determining if imported equipment was intended for sale within the State4. Requirement of registration under TNVAT Act and CST Act5. Verification of imported equipment's use in hospitalAnalysis:Issue 1: Challenge to detention and tax demand on imported goodsThe petitioner, a hospital specializing in eye surgery, challenged the order seeking detention of goods imported from Germany and imposition of one-time tax and compounding fee. The petitioner argued that the import was legitimate and solely for personal use in the hospital. The respondent treated the import as a sale within Tamil Nadu, triggering tax demands. The petitioner contended that the actions were harassment and violated established procedures.Issue 2: Allegation of harassment and procedural irregularitiesThe petitioner claimed that the respondent's actions were unwarranted harassment, as the import was lawful and for personal hospital use. The petitioner argued that they were not engaged in commercial activities in Tamil Nadu, hence not required to register under TNVAT Act or CST Act. The lack of a personal hearing, deemed mandatory by a circular, was also highlighted as a procedural flaw.Issue 3: Determining if imported equipment was intended for sale within the StateThe core issue revolved around whether the imported equipment was being used by the petitioner in their hospital or intended for sale within Tamil Nadu. The Court directed an inspection to verify the equipment's usage, emphasizing that if used in the hospital, the petitioner cannot be considered a dealer necessitating registration under tax laws.Issue 4: Requirement of registration under TNVAT Act and CST ActThe respondent argued that registration under TNVAT Act and CST Act was necessary for tax concessions, which the petitioner, as an unregistered dealer, was not entitled to. The burden of proving the sale occurred outside the state was placed on the petitioner. However, the inspection report confirmed that the imported equipment was indeed being used for eye surgery in the hospital, negating the need for registration and tax liabilities.Issue 5: Verification of imported equipment's use in hospitalFollowing the Court's direction, a verification report confirmed the petitioner's use of the imported equipment for eye surgery in the hospital. The report dispelled the suspicion of the goods being intended for sale within Tamil Nadu, leading to the quashing of the impugned order and closure of the case without costs.In conclusion, the High Court allowed the Writ Petition, quashing the challenged order due to the verified personal use of the imported equipment in the hospital, eliminating the need for registration and tax liabilities.
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