2020 (5) TMI 498 - HC - VAT and Sales Tax

Court dismisses writ petition challenging transit goods detention, upholds compounding amount imposition.

Tvl. Aravind Thiru Ceramics Versus The Commercial Tax Officer, The Assistant Commissioner (CT)

The court dismissed the writ petition challenging the detention of goods in transit and alleged violation of tax laws. The petitioner's arguments based on ... Compounding of tax - sale of purchased goods - Ceramic Tiles - violation of Section 71(3) (a), 71(3)(d) and 71(7) of the TNVAT Act, 2006 - HELD THAT:- The respondent is the prescribed authority under Section 67 of the Tamil Nadu Value added tax Act, 2006. Therefore, it is for the petitioner to take advantage of the aforesaid option given by the respondent. If the respondent do not prosecute the petitioner for the violation of the provisions of the Act, the option given in the impugned proceeding is redundant.. In any event, the goods at the time of their detention at Vikravand Check post had accompanied the relevant invoice evidencing the sale and the tax payable thereon by the petitioner. Therefore, the respondent was in detaining the goods at the Check Post and in demanding the tax from the petitioner - there are no merits in the present writ petition on the ground that the petitioner had no jurisdiction to. Considering the value of the goods and the fact that the petitioner may be involved in in the transaction for the 1st time, the revenue can take sympathetic view and not initiate any prosecution proceedings - petition dismissed. Issues:1. Detention of goods in transit.2. Alleged violation of tax laws.3. Petitioner's challenge to impugned order.4. Legal arguments and precedents cited.5. Respondent's submission of lack of merit in the writ petition.6. Court's analysis and decision.Detention of Goods in Transit:The petitioner purchased Ceramic Tiles and sold them to another party while in transit. The goods were detained by the Commercial Tax Officer at a checkpoint with observations on the route deviation and lack of proper documentation, leading to the detention of the consignment.Alleged Violation of Tax Laws:The Commercial Tax Officer alleged that the petitioner violated specific sections of the Tamil Nadu Value Added Tax Act, 2006, leading to the imposition of a compounding amount. The petitioner was given an opportunity to pay the compounding amount after adjusting the tax already paid.Petitioner's Challenge to Impugned Order:The petitioner challenged the impugned order, citing various decisions of the court and the Supreme Court in similar cases. The petitioner argued for relief based on legal precedents and circulars issued by the Commissioner of Commercial Taxes.Legal Arguments and Precedents Cited:The petitioner's counsel relied on several court decisions and circulars to support the case, highlighting cases such as Shija Rubber Vs. The Check Post Officer and M/s. Jagadamba Traders Vs. The Commercial Tax Officer, among others, to strengthen the argument against the impugned order.Respondent's Submission of Lack of Merit in the Writ Petition:The respondent contended that the writ petition lacked merit and suggested that the petitioner had an alternate legal remedy available. The respondent argued for the dismissal of the writ petition due to the alleged lack of merits.Court's Analysis and Decision:The court considered the arguments presented by both parties and analyzed the impugned proceeding. The court noted that the respondent had given the petitioner an option to pay a differential amount, emphasizing the respondent's authority under the relevant tax law. The court dismissed the writ petition, stating that the petitioner could take advantage of the option provided by the respondent. However, the court suggested a sympathetic view by the revenue considering the petitioner's involvement in the transaction for the first time. The writ petition was ultimately dismissed with observations, and the connected miscellaneous petition was closed without any costs.