M/s. South India Freight Carriers vs Deputy Commercial Tax Officer Villupuram District

V. Dhanapalan, J.—In this writ petition, a challenge has been made to the goods detention notice proceedings in G.D. No: 135/2012-13

dated 22.02.2013 seeking to quash the same as illegal and contrary to the provisions of the Tamil Nadu Value Added Tax Act, 2006. According

to the petitioner, they are engaged in transporting goods owned by M/s. Indian Oil Corporation Ltd. to various States in India. The consignee is

one M/s. Supreme Industries Ltd., an industry manufacturing plastic furniture at Puducherry and registered under Puducherry Value Added Tax

Act and Central Sales Tax Act. This consignor M/s. Indian Oil Corporation Ltd., hereinafter referred to as IOCL, has head office at 612 Raheja

Chambers, Mumbai. Plastic granules are sent from the factory of IOCL, Panipet, Hariyana State to the consignee at Puducherry. The movement of

goods are supported by proper sales invoice issued by the consignor. The value of the goods is Rs. 20,35,086/-. While so, according to the

petitioner, when the goods are on movement, i.e. when the vehicle passed through the first check post at Pethikuppam, Gummidipoondi, the

officials have not issued the required transit pass as per Section 70(a) of the Tamil Nadu Value Added Tax Act, hereinafter referred to as TNVAT

Act. The respondent checked the vehicle at Pattannur Check Post and detained the goods as the plastic granules transported was not supported

by transit pass and that the said goods fall under 6th Schedule of TNVAT Act. Therefore, the petitioner challenged the proceedings impugned

ordering detention of goods as if the authorities have failed to issue transit pass when the vehicle was checked at the first check post viz.

Pethikuppam, Gummidipoondi.

Counsel for the petitioner, on the above background and pleadings, submits that the petitioner followed the goods by maintaining the movement

register and without checking the same, the goods were detained contrary to the provisions of the TNVAT Act. He would further submit that the

petitioner is prepared to remit the entire tax liability as demanded in the impugned detention notice.

Per contra, Mr. Jayaprathap, learned Government Advocate (Taxes) submits that petitioner is neither the dealer nor the owner of the goods and

is only a transporter and, therefore, though he pays the tax liability, the payment of compounding fee has to be secured otherwise, lot of prejudice

would be caused to the department in collecting the said compounding fee. He also submits that though the petitioner has a right of revision before

the Joint Commissioner, it has not filed any revision so far.

Heard the learned counsel for the parties and perused the materials made available on record.

It is seen that the petitioner is a transporter, engaged in transporting goods owned by M/s. Indian Oil Corporation Ltd. to various States in

India. The consignee is an industry manufacturing plastic furniture at Puducherry and registered under the Puducherry Act and Central Sales Tax

Act. The consignor, M/s. Indian Oil Corporation Ltd., hereinafter referred to as IOCL, has head office at 612 Raheja Chambrs, Mumbai. Plastic

granules are sent from the factory of IOCL, Panipat, Hariyana State to the consignee at Puducherry and though the petitioner claims that the

movement of goods are supported by proper sales invoice issued by the consignor, while the goods worth Rs. 20,35,086/- were on movement,

i.e. when the vehicle passed through the first check post at Pethikuppam, Gummidipoondi, the officials have not issued the required transit pass as

per Section 70(a) of the Tamil Nadu Value Added Tax Act, hereinafter referred to as TNVAT Act. The respondent checked the vehicle at

Pattannur Check Post and detained the goods as the plastic granules transported was not supported by transit pass. Challenging the said order of

detention of goods, petitioner is before this Court.

The issue of transit pass is covered by Section 70(1)(a) of the Tamil Nadu Value Added Tax Act, 2006. The Section reads thus,

Issue of transit pass - (1)(a) When a goods vehicle carrying any goods mentioned in the Sixth Schedule, coming from any place outside the

State and bound for any other place outside the State, passes through the State, the owner or other person in charge of such goods vehicle shall

obtain a transit pass in the prescribed form and in the prescribed manner from the officer in charge of the first check post or barrier, after its entry

into the State.

From the reading of the above provision it is clear that owner or other person incharge of such goods should obtain the transit pass from the

authorities. In this case, the petitioner, as transporter, claims to be the person incharge of the goods and, seeks release of goods on payment of tax.

However, this claim of the petitioner is resisted by the learned Government Advocate (taxes) by contending that, the goods cannot be ordered

to be released only on payment of the sum of Rs. 1,19,360/- being the tax liability, but, the payment of Rs. 3,58,080/- being the compound fee

should also be duly secured by the petitioner by furnishing a bank guarantee. The contention of the learned Government Advocate merits

acceptance since, as rightly pointed out by the learned Government Advocate, the petitioner is neither the dealer nor the owner of the goods but is

only the transporter of the goods and hence, it would be difficult for the department to collect the compounding fee. Though the learned counsel

appearing for the petitioner has no objection to adopt the said course suggested by the learned Government Advocate, he submits that, without

prejudice to petitioner''s right of revision before the authority concerned, he is prepared to furnish bank guarantee for the compounding fee

demanded. Section 67(3)(b) of the Tamil Nadu Value Added Tax Act 2006 provides that the tax, if any, payable under this Act in respect of the

sale or purchase of the goods carried has not been paid, and if the officer is satisfied that, with a view to prevent the evasion of tax payable in

respect of the sale or purchase of the goods carried, it is necessary to detain the goods, he shall detain the goods and direct the driver or any other

person in charge of the goods vehicle, to pay such tax or to furnish adequate security in such form and in such manner and to such authority as may

be prescribed, on behalf of the person liable to pay such tax. In the light of the above stated position, this writ petition and the connected

miscellaneous petition, stands disposed of on the following terms:

(1) Petitioner shall pay the sum of Rs. 1,19,260/-, being the amount of tax demanded by the respondent, within a period of one week from the

date of receipt of a copy of this order.

(2) As regards the compounding fee, without prejudice to petitioner''s right to file a revision before the competent authority, the petitioner shall

furnish bank guarantee for the sum of Rs. 2,38,720/- being the compounding fee demanded by the respondent.

(3) As and when the petitioner complies with the aforesaid conditions, the respondent shall release the goods detained immediately.

There shall be no orders as to the costs.