The Madras High Court, while releasing the goods detained by the Commercial department, held that the genuineness of a consignment cannot be suspected merely because the commercial invoice contains wrong address of the notified party.
In the instant case, petitioner, M/s Magnetic Auto Controls Pvt. Limited imported goods from Brazil, which was later detained by the department by stating that in the commercial invoice, the notified party is the petitioner company with an address at Kottivakkam, Chennai-41. The department suspected the nature of transaction that there is a likelihood of disposal of the imported goods within the State of Tamil Nadu and the concern with office at Kottivakkam being not registered in the Tamil Nadu under the provisions of the Tamil Nadu Value Added Tax Act or Central Sales Tax Act, detained the goods.
Before the High Court, the petitioner contended that in the commercial invoice the consignee is the petitioner with their unit at Pondicherry. It further stated that as per the airway bill, the consignee is at Pondicherry and imported equipment is required for their own purposes and is being transported to Pondicherry.
The bench accepted the contentions of the petitioner that the respondent was required to consider as to merely because the notified party in the commercial invoice contains an address in Chennai, can the transaction be suspected to be one for sale within the State of Tamil Nadu.
“In fact, when the Detention Notice was issued on suspicion, there was no tangible material available with the officer to suspect that the imported goods were intended for sale in Tamil Nadu. Therefore, when the petitioner raises objections, the respondent was bound to consider the contention put forth on the side of the petitioner and take a decision as to whether equipment was imported for their factory at Pondicherry. Since the equipment was a costly equipment and the import was a time bound, the petitioner had paid the one time tax and the goods have been released,” the bench said.
Read the full text of the Order below.
