The Madras High Court ordered to pay Rupees one lakh as security penalty as the movement of the seized vehicle carrying diesel was without proper invoice and transport document in violation of the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act).
The petitioner, M/s.Kumutham Agencies, has challenged the impugned proceedings of the State Tax Officer-II, (Intelligence), to quash the same and direct the State Tax Officer (ST), to release the detention goods as illegal and contrary to the provisions of the Tamil Nadu Value Added Tax Act, 2006.
The specific case of the petitioner is that the aforesaid vehicle was carrying diesel, which is highly inflammable. Since the road between Cuddalore and Seerkazhi are under repair, the Driver took a different route and when the Driver was taking food, the Roving Squad came and seized the vehicle.
The counsel for the petitioner submitted that the explanation offered by the petitioner has not been accepted, as the vehicle had taken a different route to avoid jerk to reduce the risk of the vehicle catching fire while in transit.
The Government Advocate for the respondents on the other hand submitted that the impugned order detaining the goods and imposing penalty twice the amount of duty was well reasoned and does not require any interference. That apart, it is submitted that the petitioner has alternate remedy before the Commissioner and therefore, the petitioner should be relegated to work out the remedy before the Appellate Commissioner.
A Single Judge Bench of C Saravanan observed that “Although the counsel for the petitioner would submit that the petitioner is willing to pay the duty. As far as the penalty is concerned, the counsel for the petitioner would submit that the petitioner may be relegated to work out the remedy before the Appellate Commissioner. Fact remains that the movement of diesel was not covered with proper invoice and transport document. In any event, the petitioner was liable to pay the tax under Tamil Nadu Value Added Tax Act, 2006, on the goods.”
The Court further directed that considering the fact that the product in the vehicle is diesel which is prone to inflammable, Court is inclined to order provisional release of the vehicle, subject to the petitioner paying the disputed tax that has been arrived in the impugned order and a further sum of Rs.1,00,000/- (Rupees One Lakh Only) towards security penalty imposed within a period of seven days from the date of receipt of a copy of this order.
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