2016 (9) TMI 120 - HC - VAT and Sales Tax

Demand of security deposit - detention of consignment mandatory Form-15 was not accompanied suspection that the consignment was for sale Held that - The statute clearly says that the transport has to be accompanied by either a tax invoice or delivery note or certificate of ownership containing such particulars as may be prescribed. The delivery note not produced. Reference is made to Rule 58(16) which insists for a delivery note in Form No.15 for stock transfer - the petitioner is a registered dealer and goods are being taken by way of stock transfer as evident from 8 F of Declaration the goods can be released on condition of the petitioner remitting 25% of the amount simple bond required for the balance amount.

Summary

Issues:
Challenging detention and demand for security deposit due to missing delivery note for stock transfer.

Analysis:
The writ petition challenges the detention of an excavator consignment by the petitioner and the demand for a security deposit of Rs. 6,38,000 due to the absence of Form 15 (delivery note) as per Ext.P7. The petitioner claims it was a stock transfer from their Cochin office to Bangalore, supported by an invoice (Ext.P1) and details in Form No.8, declaring the consignment as Excavators and parts.

The petitioner argues that there is no mandatory requirement for producing the delivery note as stated in Ext.P7 and seeks the release of goods without the security deposit. However, the Government Pleader contends that the delivery note in Form 15 is mandatory under Section 46(3) of the Act and Rule 58(16) of the Rules for transporting goods. Despite producing Ext.P1 as an invoice, it is not a tax invoice and cannot substitute the delivery note as required by law.

The statute mandates that goods in transport must be accompanied by a tax invoice, delivery note, or certificate of ownership. Since Ext.P1 lacks tax details and no delivery note was presented, the detention of goods is deemed justified. The authority is within its rights to demand the security deposit until the necessary documents are provided. Even though the delivery note was later submitted, the court, considering the petitioner's status as a registered dealer and the nature of the transfer, orders the release of goods upon payment of 25% of the amount involved and a simple bond for the balance.

In conclusion, the court rules that the goods shall be released upon the petitioner remitting 25% of the amount specified in the detention order and providing a simple bond without sureties for the remaining balance. Additionally, the respondent is directed to complete the adjudication proceedings within two months from the date of receiving a copy of the judgment.