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2020 (5) TMI 500 - HC - VAT and Sales TaxRefund of compounding amount/fee paid for release of the goods detained - levy of compounding fee - contention of the respondent is that since the petitioner did not have registration for the site office, the transportation was improper and without payment of duty - HELD THAT:- The goods in question were directly dispatched by the manufacturer to the Petitioner’s site in Tirunelveli for being installed along with the other wind energy equipment at a later point time - The petitioner had not affected any sale of the goods when the goods was detained by the 1st respondent at the Paranoor Check Post near Chengalpet. It is at a later stage, a sale would have taken place by the petitioner to its customer. The detention of the goods on the assumption that the petitioner had already effected sale and that no tax was paid when the goods were in transit was is purely based on the assumption, presumption and conjecture. As and when the petitioner effects sale, the petitioner would be liable to pay tax. There was an error in assumption of jurisdiction by the 1st respondent Commercial Tax Officer namely the Check Post officer on the ground that the goods had not suffered tax as the manufacturer had indeed charged tax in the invoice raised on the petitioner. The 1st respondent not only erred in demanding tax at the Check Post from the petitioner after wrongly detaining the goods but also erred in asking the petitioner to opt for compounding of the alleged offence under section 72(1)(a) of the Tamil Nadu Value Added Tax Act, 2006 by asking the petitioner to pay the aforesaid amount of ₹ 2,74,048/-. Indeed, no case was made for detaining the goods in transit on the assumption that no tax was paid - Though the petitioner appears to have obtained VAT registration for its head office, it had not obtained separate registration for the site office as an additional place of business under Rule 5 (1) (a) of the Tamil Nadu Value Added Rules, 2007 read with Section 38 of the Tamil Nadu Value Added Tax Act, 2006. While upholding the invocation of Section 72(1) of the Tamil Nadu Value Added Tax Act, 2006, the composition fee ought to have been restricted to an amount not exceeding ₹ 2000/-under Section 72(1)(b) of the aforesaid Act - Petition allowed in part.
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