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M/s. Krishna Timber & Plywood v/s State of Tamilnadu, rep. By its Principal Secretary to Government, Commissioner of Commercial Taxes, CT & Re Department & Others

    W.P. No. 5470 of 2011

    Decided On, 19 May 2020

    At, High Court of Judicature at Madras


    For the Petitioner: S. Raveekumar, S. Prabhakaran, Advocates. For the Respondents: R. Swarnavel, G.A.

Judgment Text

(Prayer:Writ Petition filed under Article 226 of the Constitution of India praying to issue Writ of Certiorarified mandamus, calling for the records relating to the proceedings of the 2nd respondent in Ref.No.RP.No.65/2010 dated 23.11.2010 quash the same and consequently direct the 3rd respondent to issue refund order for compounding fees of Rs.1,35,550/-.)

1. In this writ petition, the writ petitioner has challenged the impugned order passed by the Joint Commissioner (CT), the 2nd respondent herein. By the impugned order, the 2nd respondent has dismissed the applications filed for revision of order passed by the 3rd respondent dated 23.08.2010, wherein, the petitioner has been called upon to pay a sum of Rs.1,35,550/- under Section 72 of the Tamil Nadu Value Added Tax Act, 2006.

2. The petitioner claims to have purchased imported timbers numbering in 7 form New Patel Saw Mill, Shencottah, Tirunelveli District. The consignment was reported by delivered to Sri Swastik Saw Mill, Erode enroute from Shencottah to Coimbatore for the purpose of cutting and sawing.

3. It is the case of the petitioner that the consignment was delivered to Sri Swastik Saw Mill, Erode on 08.08.2010 as the said Sri Swastik Saw Mill had necessary sawing machines for cutting timbers/logs of bigger size. The Said Sri Swastik Saw Mill, Erode, however, could only cut and deliver 4 out of 7 logs to the petitioner at Coimbatore and wanted some more time to deliver the balance quantity from the remaining 3 logs later.

4. It is the case of the petitioner that the vehicle carrying the cut timbers were intercepted by the officer of the third respondent, Coimbatore on 21.08.2010 on the ground that the goods transport accompanied defective an therefore, there was contravention of 71(5) of the Act read with relevant rules and that thus the petitioner committed offence under Section 72(1)(a) of the said Act.

5. It is the case of the petitioner that the imported goods were sent to Sri Swastik Saw Mill, Erode for cutting and since there was a delay, 4 of the timbers were alone cut and sent to meet the requirements of the petitioner and that the balance were sent to the petitioner later. It is further submitted that the 3rd respondent had no jurisdiction to impose compounding/composition fees under Section 72 of the Tamil Nadu Value Added Tax Act. 2006.

6. The petitioner not only paid the tax demanded but also paid the compounding fee and thereafter, preferred a revision petition before the Joint Commissioner, the 2nd respondent under Section 54 of the Tamil Nadu Value Added Tax Act, 2006 read with 14(7) of the Tamil Nadu Value Added Tax Rules, 2007.

7. The revision petition filed by the petitioner was dismissed by the 2ndrespondent holding that the goods moved and the details in invoice No.0415 did not match. Under the above circumstances, the petitioner was liable to pay an amount equal to two times of tax as compounding fee as was fixed by the 3rd respondent Roving Squad Officer vide the impugned order before the 2nd respondent.

8. Though the writ petition is of the year 2011, the respondents had not filed their counter. However, on instructions, the learned Government Advocate appearing for the respondents submits that the impugned order is liable to be sustained as the petitioner has not clearly explained the transaction and authorities acting under the provisions of the Tamil Nadu Value Added Tax Act, 2006 have passed a fair order. It is further submitted that when the goods were detained, there was no proper documents to substantiate and correlate that the goods allegedly sold on 06.08.2010 vide invoice No.0415 by M/s.New Patel Saw Mill to petitioner did not match and therefore, the 3rd respondent was justified in not only detaining the consignment but also in demanding tax and imposing compounding/composition fee of Rs.1,35,550/-.

9. I have considered the arguments advanced on behalf of the petitioner and the respondents. I have also perused the documents filed by the petitioner.

10. The petitioner has filed two typed sets of papers; one at the time of filing the writ petition and on 24.11.2018. The petitioner has primarily placed reliance on the decision of the Tamil Nadu Taxation Special Tribunal dated 08.02.1999 made in O.P.No.1578 of 1998 – Colour Tex Ltd. Vs. Joint Commissioner (RP), Chepauk and another and submitted that the 3rdrespondent has no power to levy compounding fee under Section 72 of the Tamil Nadu Value Added Tax Act, 2006. It is further submitted that the said decision was rendered under Section 46(1)(a) of the Tamil Nadu General Sales Tax Act, 1959. The provisions being identical, the said decision was squarely applicable in the facts and circumstances of the case.

11. Though the petitioner claims that 7 logs were purchased by the petitioner on 06.08.2010 from M/s.New Patel Saw Mills, Shengottah, it is noticed that the petitioner has produced yet another commercial invoice dated 31.08.2010, wherein also, a transaction in respect of 7 logs has been shown for a total value of Rs.13,50,318/- (Rs.12,00,283/- + Rs.15,00,035/-). The petitioner has also enclosed the copy of another delivery Form JJ dated 03.09.2010 to show that the balance of 3 logs valuing Rs.6,30,000/0 approximately were being sent back to the petitioner as per invoice dated nil.

12. It is not clear how invoice dated 31.08.2010 can be relied in support of the purchase of 7 logs on 06.08.2010. The petitioner has also not stated these facts before the 2nd respondent. The petitioner had earlier purchased 7 logs from the said M/s.New Patel Saw Mill, Shengottah on 06.08.2010 and had purportedly delivered the same to Sri Swastik Saw Mill, Erode for cutting and sawing. However, a new invoice dated 31.08.2010 has been filed to substantiate the same transaction. This raises doubt. Two transactions cannot be one and the same. Further, the value of the goods declared in Form JJ dated 06.08.2010 is Rs.11,50,000/-,whereas the value of the 7 logs covered by invoice dated 31.08.2010 is Rs.13,50,318/- (Rs.12,00,283/- + Rs.15,00,035/-), though the quantity in both the invoices are identical i.e. 36.594 cbm. Since there was several disputed questions of facts, which were not placed before the 2nd respondent by the petitioner, I am of

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the view, a fair chance may be given to the petitioner to place the same before the 2nd respondent for the latter to pass an appropriate order in accordance with law after hearing the petitioner. 13. Accordingly, the impugned order is quashed. The petitioner may therefore file all documents and a detailed written submission before the 2ndrespondent. Such details may be filed within a period of 30 days of this order. The 2nd respondent shall pass appropriate orders on merits in accordance with law, through video conferencing, if the situations so warrant on account of continuance of Covid19 pandemic. . 14. This writ petition stands disposed of with the above observation. No costs.