Commercial Tax Officer VS Madhu M.B

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The petitioner is challenging the detention of their goods by the Intelligence Inspector of Squad III, Department of Commercial Taxes, as outlined in Ext.P5. The petitioner argues that the goods in question were legitimately purchased from a manufacturer, with all necessary taxes paid, including Central and State Goods and Services Tax (GST). This compliance is evidenced by the invoice presented as Ext.P7. Following the purchase, the petitioner intended to sell the goods across state lines, and the transportation of the goods was accompanied by an invoice labeled as Ext.P1, which further indicated that the petitioner had paid the Integrated Goods and Services Tax (IGST) for the interstate transaction.

Despite this, the petitioner’s goods were detained by the authorities, and a notice, Ext.P5, was issued to them, causing significant concern and grievance. The petitioner asserts that there has been full compliance with the tax laws, both at the state and central levels, and therefore, the detention of the goods is unwarranted and unjustified.

On the other hand, the learned Government Pleader, representing the authorities, supports the actions taken in Ext.P5. The Pleader argues that the detention and subsequent notice were based on specific grounds raised in the said document. The examination of these grounds by the authorities led to the decision to detain the goods, suggesting that there might be discrepancies or issues that warranted such an action. The exact nature of these grounds, however, would be central to understanding the legality and justification of the detention, which is under scrutiny in this case.

In summary, this case revolves around the petitioner’s challenge to the detention of goods that were allegedly purchased and transported in full compliance with tax regulations. The petitioner’s position is that the detention is baseless, while the Government Pleader defends the detention, implying that there were valid reasons for the authorities’ actions as outlined in Ext.P5. The resolution of this dispute will hinge on the interpretation of the evidence presented, particularly the invoices and the reasons stated in the detention notice.

In this case, the petitioner challenges the detention of goods by the Intelligence Inspector, Squad III, Department of Commercial Taxes, as evidenced by Ext.P5. The petitioner’s main grievance revolves around the fact that their goods were detained despite having followed the proper procedures for tax payment and documentation. The petitioner asserts that the goods were purchased from the manufacturer with the necessary Central and State Goods and Services Taxes paid, as confirmed by the invoice provided at Ext.P7. Furthermore, when the petitioner transported these goods for interstate sale, the transport was accompanied by Ext.P1 invoice, which indicated the payment of Integrated Goods and Services Tax (IGST). Despite these precautions, the petitioner’s goods were detained, and Ext.P5 notice was issued, prompting the petitioner to seek legal recourse.

The learned Government Pleader presented the state’s defense based on the grounds specified in Ext.P5. According to the Pleader, during an inspection of the goods, it was discovered that the goods available for transport did not match the description provided in the accompanying documents. Specifically, the Pleader noted that while the invoice indicated the transportation of 12mm and 18mm commercial plywood (with quantities of 1005.28 Sqm and 1255.83 Sqm, respectively), the actual goods found during inspection included 10mm plywood (1020.07 Sqm), 12mm plywood (1440.89 Sqm), and 15mm plywood (96.18 Sqm). Importantly, there was no 18mm commercial plywood found in the transport. This discrepancy between the goods listed in the invoice and the goods found during inspection led the authorities to suspect that excess goods were being transported interstate, which had not been properly documented or taxed. Consequently, Ext.P5 was issued to detain the goods.

The court also observed that since the invoice did cover the 12mm plywood (1005.28 Sqm), the excess quantity found during inspection, along with the quantities of 10mm and 15mm plywood, would need to be calculated for assessing the value of goods that may have been suppressed. This assessment would be necessary to determine if any attempt had been made to evade taxes or to transport goods in a manner inconsistent with the tax and regulatory requirements.

In light of these findings, the Intelligence Inspector’s actions, as recorded in Ext.P5, were based on the discrepancies between the documents and the physical goods found during the inspection. The case highlights the importance of ensuring that goods being transported, especially across state lines, are accurately documented and that all taxes have been properly accounted for. The petitioner’s claim that the detention was unjustified is challenged by the state’s evidence of inconsistencies in the documentation and the actual goods being transported. The court would need to consider these factors in determining whether the petitioner’s grievance has merit or whether the state’s actions were justified under the law.

The petitioner in this case challenged the detention of goods by the Intelligence Inspector, Squad III, Department of Commercial Taxes, as outlined in Ext.P5. The petitioner argued that the goods in question were lawfully purchased from the manufacturer with all necessary taxes paid, including Central and State Goods and Services Tax, which was evidenced by the invoice marked as Ext.P7. The goods were being sold interstate, and the transportation was accompanied by an invoice, Ext.P1, which also indicated the payment of Integrated Goods and Services Tax (IGST). Despite this, the petitioner’s goods were detained, and a notice (Ext.P5) was issued.

The Government Pleader, representing the state, argued that during the inspection of the goods, it was discovered that there was a discrepancy between the goods being transported and those listed on the accompanying invoice. Specifically, the invoice indicated that 12mm commercial plywood of 1005.28 square meters and 18mm plywoods of 1255.83 square meters were being transported. However, the physical inspection revealed the presence of 1020.07 square meters of 10mm plywood, 1440.89 square meters of 12mm plywood, and 96.18 square meters of 15mm plywood. This discrepancy indicated that there was no correlation between the goods listed in the invoice and the actual goods being transported, which justified the issuance of Ext.P5.

The court recognized that a portion of the goods, specifically the 12mm plywood of 1005.28 square meters, was indeed covered by the invoice. However, the excess goods found during the inspection, as well as the unlisted 10mm and 15mm plywood, were not covered by the invoice. Therefore, the court directed the Intelligence Inspector to make a fresh assessment by recalculating the value of the excess goods found during the inspection. The recalculated value would then be used to determine the Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) payable, along with any applicable penalties.

The court further ordered that upon payment of 50% of the recalculated demand, along with the execution of a simple bond for the balance amount, the detained goods should be released to the petitioner. The recalculation and subsequent actions were to be completed within two weeks from the date of receipt of a certified copy of the judgment.

Finally, the writ petition was disposed of without any order as to costs, meaning that each party would bear its own legal expenses.

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