Madras HC: 1 Lakh Penalty as Vehicle Carrying Diesel Without Invoices & Transport Records

The movement of the seized vehicle carrying diesel was done without a proper invoice and transport document, which was against the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act), and the Madras High Court ordered the payment of Rupees one lakh as security penalty.

The applicant, M/s.Kumutham Agencies has contended the impugned proceedings of the State Tax Officer-II, (Intelligence), to dismiss that and direct the State Tax Officer (ST), to discharge the detention goods as prohibited and contrary to the provisions of the Tamil Nadu Value Added Tax Act, 2006.

The petitioner’s specific claim is that the aforementioned truck was transporting extremely flammable diesel. The driver chose an alternate route because the road between Cuddalore and Seerkazhi is being repaired. While the driver was getting dinner, the Roving Squad arrived and impounded the car.

The petitioner’s lawyer claimed that the petitioner’s explanation had not been accepted since the vehicle had chosen a different path to avoid a risk to lessen the likelihood that it would catch fire while in movement.

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On the other hand, the Government Advocate for the respondents argued that the contested order, which ordered the items to be held and imposed a fine equal to double the amount of duty, was well-founded and did not call for interference. Aside from that, it is argued that the petitioner has another remedy before the Commissioner and hence should be relegated to figure out the remedy before the Appellate Commissioner.

However, the petitioner’s lawyer would argue that the petitioner is ready to make the payment. The petitioner’s lawyer would argue that, in terms of the punishment, the petitioner may be forced to negotiate the solution with the Appellate Commissioner.

The fact remains that improper invoices and transport documents were used for the transit of diesel. In any case, the Tamil Nadu Value Added Tax Act, 2006 required the petitioner to pay the tax on the items, a Single Judge Bench of C Saravanan witnessed.

Acknowledging that the product-carrying vehicle is diesel which would prone to inflammable, the court ordered the provisional release of the vehicle as per the applicant filing the disputed tax that has been arrived in the impugned order including a sum of Rs 1,00,000 for the security penalty levy within 7 days from the receipt date of a copy of this order.