ORDER
K. Raviraja Pandian, J.
1. The above writ petition is filed for issuance of certiorarified mandamus to call for the records of the respondents 1 to 4 pending with the order of the 1st respondent dated 19.11.2003 passed in O.P.917 of 2003 confirming the order of the second respondent Joint Commissioner (C.T) Chennai No. RPJJ1/116 dated 6.6.2003 and quash the same and consequently direct the respondent in particular the 4th respondent to refund the amount of Advance Sales Tax of Rs. 9,16,630 and compounding fee of Rs. 10,000 with 18% interest.
2. In this writ petition, the order of the Tamil Nadu Taxation Special Tribunal dated 19.11.2003 made in O.P. No. 917 of 2003 confirming the order of the lower authorities imposing advance sales tax of Rs. 9.16,630 and compounding fee of Rs. 10,000 is put in issue.
3. The petitioner is a trader in electrical goods at Delhi and registered with the Sales Tax Authorities in respect of Local Sales Tax Act and Central Sales Tax Act. The petitioner imported 15336 pieces of emergency lamps from M/s. Master Electronics Industries Ltd., Hongkong and on arrival of the goods at Chennai Port, the petitioner warehoused the goods at Binny container freight station, Chennai which is notified customs area. Pending clearance by the customs authority, on 13.1.2003, the Assistant Commissioner of Sales Tax Enforcement Wing, Chennai-6 issued detention order under Section 42(3) and read with 42(8) of the TNGST Act on the ground that the address of the importer and that of the ultimate consignee mentioned in the document differs and there were certain differences in the quantity of the goods. The explanation offered by the petitioner did not yield any result. Ultimately, the 4th respondent Deputy Commercial Tax Officer issued notice calling upon the petitioner as to why the tax should not be levied and in lieu of prosecution compounding fee should not be imposed. The petitioner by letter dated 5.2.2003 through their counsel, explained the deficiency pointed out, which was followed by another reply dated 20.2.2003. However, the 4th respondent by his order dated 28.2.2003 imposed the advance tax of Rs. 9,16,030 and levied compounding fee being twice the lax amount levied. That order was taken on revision to the third respondent Deputy Commissioner, Commercial Taxes who by his order dated 17.5.2003 dismissed the revision. The petitioner carried that order on further revision to the Joint Commissioner, the second respondent. The Joint Commissioner though accepted the reasoning given for change in the name and address of the consignee and also as to the quantity of the goods imported rather confirmed the levy of advance tax, however reduced the compounding fee to Rs. 10,000. The petitioner carried that order to the first respondent Special Tribunal, which by his order dated 19.11.2003 dismissed the O.P. Hence the writ petition.
4. Learned Counsel for the petitioner contended that there is absolutely no reason whatsoever for the authorities under the Act as well as the Tribunal to come to the conclusion that there was evasion of tax on the part of the petition, which warranted imposition of advance tax and in lieu of prosecution compounding fee. The goods have not even been cleared by the customs authority. The duties of customs were yet to be assessed and the goods were within the control of the customs authority. In such circumstances, there was no taxable event arose in this case so as to enable the respondent to come to the conclusion that there was evasion of tax or on attempt to evade tax.
5. On the other hand, learned Government Pleader appearing for the respondents argued for sustaining the order.
6. We heard the arguments of the learned counsel on either side and persued the materials on record.
7. As seen from the detention order dated 13.1.2003, the goods were detained for reasons that the address of the importer and ultimate consignee mentioned in the document differs. There was nothing to indicate as to whether the respondent was having any material to come to the conclusion that there was sale for which tax has not been paid. It is also an undisputed fact that the goods were in bonded warehouse and not been cleared on payment of customs duty. So the goods cannot be regarded as entered into the territory of Tamil Nadu and joined with the general mass. When the goods were imported into India even after the goods were unloaded from the ship and even after the goods are assessed to customs duty subsequent to the filing of bill of entry the goods cannot be regarded as having crossed the customs barrier until the duty is paid and the goods are brought out of the limits of customs station. Till such time the customs duty payable on the goods is not paid, the amount of duty payable being determined with reference to the rate at which the duty was levied as on the date of the removal of the goods from the warehouse, the goods cannot be regarded as having crossed the customs barrier, (see State Trading Corporation of India Limited v. State of Tamil Nadu,
8. Section 41-A of the TNGST Act empowers the appropriate authority to enter into and search such office, shop, godown, vessel, or other place of business or building or place to examine the goods and inspect all the records relating to such goods.
9. Section 42 provides for establishment of check-post or barrier and empowers the check-post officer to examine the contents in the goods vehicle or boat and inspect all the records relating to the goods carried and on such inspection, the check-post officer shall satisfy as to whether the tax if any payable for the goods has been paid or the sale of the goods brought in the carrier has been properly accounted for the purpose of payment of tax under the TNGST Act, if not, direct the person in charge of the vehicle to pay the tax or direct the security to be furnished.
10. Section 36 in lieu of prosecution empowers the authority to compound the offence by levying fine maximum of two times the tax payable on the sale of goods.
11. None of these contingencies arose in this case. On facts also, the ultimate fact finding authority viz., the Joint Commissioner has recorded a finding which reads as follows:
“For these two defects, the learned Authorised representative filed documents to show that the name of Meenakshi Impex, Jaipur was changed to Mahalakshmi Trading House, New Delhi on 2.1.2003, while the detention notice was issued on 13.1.2003. Therefore, the claim of the assessee that the foreign seller has changed the name due to various reason and the shipping records would support his contention and it is verified and found correct.
12. In respect of the other discrepancy, the Joint Commissioner has recorded a finding as follows:
“Similarly for the actual quantity of the goods imported it is mentioned as 1278 in each container in their letter dated 2.1.2003 and not 2000 as mentioned earlier. The original records were verified and found acceptable.
13. On facts also the respondents have not made out any case for imposing advance tax on the ground of evasion of tax and for levying compounding fee. Hence for the foregoing reasons, we are of the view that the petitioner has to succeed in this case. Accordingly, the writ petition is allowed and the impugned orders are set aside. No costs. Consequently, the connected W.P.M.P. is closed.