IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 19474 of 2010(H)
1. WIPRO GE HEALTHCARE PVT.LTD.,
... Petitioner
Vs
1. THE COMMERCIAL TAX INSPECTOR,
... Respondent
For Petitioner :SRI.A.KUMAR
For Respondent :SRI.JAIRAM.V.MENON
The Hon'ble MR. Justice P.R.RAMACHANDRA MENON
Dated :07/07/2010
O R D E R
P.R. RAMACHANDRA MENON, J.
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W.P.(C) No. 19474 OF 2010
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Dated this the 7th July , 2010
J U D G M E N T
The petitioner, who is engaged in the manufacture and sale
of various diagnostic systems and allied equipments, having
registered office at Bangalore and other regional offices in other
places including Pondicherry as well as in Kerala as borne by
Exts. P1/P1(a) certificates of registration, on receipt of a
purchase order from the Addl. Second respondent (who is not a
dealer), transported a scanning machine to be supplied at the
doors of the Addl. Second respondent on the strength of Ext. P2
invoice. When it was being taken in the vehicle bearing No. TN-
20AK/2499, it was intercepted on 15.06.2010 issuing Ext. P6
notice under Section 47(2) of the KVAT Act, doubting evasion of
tax and demanding security deposit to the extent specified
therein.
2. On explaining the position as to the true state of affairs,
the respondents chose to issue a revised notice as borne by Ext.
P7, still maintaining the stand that the petitioner had to satisfy
the security deposit, in view of the alleged discrepancy. Even
W.P.(C) No. 19474 OF 2010
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though Exts. P8, P8(a) and P9 representations/explanations
were filed, the same did not yield any positive result, which made
the petitioner to approach this Court by filing this Writ Petition
for immediate interference .
3. The insinuating circumstances noted against
transportation of materials are given below:
“Wipro GE Healthcare, Bangalore sold a CT
Scanner and accessories to Travancore MRI
scans laboratory Pathanamthitta. As per the
invoice the consignor collected CST @ 2% and
attached the certificate of ownership, for the
transportation. The above consignor has
availed concessional rate against C form. A
registered dealer with CST registration can
provide C forms. But there is no evidence to
prove that, whether the consignee is a
registered dealer CST dealer or not. Hence the
evasion of tad suspected. SD demanded.”
The course and explanation offered from the part of the parties
concerned vide Exts.P8, P8(a) and P9 are given below:
“A. The invoice has been raised from Wipro GE
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Healthcare, Pondicherry and goods moved from
Wipro GE Healthcare, Puducherry.
B. TIN number mentioned in the invoice is the
TIN number of Wipro GE Healthcare,
Puducherry under Puducherry VAT Act. Copy of
the registration certificate enclosed.
C. Rate of tax for Medical equipments in
Puducherry has been reduced from 4% to 2%.
Hence CST rate without C form is also 2%.
Copy of the notification enclosed.
D. The Bangalore address mentioned in the
invoice only shows the registered office of the
company, invoice specifically states the goods
are despatched from Puducherry warehouse.
E. The purchase of the equipment is for own
use at its Diagnostic centre at Pathanamthitta.
Form 16 already accompanied with the
equipment. "
4. Heard the learned Government Pleader as well
5. The learned Counsel appearing for the petitioner submits
that the entire proceedings have been issued, causing detention
of the vehicle as well as the goods by the respondents totally on
a misconception as to the factual and legal position. It is
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contended that the respondents are under the impression that,
since the tax collected is only at the rate of 2%, the consignee
has purchased the same availing the ‘concessional rate of tax’.
Since the consignee is not a registered dealer, the declaration
filed in Form 16 stating that it is for ‘own use’ does not tally with
the contents of other documents and hence evasion of tax is
doubted. It is also stated that by virtue of having the registered
office at Bangalore, as given at the top of Ext. P2 invoice, the
respondents had to doubt the evasion of tax, the goods having
been despatched from Puducherry.
6. With reference to the materials on record, including the
additional documents produced and marked as Ext. P10 to P15
along with I.A.No. 9223 of 2010, the learned Counsel for the
petitioner submits that the rate of tax sought to be realised
from the consignee at 2% is not by way of ‘concessional rate of
tax’ but the ‘original rate of tax’ as payable in the State of
Pondicherry, the same having been reduced from 4% to 2% by
virtue of relevant notification issued in this regard. The
correctness of the said submission is however sought to be
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5
rebutted by the learned Government Pleader stating that this is
a fact which requires to be considered and established in the
course of adjudication.
7. With regard to the discrepancy as to the place of
registration and the place of despatch, the learned Counsel for
the petitioner submits that the actual position is very much
discernible from Ext. P2 invoice itself; wherein the registered
office is given at the top, ie., ‘Bangalore’, while the place of
despatch is clearly given at the bottom as from ‘Puducherry’. The
learned Counsel further submits that such a course was being
pursued in the matter of preparation and issuance of invoice, by
virtue of the centralised pattern of invoice available in the
Southern States of India, though such a course has been
changed in Kerala, pursuant to which, the petitioner has also
now changed the pattern . It is also brought to the notice of this
Court that the actual ‘TIN’ is clearly given in Ext. P2 and that
similar course is very much discernible from other documents
produced and marked as Exts. P10 to P15 along with
I.A.No.9223 of 2010. Referring to the contents of Ext. P15, the
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learned Counsel further submits that the tax realised from the
petitioner is only at the rate of 2%, which by itself shows that it
is the actual rate of tax available in the concerned State and
not the concessional rate of tax. The learned Counsel explains
that Ext. P4 delivery note has been issued from ‘Puducherry’
and it is in the particular form as prevailing in the State of
Pondicherry, which includes the instance of sale as well, as
obvious therefrom. The factum of sale by the petitioner/consignor
and the factum of ‘own use’ to be made by the consignee, (who
is not a registered dealer and who placed the order for ‘own
use’) are very much revealed from the materials on record,
submits the learned Counsel.
8. Considering the facts and circumstances, this Court finds
that there is considerable force in the submissions made from the
part of the petitioner. However, as submitted by the learned
Government Pleader, this is a matter which requires to be
finalised in the course of adjudication proceedings, in view of
issuance of notice under Section 47(2) and the turn of events
including the actual rate of tax. But, for that reason, this Court
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does not find it necessary to detain the goods as well as the
vehicle any further and the same shall be released to the
petitioner forthwith, on condition that the petitioner executes a
‘simple bond’ for the amount demanded as security deposit in
Ext. P7 notice. This will be without prejudice to the rights of the
respondents to pursue the adjudication proceedings, which
exercise shall be finalised in accordance with law as
expeditiously as possible, at any rate, within a period of two
months from the date of receipt of a copy of the judgment.
The Writ Petition is disposed of.
P.R. RAMACHANDRA MENON,
JUDGE.
lk