IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 30178 of 2010(V)
1. VIJI THANKACHAN
... Petitioner
Vs
1. COMMERCIAL TAX INSPECTOR
... Respondent
For Petitioner :SRI.VIJAYAN. K.U.
For Respondent : No Appearance
The Hon'ble MR. Justice C.K.ABDUL REHIM
Dated :01/10/2010
O R D E R
C.K.ABDUL REHIM, J.
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W.P.(C).No.30178 of 2010
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Dated this the 1st day of October, 2010
J U D G M E N T
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Petitioner is aggrieved by detention of goods
purchased interstate on payment of CST at the rate of 2%.
According to the petitioner, the goods were purchased from
a dealer in Mumbai by virtue of Ext.P2 invoice, under C-
Form, on payment of concessional rate of tax. The
consignment was detained at the Commercial Tax Check
Post at Walayar by the 1st respondent on issuing Ext.P3
notice under Section 47(2) of the Kerala Value Added Tax
Act, 2003 (KVAT Act). The reason for detention mentioned
therein is that only a photocopy of the invoice was
accompanying the transport and no other valid documents
were available. Suspecting attempt in evasion of payment of
tax the petitioner was directed to furnish security.
2. According to learned counsel for the petitioner,
the transaction in question is purely an interstate purchase,
which will not attract levy of tax under the provisions of the
W.P.(C).30178/10-V -2-
KVAT Act. Relying on the decision in Baheej Agencies Vs. STO
(6 KTR 150 (Ker.)) it is contended that the documents
prescribed under the KVAT Act and the Rules need not
accompany with respect to a transport by way of interstate
movement and the documents prescribed under law of the
consignor’s state will be sufficient. Further contention is that,
eventhough the KVAT Act and the Rules thereunder insist for a
transporter copy of the invoice to be accompanied with the
consignment, there is no identical provision contained in the
local law with respect to the state of the consignor. He further
contends that the defect noted is only technical in nature, and
insistence for payment of cash deposit is highly unreasonable
and unjustifiable. Therefore the petitioner seeks direction for
release of the goods pending finalisation of the enquiry.
3. Learned Government Pleader, per contra, contended
that the movement of the goods within the barriers of the state,
if not accompanied by documents prescribed under the KVAT Act
and the Rules thereunder, need be treated as an illegal transport
and penalty is liable to be imposed. It is argued that the
authority is well justified in detaining the goods because the
suspicion raised with respect to evasion in payment of tax is
W.P.(C).30178/10-V -3-
reasonable. Since photocopy of the invoice alone was
accompanying the goods, there is every reason to suspect that
the petitioner might have clandestinely transported the goods on
the strength of the original of the invoice, bypassing the check
post. Therefore it is contended that the petitioner need be
compelled to furnish adequate security, is the contention.
4. I am not intending to consider the rival contentions or
to enter any findings on the issue raised. The detention need to
be followed by an enquiry to be conducted by the competent
authority. At this stage, while considering the question with
respect to release of goods, I am of the opinion that pending
finalisation of the enquiry the goods in question can be released
on the petitioner furnishing proper security. Taking note of the
fact that the petitioner is a registered dealer and also that the
transaction is an interstate purchase, I am inclined to allow the
goods to be released on the petitioner furnishing security bond,
without sureties.
5. The 1st respondent is therefore directed to release the
goods detained under Ext.P3 on the petitioner furnishing
security bond in the form prescribed under the KVAT Rules,
without sureties, for the value demanded in Ext.P3.
W.P.(C).30178/10-V -4-
6. The competent authority will finalise the enquiry at
the earliest possible, after affording an opportunity of hearing to
the petitioner, at any rate within a period of six weeks from the
date of release of the goods.
C.K.ABDUL REHIM, JUDGE.
okb