IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 29949 of 2010(P)
1. MESSRS.BASF POLYURETHANES INDIA LTD.,
... Petitioner
2. RANJITH.K.K., PROPRIETOR
Vs
1. THE INTELLIGENCE INSPECTOR
... Respondent
2. THE COMMERCIAL TAX OFFICER,
For Petitioner :SRI.A.KUMAR
For Respondent :GOVERNMENT PLEADER
The Hon'ble MR. Justice C.K.ABDUL REHIM
Dated :06/10/2010
O R D E R
C.K.ABDUL REHIM, J.
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W.P.(C).No.29949 of 2010
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Dated this the 6th day of October, 2010
J U D G M E N T
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Proceedings under Section 47(2) of the Kerala
Value Added Tax Act, 2003 (KVAT Act), initiated pursuant to
Ext.P10 notice, is under challenge in this writ petition. The
second petitioner is the consignment sale agent of the first
petitioner. The goods in question are stated to be chemicals
imported from the Italy, at the Sea Port at Cochin.
According to the petitioner, the goods were transported to
the premises of the 2nd petitioner on the strength of valid
documents as required under Section 46(3) of the KVAT Act,
and the movement of the goods was on consignment basis to
the agent of the first petitioner.
2. The reason for detention mentioned in Ext.P10
notice is that the transfer of the goods can only be treated as
a sale made by the 1st petitioner who is not a registered
dealer within the state.
3. Contention of the petitioner is that the aspect as
to whether an enquiry can be conducted under Section 47 of
the KVAT Act in order to decide as to whether the
transaction was a local sale or interstate sale, is totally
W.P.(C).29949/10- -2-
beyond the powers contemplated under Section 47. Petitioner
relies on a Division Bench decision of this court in
S.T.Rev.No.119/2006 dt.27.8.2008 in support of this contention.
It is held in that decision that, the enquiry officer himself has no
power to act as though it is an assessing authority in order to
look into the question whether the transaction is a consignment
sale or interstate sale. While doing so, the enquiry officer will be
acting without jurisdiction and without authority of law. The
Sales Tax Officer alone is expected to look into the matter as to
whether the transaction is mere consignment sale or interstate
sale, is the dictum laid therein.
4. Learned Government Pleader on the other hand
contended that the alleged importer of the goods is not a
registered dealer within the state and the transaction in question
was not an interstate movement which is having characteristics
of a consignment transfer. Further, no conclusive proof was
produced to the effect that the 2nd petitioner is a consignment
agent. Under such circumstances the suspicion regarding sale
within the state can only be reasonable and the matter can be
decided only on finalisation of enquiry contemplated under
Section 47, is the argument. It is also contended that, since the
W.P.(C).29949/10- -3-
1st petitioner is not a registered dealer, payment of security
deposit need be insisted.
5. Having considered the rival contentions, I am of the
opinion that the matter need not be decided in this writ petition
since an elaborate enquiry need be followed pursuant to Ext.P10.
I am of the opinion that pending finalisation of the enquiry the
goods can be released on proper security.
6. Under the above circumstances respondents are
directed to release the goods along with vehicle detained under
Ext.P10 notice, on either of the petitioners furnishing Bank
Guarantee for 50% of the security deposit demanded under
Ext.P10 and on both the petitioners together furnishing security
bond in the form prescribed under the KVAT Rules, without
sureties for the balance 50%.
7. The competent authority will finalise the enquiry at
the earliest, at any rate within a period of two months from the
date of release of the goods, after affording an opportunity of
hearing to the petitioner.
C.K.ABDUL REHIM, JUDGE.
okb