IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 31167 of 2010(U)
1. M/S.KARNAKI IMPEX,SIANA BUILDING,
... Petitioner
Vs
1. THE INTELLIGENCE INSPECTOR,SQUAD NO.IV,
... Respondent
For Petitioner :SRI.K.J.ABRAHAM
For Respondent : No Appearance
The Hon'ble MR. Justice C.K.ABDUL REHIM
Dated :12/10/2010
O R D E R
C.K.ABDUL REHIM, J
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W.P(C) No. 31167 of 2010-U
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Dated this the 12th day of October, 2010.
J U D G M E N T
Timber logs, Timber swan sizes, and Panel Doors Hardwood
transported from Cochin Port to the business place of the petitioner
at Karunagappally was intercepted by the respondent, on issuing
Ext.P5 notice under Section 47(2) of the Kerala Value Added Tax Act
(KVAT Act). According to the petitioner the goods in question were
imported from Gujarat through coastal port at Cochin and it was
transported on the strength of Departmental Delivery Note, Form
8FA Declaration, Invoices, Bill of Entry, and Certificate evidencing
payment of Advance Tax. The goods were detained for the reason
that, on verification it was revealed that, neither the consignor nor
the consignee had declared the species of timber and it was also
revealed that the timber transported are imported “Mirandi” timber
logs. The respondent, on the basis of enquiry conducted, realised
that the market value of the goods is far above than the value
declared and suspecting wilful undervaluation with an intention of
evading tax, the goods were detained and security deposit was
W.P(C) No. 31167 of 2010-U 2
demanded to the tune of double the amount of tax on the
differential value calculated.
2. According to learned counsel for the petitioner, there
was no undervaluation as alleged and the value as revealed in the
Bill of Entry was truly reflected in the documents which accompanied
the transport. Learned Government Pleader on the other hand
contended that, there was a misclassification of the goods and the
gross variation in value when compared with the market value, gives
rise to a reasonable suspicion regarding attempt in evasion of
payment of tax.
3. I am of the considered opinion that the issue need not be
decided in this writ petition, as the detention will be followed by an
enquiry contemplated under Section 47. But pending finalisation of
such enquiry, the goods can be released on the petitioner furnishing
proper security.
4. Under the above circumstances, the writ petition is
disposed of directing the respondent to release the goods along
with the vehicle, which was detained under Ext.P5 notice, on the
petitioner furnishing Bank Guarantee for the 50% amount demanded
therein and also on furnishing security bond in the form prescribed
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under the KVAT Rules, without sureties, for the balance amount.
5. The competent authority is directed to finalise the
enquiry after affording an opportunity of hearing to the petitioner,
within a period of six weeks from the date of release of the goods.
C.K.ABDUL REHIM
JUDGE
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