IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 34258 of 2010(F)
1. M/S.SPML INFRA LTD.(FORMERLY KNOWN AS
... Petitioner
Vs
1. THE STATE OF KERALA REPRESENTED BY
... Respondent
2. COMMERCIAL TAX OFFICER(W.C)O/O THE
3. COMMERCIAL TAX INSPECTOR,
For Petitioner :SMT.K.LATHA
For Respondent : No Appearance
The Hon'ble MR. Justice C.K.ABDUL REHIM
Dated :15/11/2010
O R D E R
C.K.ABDUL REHIM, J.
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W.P.(C).No.34258 of 2010
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Dated this the 15th day of November, 2010
J U D G M E N T
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Petitioner is aggrieved by detention of the
transport of goods, effected on the basis of interstate
purchase. The petitioner is a works contractor
executing works under the project of JBIC for the Kerala
Water Authority. The goods, “Beam and accessories”
(Manual Hoist with Geared Trolley on monorail Beam
with accessories) was purchased by the petitioner from
a dealer at Bangalore on the strength of Ext.P1 invoice
on payment of Central Sales Tax Act, at the
concessional rate of 2%. The transport was
accompanied by the invoice, copy of which is produced
as Ext.P1. The 3rd respondent had intercepted the
consignment on issuing Ext.P2 notice under Section 47
(2) of the Kerala Value Added Tax Act, 2003 (KVAT Act)
Act, mentioning the reason that the petitioner is not
W.P.(C).34258/10-F -2-
authorised to purchase the item under concessional rate, as
evidenced from the KVATIS. Hence, suspecting evasion in
payment of tax, security deposit was demanded.
2. Heard, learned Government Pleader appearing on
behalf of the respondents. It is submitted that the
petitioner was not authorised to purchase such an item on
payment of the concessional rate of CST, since the
registration granted does not authorise to deal with any
such item. Therefore the detention was justified and the
insistence for security deposit was reasonable, is the
submission.
3. Learned counsel for the petitioner, on the other
hand, pointed out that the petitioner is a registered works
contractor and the goods in question is intended for
execution of the work. It is further stated that the Water
Authority is deducting TDS out of contract Bill and at any
rate there could not be any attempt in evasion of payment of
tax due under the KVAT Act.
4. Question whether there was any attempt in
W.P.(C).34258/10-F -3-
evasion of payment of tax is a matter to be decided by a
competent authority on finalisation of enquiry. I am of the
view that, considering the fact that the petitioner is a
registered works contractor, the goods can be released
subject to rights of respondents 2 and 3 to request the
Water Authority to detain the amount of security deposit out
of the final contract Bill, till finalisation of the enquiry.
5. In the result the writ petition is disposed of
directing the 3rd respondent to release the goods along with
the vehicle detained under Ext.P2 notice subject to the
petitioner furnishing Security Bond in the form prescribed
under the KVAT Rules, without sureties, for the value of
security deposit demanded therein.
6. It is made clear that the respondent will be at
liberty to request the competent officer under the Kerala
Water Authority to retain the amount to the extent of
security deposit demanded under Ext.P2, from the payment
out of final contract Bill due to the petitioner, pending
disposal of the enquiry proceedings.
W.P.(C).34258/10-F -4-
7. The competent authority under Section 47 of the
KVAT Act is directed to 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