IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 30008 of 2007(V)
1. QUILON MERCHANT CHAMBER OF COMMERCE
... Petitioner
2. P. NARAYANA SWAMI,
Vs
1. STATE OF KERALA
... Respondent
2. THE COMMISSIONER OF COMMERCIAL TAXES
For Petitioner :SRI.R.SATISH KUMAR
For Respondent :GOVERNMENT PLEADER
The Hon'ble MR. Justice THOTTATHIL B.RADHAKRISHNAN
Dated :22/03/2010
O R D E R
THOTTATHIL B.RADHAKRISHNAN, J.
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W.P.(C).No.30008 of 2007-V
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Dated this the 22nd day of March, 2010.
Judgment
1.Second petitioner is the Vice President of the
first petitioner Quilon Merchant Chamber of
Commerce. They filed this writ petition
challenging clause 10 of Ext.P2 circular issued
by the Commissioner of Commercial Taxes under the
provisions of the KVAT Act. The impugned clause
provides that if the purchasing dealer is
untraceable at the given address, then action
shall be taken against the selling dealer under
Sections 67 and 73 of KVAT Act. The said clause
follows the earlier provisions which are intended
to identify the transit of goods to ensure that
there is no escape from the tax net.
2.The petitioners have a well founded apprehension
that the impugned clause 10 of Ext.P2 circular
could be misused even in bona fide cases and in
WPC30008/07 -: 2 :-
all cases, the selling dealer is likely to be put
to undue harassment. It appears that this plea of
the trading community has obtained the attention
of the Department and accordingly, Circular
No.46/07 has been issued modifying Ext.P2
circular clarifying that action shall be taken
against the selling dealer in terms of clause 10
of Ext.P2 circular only where fraud and collusion
between the selling dealer and the purchasing
dealer in the transaction is proved. Obviously,
therefore, the apprehension of the petitioners
stands answered by the Department in their
favour. This is recorded and it is ordered that
Ext.P2 will be operated only in terms of
clarifications contained in Circular No.46/07.
3.In so far as the other reliefs sought for in the
writ petition are concerned, the statute requires
all retail dealers in the State to be registered
under the KVAT Act within a time frame fixed and
that the registered retail dealers be issued with
electronic identity cards. The requirement to get
WPC30008/07 -: 3 :-
registered is a statutory requirement. To obtain
such registration being a mandate, the KVAT
authorities can only fix liability for non-
registration. The manner of obtaining compulsory
registration is by providing teeth in the form of
penalty against the non-registration of
compulsorily registrable dealerships. Issuance of
electronic identity cards is a matter which has
to be taken up in the most expeditious manner.
In so far as the request of the petitioners that
circulars under the KVAT Act are to be issued in
Malayalam language also is concerned, the
Commissioner will look into whether there is a
statute which makes mandate in that regard and if
so, will take necessary action to comply with
such statutory provision. The writ petition is
ordered accordingly.
THOTTATHIL B.RADHAKRISHNAN,
JUDGE.
Sha/2303