IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 28024 of 2009(W)
1. SHEFEER P.A,
... Petitioner
Vs
1. THE INTELLIGENCE INSPECTOR,
... Respondent
2. THE COMMERCIAL TAX OFFICER,
For Petitioner :SRI.P.N.DAMODARAN NAMBOODIRI
For Respondent : No Appearance
The Hon'ble MR. Justice C.K.ABDUL REHIM
Dated :07/10/2009
O R D E R
C.K.ABDUL REHIM,J.
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WP(C).NO. 28024 of 2009
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Dated this the 7th day of October , 2009
JUDGMENT
Petitioner has approached this court inter alia seeking
direction to release goods detained by the first respondent on
issuing Ext.P5 notice. According to the petitioner he is engaged
in the manufacture and export sale of “Guitar parts” made out of
‘Rosewood’, for which he has consigned Rosewood purchased
from a dealer in the State of Karnataka. Eventhough the goods
transported is a notified item for which payment of advance tax is
liable, petitioner was issued with Ext.P2 certificate by the
assessing authority concerned, evidencing excess credit tax
payment, and the transport was effected on the strength of that
certificate without paying advance tax. As per Ext.P4 circular
(Circular No.27/07) dealers like the petitioner was permitted to
effect transport without payment of advance tax on production of
certificate showing credit of excess tax payment. Therefore the
transport was purely legal and valid is the contention.
2. On a perusal of Ext.P5 notice it is evident that the
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detention was for the reason that the date of Ext.P2 certificate
was 19.9.2009, but the transport was effected after a period of
15 days. It is further stated that the credit available as certified
in Ext.P2 is Rs.79500/- whereas the consignment in question
requires payment of advance tax to the tune of Rs.87485/-. It is
also stated that from the description of the consignee it is only
discernible that the petitioner is a dealer whereas the benefit of
circular No.27/07 is available only industrial units. Further it is
pointed out that the check post authorities have not endorsed
extent of adjustment of advance tax with respect to the
consignment, and the transport was not accompanied with a
certificate having such endorsement duly authenticated from the
check post.
3. Learned counsel for the petitioner vehemently contended
that none of the grounds enumerated in Ext.P5 are legal or
tenable for detention of the goods. However the question
whether there was any attempt at evasion of tax is a matter
which is to be decided on finalisation of the adjudication. It is
not proper for this court to enter on merits of the rival contentions to
arrive at any finding in this stage. At the same time continued
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detention of the goods till finalisation of the adjudication is not
warranted. Hence I am of the opinion that the goods can be released
on the petitioner furnishing proper security.
4. In the result, the writ petition is disposed of directing the first
respondent to release the goods along with vehicle detained under
Ext.P5 notice, on the petitioner making payment of an amount
equivalent to 50% of the security deposit demanded under Ext.P5
towards advance tax, without prejudice to finalisation of the
adjudication proceedings and also on furnishing a security bond in the
form provided under the KVAT Rules without sureties, for the balance
50%.
5. It is made clear that payment of advance tax is directed without
prejudice to the competent authority in completing adjudication
proceedings and without prejudice to the imposition of penalty, if the
petitioner is ultimately found liable. The competent authority under
section 47 is directed to expedite the adjudication and to complete the
same as early as possible, at any rate, within a period of two months
from the date of release of the goods.
C.K.ABDUL REHIM,JUDGE
pmn/
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