JUDGMENT
K.K. Usha, J.
1. Advocate Sri. N. Muraleedharan Nair takes notice on behalf of respondent. This is an appeal from the interlocutory order passed by the learned single Judge in C.M.P.No. 29024 of 1995 in O.P.No. 16124 of 1995. The complaint of the appellant is that the learned Judge has erred in directing release the goods detained under exhibit P3 unconditionally pending decision of the original petition.
2. Appeal is at the instance of the Intelligence Inspector, Intelligence Squad No. IV, Agricultural Income-tax and Sales Tax, Palakkad, respondent in the original petition. Challenge in the original petition is against detention of 10 rolls of coaxial cables transported through South Eastern Roadways in Lorry No. KRH 7263. Exhibit P3 notice issued under the provisions of Section 29-A(2) of the Kerala General Sales Tax Act, 1963 is sought to be quashed. Along with the original petition the petitioner filed C.M.P.No. 29024 of 1995 seeking an interim relief to release the goods unconditionally.
3. On September 26, 1995 the appellant intercepted a lorry of M/s. South Eastern Roadways bearing registration No. KRH 7263 at mannathukavu near Palakkad carrying among other goods 10 rolls of coaxial cables. On perusing the records accompanying the transport it was seen that the consignment was covered by exhibit P1 delivery challan issued by M/s. Rankay Investment and Trading Company Ltd., New Delhi. The goods were consigned as stock transfer to their branch at Kochi. Exhibit P2 the lorry receipt accompanying the goods showed the name and address of the consignee as one Shri Sadiq Ali, Second Floor, 35/334 Sky Park Complex, Mamangalam. There was also a letter issued by the petitioner-company from New Delhi stating that the despatch is under management agreement with one Shri Sadiq AH and that the materials are the assets of M/s. Siti Cable Network Pvt. Limited. The goods were purchased by the petitioner at New Delhi locally by paying full sales tax applicable. There was another document accompanying the transport, namely, bill of entry evidencing import of 120521 ft. of coaxial cable from Washington by the petitioner-company at New Delhi. There is a reference regarding the above bill of entry in exhibit P1 chalan. On going through the records accompanying the transport the appellant entertained suspicion regarding the bona fides of the transport. The bill of entry as well as exhibit P1 chalan showed that the goods are imported and that the letter of the petitioner referred the goods are locally purchased. Exhibit P1 evidences that the goods are transported on stock transfer basis, whereas the letter showed that the goods belonged to an entirely different company, M/s. Siti Cable Network Private Limited. The transaction was found involving inter-State movement of goods. If goods are to be transported on stock transfer basis sales tax registration under the provisions of Section 13 of the Kerala General Sales Tax Act, 1963, was essential and also the registration under the Central Sales Tax Act, 1956. Exhibit P2 lorry receipt showed the consignee’s address not as the petitioner’s branch at Kochi nor as M/s. Siti Cable Network Private Ltd., but as Shri Sadiq All. It was under these circumstances exhibit P3 notice was issued demanding security to the tune of Rs. 3,37,166 for release of goods, being double the amount of tax sought to be evaded. Pursuant to the issue of notice annexure-C letter was given by M/s. Siti Cable Network Private Ltd. representing to the effect that the goods under detention belonged to them and the same was despatched from their New Delhi office to Kochi for the purpose of their own use. The above statement was contradictory to the documents following the goods, contended the appellant.
4. According to the respondent, the petitioner as well as Siti Cable Net Work Private Ltd., are one and the same and the transport did not involve any sale as the goods were being brought to Kerala for their own use. Going by the documents which were already before the authorities, prima facie we find that there was justification on the part of the authorities to issue exhibit P3 notice, but only after a proper enquiry the statutory authority can take a final decision in the matter. But in the facts and circumstances of the case, we are of the view that if the petitioner is allowed to get the goods released without any security, it may adversely affect the interest of Revenue. Apparently this aspect was not seen considered by the learned single Judge while granting interim relief. The order under appeal is, therefore, set aside.
5. Sri. Karunakaran Nambiar, learned Additional Advocate-General (Taxes), submitted that if the goods transported are to come under item No. 49 in the First Schedule to the Kerala General Sales Tax Act and after the amendment under Act 5 of 1995 tax leviable will be at the rate of 10 per cent. But if the goods are to come under item No. 120, then the tax will be at the rate of 20 per cent. According to the Revenue, the goods transported would come under item No. 120. Learned counsel appearing on behalf of the respondent
herein submits that the goods cannot be an article coming under any of the items. This is a matter which has to be decided by the statutory authority for the first instance after giving proper opportunity to the respondent herein. But, in the meanwhile, there will be an interim direction to the appellant herein to release the goods covered by exhibit P3 to respondent herein on its executing a bank guarantee to the extent of 50 per cent of the amount directed to be given as security under exhibit P3.
Appeal stands allowed as above.