Emmanuel Sarees (Mis.) vs State of Kerala

Thottathil B. Radhakrishnan, J.—Three consignments of ready made garments were intercepted by the Intelligence Wing in the Thrissur Railway Station. Those consignments were released to one who produced the consignment note which disclosed the identity of the consignor and the revision petitioner M/s. Emmanuel Sarees as the consignee. Thereafter, notice was issued to the revision petitioner in connection with the enquiry for imposition of penalty. Revision petitioner did not respond to that notice. No objections were filed. No request was made for any further opportunity. Nor was any sort of participation made in the enquiry. The Enquiry Officer concluded the proceedings. Penalty order was issued. The first appeal and the second appeal filed by the revision petitioner before the statutory authorities were rejected. Hence, this revision u/s 63 of the KVAT Act. We have heard the learned counsel for the revision petitioner quite in extenso. It is specifically pointed out and argued that there was no opportunity to challenge the veracity of the findings on facts and that the person to whom the goods were released, viz., one Mr. Dasan, had no connection whatsoever with the revision petitioner Emmanuel Sarees. It is also pointed out that the materials could not have been relied on by the authorities to fasten the liability as has been done.

We see that the Appellate Authority and the Second Appellate Authority have decided the case on the basis of the materials on record and relied on by the Enquiry Officer. We do not find any ground of appeal in the memorandum of first appeal or the memorandum of second appeal seeking any further opportunity to cross-examine the aforesaid Dasan or to place any further material or for further opportunity of hearing or participation in the enquiry proceedings. Insofar as a revision u/s 63 of the KVAT Act is concerned, the jurisdiction stands regulated, limited and controlled by the statutory boundaries drawn within sub-section (1) of that Section. That revisional power does not extend to visit the decisions of the subordinate authorities except on grounds mentioned therein. It does not provide a full-fledged appeal. A question of law ought to have been left undecided by the second appellate authority or it should be a case where a question of law has been erroneously decided by that authority. See for support, Commissioner of Trade Tax, U.P. Vs. J.U. Pesticides and Chemical P. Ltd,

As already noted, plea of the revision petitioner is as to whether the consignment note could be connected to its business and whether the revision petitioner is to be treated as the consignee. The name of the revision petitioner is shown as that of the consignee in the materials available with the department. Then, it is a clear question of fact, as to whether that consignment note could be connected to the activities of the revision petitioner. It was for the revision petitioner to disprove the primary conclusions available on the materials with the Enquiry Officer. The revision petitioner, admittedly, had received notice from the Enquiry Officer. That was not responded to. As already noted, no ground of appeal was raised, either before the First Appellate Authority, or before the Second Appellate Authority, as to any desire or requirement of the revision petitioner for further opportunity by way of remand, either to cross-examine the aforesaid Dasan or to adduce any further evidence. In the nature of the materials and the material allegations, it is a case where the defence that is now sought to be built up is one, the credibility of which, would have to be tested on different grounds, including the proximity within which it is raised, in point of time, in answer to the notice of the first authority. A very belated opportunity to cross-examine Dasan will be a fruitless exercise, in common sense and insofar as the exchequer is concerned. At any rate, such an opportunity cannot be extended by reversing the impugned orders in exercise of authority u/s 63 of the KVAT Act. Resultantly, the revision fails and it is hereby dismissed.

Before parting, we see that, following earlier orders, Smt. K.M. Zuhra, Assistant Commissioner (Law), 1, Office of the Deputy Commissioner (Law), Commercial Taxes, Ernakulam has placed certain suggestions before this Court to streamline the procedure relating to release of goods which are intercepted and detained. We have gone through those suggestions. They are practical, reasonable and are required to further regulate the mechanism. They read as follows:

The goods can be released to the Consigner/Consignee/Transporter against sufficient security as provided in the KVAT Act.

In case the goods are in the custody of the common carrier along with other goods, the goods in question may be released to the transporter.

In case authorised persons of the consigner/consignee are appearing before the authority for the release of goods the goods can be released on production of proper authorisation of consigner/consignee as the case may be.

The aforesaid authorisation shall contain the full name, address and status of the person who is issuing authorisation, the full name and address of the authorised person, attested signature of the authorised person, the date of authorisation, purpose and scope of authorisation.

The authorisation shall preferably be in the letter pad of the consigner/consignee with seal.

The authorisation shall be valid for a maximum period of 60 days.

The authorised person shall produce the authorisation and ID proof (except for the Advocates, Chartered Accountants and Registered Sales Tax Practitioners).

The Chartered Accountants, Advocates and Registered Sales Tax Practitioners appearing before the detaining authority shall furnish relevant details showing their professional status.

The goods shall be released only against production of ownership details such as title of goods, consignee copy of Lorry Receipt/Railway Receipt/Airway Bill, Bill of Lading etc.; The authorisation shall contain relevant detail about the goods sought to be released.

We hereby direct that those suggestions shall gain the attention of the Commissioner of Commercial Taxes, and a circular or notification, as may be required and found appropriate, shall be issued at the earliest, for strict obedience by officers at all levels.