K.V. Shiras vs State of Kerala and Others

C.N. Ramachandran Nair, J.—W.P.(C) is filed challenging notice issued u/s 47(2) of the KVAT Act. Petitioner''s case is that Petitioner is a wholesaler with registration under the KVAT Act remitting tax on regular basis. Government Pleader after taking instruction submitted that sale is to sister concern and by virtue of the irregularities noticed, detailed enquiry has to be conducted. The learned Single Judge ordered release of the goods on furnishing Bank Guarantee for 50% of the amount demanded and security bond for the balance 50%. Considering the amount of tax being remitted by the Petitioner every month and since Petitioner has already furnished security for the registration maintained under the KVAT Act, we feel the direction of the learned Single Judge to furnish Bank Guarantee for 50% of the security amount can be dispensed with because if penalty happens to be levied, there cannot be any difficulty to recover the amount from the Petitioner. We, therefore, dispose of the W.P.(C) directing Respondents to release the goods on furnishing a simple bond without surety for the security amount and along with it a copy of the certificate of registration issued to the Petitioner under the KVAT Act. The interim order of the learned Single Judge shall stand modified to the above extent. The enquiry officer is directed to complete the enquiry and finalise the adjudication within a period of two months from now.