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Judgment
Justice Antony Dominic
Petitioner is a dealer in timber. They are having their Head Office in Calicut, for which they have registration under the KVAT and CST Acts. They have also a branch at Pollachi in Tamil Nadu where also required registration under the Tamil Nadu Value Added Tax Act has been obtained. Petitioner imports timber from various countries through different ports. They also send part of such consignments to their Pollachi Branch by stock transfer. These consignments are accompanied by the prescribed documents including the transit passes issued in Form No. 7B of the KVAT Rules.
In so far as this writ petition is concerned, the timber imported through the Kochi Port and stored in the customs bonded warehouse, was cleared and a consignment was sent to the petitioner''s Pollachi Branch. For this purpose, they also obtained transit passes in Form No. 7B from the Sales Tax Facilitation Centre at Willington Island. However the consignment in question was detained by the 1st respondent as per Ext. P10 and the reason mentioned is that as per Section 48(1) of the KVAT Act and Rule 68 of the Rules, transit pass can be used only by dealers outside the State who imported the goods into the State for transporting the same to destinations outside the State. Petitioner filed Ext. P11 reply. However, that was rejected by Ext. P12. It is in these circumstances the writ petition is filed.
Thus the only question that arises is whether Section 48 of the KVAT Act dealing with the issue of transit pass apply to dealers within the state who are sending imported commodities to outside the State.
Counter affidavit has been filed and in the counter affidavit, although various contentions have been raised, the fact that the goods in question were imported into the State as per Bill of Entry No. 264946 dated 9/3/2010 is admitted. Therefore, the character of the goods, that it is an imported commodity, is not in dispute.
Once the position is clarified as above, reference should be made to Section 48 of the KVAT Act itself. Section 48(1) to (6) read as under:
Transit of goods through the State and issue of transit pass-(1) When a vehicle or vessel carrying goods from any place outside the State and bound for any place outside the State passes through the State, the owner or consignor of goods or owner or driver or person in charge of such vehicle or vessel shall obtain a transit pass in the prescribed form for such goods from the officer-in-charge of the first check post after his entry into the State and deliver it to the officer-in-charge of the last check post before his exit from the State.
(2) if the owner or consignor of goods or owner or driver or person in charge of such vehicle or vessel fails to deliver the transit pass for such goods referred to in sub-section (1) to the last check post, it shall be presumed that such goods which are liable to tax under this Act and the goods have been delivered within the State for sale;
Provided that where the goods carried by such vehicle or vessel are, after their entry into the State, transported outside the State by any other vehicle or conveyance, the onus of proving that goods have actually moved out of the State, shall be on the owner or consignor of goods or owner or driver or person in charge of such vehicle or vessel, as the case may be.
(3) Where it is presumed under sub-section (2) that the goods carried in a vehicle or vessel have been delivered within the State for sale by the owner or consignor of goods or owner or driver or person in charge of such vehicle or vessel such owner or consignor of goods or owner or driver or person in charge of the vehicle or vessel shall be jointly or severally liable to pay tax which shall be assessed and recovered in accordance with the relevant and provisions of this Act, irrespective of the limit of any turnover together with an amount of penalty not exceeding twice the amount of such tax as may be assessed, after having given to the person or persons aforesaid an opportunity of being heard by the assessing authority under whose jurisdiction the check post is situate.
(4) Where any person consigns any goods or transports any goods liable to tax under this Act from another State into the State without any records as provided for u/s 46 or where the particulars furnished in the documents accompanying the goods are false or the consignor or purchaser stated therein is found to be bogus or non-existent or is not traceable or where the transporter fails to prove the bona fides of the transport, it shall be presumed that such goods have been sold in the State by the consignor or the owner of the goods (or the transporter or the owner or person in charge of the vehicle) or the person in charge of the goods or all of them jointly and they shall be jointly and severally liable to pay tax on such sales which shall be assessed and recovered in the manner provided for in sub-section (3).
(5) For the purpose of this section, the owner or driver or person in charge of the vehicle or vessel shall, unless he is a registered dealer under this Act, be deemed to be a registered dealer for assessment of tax under this Act.
(6) Where the goods enter the State by way of import from foreign countries through any airport or sea port and the goods are transported to a place outside the State through a vehicle or vessel, the transit pass shall be obtained from the first check post or from the office of the Commercial Taxes Department nearer to the airport or seaport, as the case may be, and the provisions in sub-sections (1) to (5) shall apply accordingly.
A reading of Sub section (6) extracted above shows that where the goods enter the State by way of import from foreign countries through any airport or seaport and are transported to a place outside the State through a vehicle, transit pass shall be obtained from the first check post. It also provides that in such a case, sub section (1) to (5) shall apply. In this case, goods were imported from Myanmar to Kochi Port Trust and were stored in the bonded warehouse. Goods were cleared from the warehouse and on completion of import were taken to the Sales Tax Facilitation Centre at Willington Island where endorsement was made on the transit passes. Such a transport is fully covered by Section 48(6). If that be the position, the basis on which Ext. P10 has been issued viz., that Section 48 applies to dealers outside the State transporting goods through the State for delivery outside the State is erroneous. Therefore, the detention ordered as per Ext. P10 and reiterated in Ext. P12 cannot be sustained and are quashed.
Writ petition is disposed of accordingly.