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Judgment
Justice P.R. Ramachandra Menon
APPENDIX
PETITIONER''S EXHIBITS:-
EXT.P1:
True Copy of Advance Tax Payment Receipt Dtd. 15.03.2012.
EXT.P2:
True Copy Of The Notice Issued By The 2nd Respondent On 19.3.2012 To K.P.Jayarajan.
EXT.P2(a):
True Copy of The Notice Issued by The 2nd Respondent on 19.03.2012 to M/s. Mohammed Sali and Sons.
EXT.P2(b):
True Copy of The Notice Issued by The 2nd Respondent on 19.03.2012 to M/s. Akshaya Agencies.
EXT.P2(c):
True Copy of The Notice Issued by The 2ND Respondent on 19.03.2012 to M/s. Anjaneya Fire Works.
EXT.P2(d):
True Copy of The Notice Issued by The 2nd Respondent on 19.03.2012 to M/s. Royal Trade Links.
EXT.P2(e):
True Copy Of The Notice Issued By The 2nd Respondent On 19.03.2012 To Sri.C.Achuthan.
EXT.P2(f):
True Copy Of The Notice Issued By The 2nd Respondent On 19.03.2012 To Sachidananda Fire Works.
EXT.P2(g):
True Copy Of The Notice Issued By The 2nd Respondent On 19.03.2012 To SreeRemyaDinesh.
EXT.P2(h):
True Copy of The Notice Issued by The 2nd Respondent on 19.03.2012 to M/s. Vijaya Fire Works.
EXT.P3:
True Copy of Judgment Dtd. 11.04.2012 in WPC No. 8613/2012 of This Hon''ble Court.
EXT.P4:
True Copy of The Letter Dtd. 25.04.2012 Submitted to The 2nd Respondent by K.P.Jayapalan.
EXT.P4(a):
True Copy of The Letter Dtd. 25.04.2012 Submitted to The 2nd Respondent by M/s. Mohammed Sali and Sons.
EXT.P4(b):
True Copy of The Letter Dtd. 25.04.2012 Submitted to The 2nd Respondent by M/s. Akshaya Agencies.
EXT.P4(c):
True Copy of The Letter Dtd. 25.04.2012 Submitted to The 2nd Respondent by M/s. Anjaneya Fire Works.
EXT.P4(d):
True Copy of The Letter Dtd. 25.04.2012 Submitted to The 2nd Respondent by M/s. Royal Trade Links.
EXT.P4(e):
True Copy of The Letter Dtd. 25.04.2012 Submitted to The 2nd Respondent by Shri. C. Achuthan.
EXT.P4(f):
True Copy of The Letter Dtd. 25.04.2012 Submitted to The 2nd Respondent by Sachidananda Fire works.
EXT.P4(g):
True Copy of The Letter Dtd. 25.04.2012 Submitted to The 2nd Respondent by SreeRemyaDinesh.
EXT.P4(h):
True Copy of The Letter Dtd. 25.04.2012 Submitted to The 2nd Respondent by M/s. Vijaya Fire Works.
EXT.P5:
True Copy of Written Representation with Receiving Dtd. 27.04.2012 Submitted by The 1st Petitioner to The 2nd Respondent.
EXT.P5(a):
True Copy of Written Representation with Receiving Dtd. 27.04.2012 Submitted by The 2nd Petitioner to The 2nd Respondent.
EXT.P5(b):
True Copy of Written Representation with Receiving Dtd. 27.04.2012 Submitted by The 3rd Petitioner to The 2nd Respondent.
EXT.P5(c):
True Copy of Written Representation with Receiving Dtd. 27.04.2012 Submitted by The 4th Petitioner to the 2nd Respondent.
EXT.P5(d):
True Copy of Written Representation with Receiving Dtd. 27.04.2012 Submitted by The 5th Petitioner to The 2nd Respondent.
EXT.P5(e):
True Copy of Written Representation with Receiving Dtd. 27.04.2012 Submitted by The 6th Petitioner to The 2nd respondent.
EXT.P5(f):
True Copy of Written Representation With Receiving Dtd. 27.04.2012 Submitted by The 7th Petitioner to The 2nd Respondent.
EXT.P6:
True Copy of Circular No. c2-43133/2008 Dtd. 04.02.2009.
EXT.P7
Copy Of The Adjudication Order No. Vc-V/581/2011-12 To 589/2011-12 Dated 25/04/2012 Along With The Demand Notice Passed By The First Respondent.
EXT.P8
Copy Of The Current Price List Of The First Petitioner At The Time Of Sending The Consignment.
EXT.P9
Copy of The Price Lsit of Another Dealer M/s.Shakthi Fire Works Pvt. Ltd.
EXT.P10
COPY OF THE SALE BILLS AS PER INVOICE NOS.216, 217, 219, 220, 221, 223, 228, 230 AND 233 DATED 14/03/2012 ISSUED BY THE 1ST PETITIONER.
EXT.P11
Copy Of The Sale Bills As Per Invoice Nos.137, 140, 143 And 146 Dated 14/03/2012 Issued By The Second Petitioner.
EXT.P12
Copy Of The Sale Bill As Per Invoice No. Os.0061 Dated 22/02/2012 Issued By The Third Petitioner.
EXT.P13
Copy Of The Sale Bills As Per Invoice Nos.103 And 104 Dated 13/03/2012 Issued By The Fourth Petitioner.
EXT.P14
Copy Of The Sale Bill As Per Invoice No. 00329 Dated 29/03/2012 Issued By The Fifth Petitioner.
EXT.P15
Copy Of The Sale Bill As Per Invoice No. 031 Dated 05/03/2012 Issued By The Sixth Petitioner.
EXT.P16
Copy Of The Sale Bill As Per Invoice No. 220 Dated 13/03/2012 Issued By The Seventh Petitioner.
EXT.P17
Copy Of The Sale Invoice Nos.015, 028, 204, 238, 239, 240 And 127 Issued By The First And Second Petitioners.
RESPONDENT''S ANNEXURES:-
Annexure R2A
Copy of The Order Dated 25/04/2012.
This is the 3rd writ petition in respect of the same cause of action; this time preferred at the instance of the consignors at Sivakashi in Tamil Nadu, the first one having been preferred by the consignees/dealers in Kerala and the other one, by the owner of the vehicle in which the goods (fireworks/crackers) were transported, which was intercepted on 16.03.2012 at Gopalapuram check post, doubting evasion of tax and demanding security deposit. The sequence of events is as follows:
As many as ''nine'' dealers registered under the KVAT and CST Act in the State of Kerala purchased various items of crackers/sparklers/fireworks from the present petitioners/consignors in Sivakashi, in connection with the on coming ''Vishu festival'' and the above goods were being transported in the vehicle bearing No. KL 10 F 2772, on the strength of the invoices collecting the CST at the rate of 12% on the value shown therein. Before crossing the check post in Gopalapuram, the advance tax u/s 47(16A) was satisfied (as borne by Ext.P1) @ 140% as prescribed in Ext.P6 Circular. In the course of transit, the vehicle was intercepted by the second respondent on 16.03.2012, issuing Ext.P2 series notices u/s 47(2) of the KVAT Act, doubting evasion of tax and demanding security deposit to the extent as specified therein. Physical verification of the goods was carried out in the presence of the driver/representative of the consignees on 18.06.2012, which revealed that the declared value was only to an extent of 5% of the MRP.
Challenging the detention, the consignees/dealers in Kerala approached this Court by filing W.P.(C) No. 8613/2012. When the matter came up for consideration on 04.04.2012, this Court directed to release the goods on furnishing security by way of Bank Guarantee from a nationalized Bank. The matter came up for further consideration on 11.4.2012, when it was brought to the notice of this Court that no Bank Guarantee was furnished and hence the goods were not released. In the said circumstances, the writ petition was disposed of as per Ext.P3 judgment, directing the competent authority to complete the adjudication within ''two weeks''.
While so, an attempt was made through the owner of the lorry for getting the goods released or at least to cause the vehicle to be released by filing W.P. (C). No. 13704/2012 raising almost similar contentions. The petitioner therein also challenged the adjudication effected by the competent authority, whereby the proceedings were finalized arriving at a clear finding that there was an attempt to evade the tax and that the consignees and the owner of the vehicle had colluded together in this regard. The challenge raised by the owner of the vehicle was that, there was absolutely no material before the adjudicating authority to arrive at such a finding that the owner of the vehicle had also colluded in the attempt to evade the tax in respect of the alleged under valuation. It was contended that if at all any under valuation was there or any attempt to evade the tax was pursued, the authority could proceed only against the parties concerned, either the consignees or the consignors as the case may be and not against the owner of the vehicle.
After hearing both the sides, this Court as per judgment dated 28.06.2012 held that, but for the ''passing observations'' in paragraphs 3, 4 and 7 of the impugned order in the said case, there was absolutely no discussion as to the manner in which or the materials on which the alleged collusion on the part of ''owner'' of the vehicle was arrived at. It was also observed, there was no case for the respondents that the goods were not supported by valid documents as contemplated u/s 46(3) of the KVAT Act. Observing that the requirement u/s 46(3) stood satisfied and that the owner of the vehicle was not bound to run after the consignees or consignors or in the local market to appraise and satisfy himself as to the market value of the commodity carried in the vehicle, it was held that the alleged collusion on the part of the ''owner'' of the vehicle was not established. Thus the impugned order passed by the adjudicating authority, fixing liability upon the ''owner'' of the vehicle was set aside, at the same time, sustaining the order imposing penalty in all other respects on the others concerned.
The present writ petition has been filed by the consignors in Sivakasi only on 31.5.2012, i.e., much after passing the order dated 25.4.2012 by the adjudicating authority, that too, without any challenge against the said order, although a copy of the order was subsequently produced as Ext.P7 along with I.A. No. 7631/2012 (the same has also been produced as Ext.R2(a) by the second respondent along with the statement dated 07.06.2012). The contention of the consignors in this writ petition is that, the ''Vishu'' festival was already over on 14.04.2012. Contending that there was no market for the product any further, the consignees declined to have the goods cleared and they filed Ext.P4 series representations before the adjudicating authority on 25.04.2012 expressing that they did not intend to have the goods cleared and that the same might be released to the consignors. Obviously, these representations are dated 25.04.2012, i.e., the date on which the penalty order was passed by the adjudicating authority. Petitioners contend that they have also preferred similar representations as borne by Ext.P5 series dated "27.4.2012", i.e., after passing the final order on 25.4.2012, seeking for permission to take back the goods to Sivakasi, which is sought to be enforced by issuance of writ of mandamus in this writ petition.
The second respondent has filed a statement pointing out the sequence of events and the ''modus operandi'' in evading the tax. It is seen from the order passed by the adjudicating authority that the physical verification pursuant to Ext.P2 series detention on 16.3.2012 was completed on 18.03.2012, in presence of the driver and person in charge of the goods, which revealed that the declared value on which advance tax was paid, (as shown in Ext.P1) was only to an extent of 5% of MRP. After detailed deliberations, the adjudicating authority observed that, with effect from 01.04.2012, the rate of tax on fire works and crackers had been enhanced from 12.5% to 13.5% and hence a revised notice dated 01.04.2012 was issued to the consignees demanding security deposit in terms of the Financial Bill 2012, reckoning just 30% of the MRP shown, as given in the following table:
Name and Address of the Kerala Dealer
Value Conceded in The Invoice Accompanied
Value Reckoned in the MRP Value
Value Adopted for collection of Advance Tax in The Check Post
Value Adopted at 30% of The MRP Value
Differential Value (5-4)
Security Deposit Demanded
1
2
3
4
5
6
7
K.P. Jayabalan, M/s. Maharaja Home Needs, Kozhikode.
91772/-
1965050/-
128480/-
589515/-
461035/-
124479/-
Mohammed Sali and Sons, Britania Fire works, Kannur
29038/-
557800/-
40653/-
167340/-
126687/-
34205/-
Akshaya Agencies, High Way Junction, Kannur
12784/-
331250/-
17897/-
99375/-
81478/-
22000/-
Anjeneya Fire works, Thalikkavu, Kannur
20466/-
336000/-
28652/-
100800/-
72148/-
19480/-
Royal Trade Links, Thalikkavu, Kannur.
49455/-
2149020/-
69237/-
644706/-
575469/-
155377/-
C. Achuthan, Prakash Fireworks, Kathiroor
131808/
3193600/-
184531/-
958080/-
773549/-
208858/-
Sachidananda Fireworks, Thazhechova, Kannur
65648/-
1590400/-
91907/-
477120/-
385213/-
104008/-
Ramya Dinesh, Sree Muthappan Fireworks, Thazhechova, Kannur
65727/-
1660450/-
92018/-
498135/-
406117/-
109652/-
Vijaya Fireworks, Yogasala Road, Kannur.
42470/-
1190950/-
59458/-
357285/-
297827/-
80413/-
After considering the facts and figures, the adjudicating authority arrived at a finding that there was a clear attempt to evade the tax by the consignees, joining hands with the consignors who issued the invoices showing a much lesser rate and thus imposed penalty on the consignees (depending upon the value of goods shown differently). In the I.A. No. 7631/2012 and the reply affidavit dated 12.06.2012, the petitioners/consignors have stated that the order passed by the adjudicating authority is not correct or sustainable, for not having heard the consignors and that, conveyance being part of inter State sale, Section 47(2) could not have been attracted. In spite of the fact that the petitioners/consignors are aware of the order passed by the adjudicating authority, producing the same as Ext.P7, they have not so far chosen to cause the writ petition to be amended, raising appropriate pleadings and prayers and Ext.P7 (same as Ext.R2(a)) stands in tact, against which there is no challenge in the writ petition. The writ petition is liable to be dismissed on this score alone.
The specific case of the consignees/dealers in Kerala who filed W.P.(C). No. 8613/2012, leading to Ext.P3 judgment was that, they had purchased the fireworks from the present petitioners/consignors in Sivakasi, which was being brought to Kerala. The sale/purchase as above is admitted by petitioners as well, who produced copies of sale bills along with I.A. No. 8069/2012 as Exts.P10 to P17 series. The sale is complete in all respects, so far as the sale of movable property is concerned as per the relevant provisions of the Sale of Goods Act, on parting with the possession, accepting the sale consideration. The sale bills produced reveal the alleged value of goods, the CST paid, the forwarding and handling charges, insurance charges etc and are not credit bills. The sale being complete in all respects, the owners/consignees who are the dealers in Kerala approached this Court by filing W.P. (C). No. 8613/2012, seeking to release the goods leading to Ext.P3 judgment. As such, how could the consignors/petitioners come up with a prayer to permit them to take back the goods to Sivakasi, is the crucial question. this Court finds that, there is absolutely ''no locus standi'' for the petitioners/consignors to come up with such a prayer before this Court, more so, when there is not even a whisper anywhere in the writ petition filed before this Court or even in Ext.P5 series representations that, they continued to be the owners of the goods. The writ petition fails on this count as well.
Incidently, it is noted that the matter was finally heard on 13.06.2012, but thereafter, the petitioners filed another I.A. as I.A.No. 8069/2012 on 15.06.2012 producing copies of sale invoices in respect of the sales effected to the consignees as Ext.P10 series to P17 series. The attempt of the petitioners/consignors appears to be, to establish that the sales price shown therein is in conformity with the ''price list'' of the 1st petitioner, declared the time of sending the consignment and the ''price list'' of another dealer by name Shakti Fireworks (P) Limited, produced as Ext.P8 and P9 respectively, along with the reply affidavit dated 12.06.2012. In paragraph ''2'' of the affidavit in support of I.A.8069/2012, it is stated as follows:
The petitioners are advised to produce copies of the invoices issued in favour of the different consignees in order to substantiate the contention that the sales are effected as per the price list in force at the relevant time and further that these bills accompanied the consignments and were produced at the Commercial Taxes check post at Gopalapuram and thereafter before the 1st respondent. The sale bills would disclose that Central Sales Tax is collected on the value of the goods and also that the consignors and consignees are registered dealers under the Sales Tax Law of the respective States. True copies of the sale bills issued by all the petitioners are produced herewith and marked as Exhibits P10, P11, P12, P13, P14, P15 and P16 respectively.
On going through the various bills produced, which allegedly accompanied the consignment, which was intercepted on 16.3.2012, it is seen that, Ext.P17 invoice No. 015 in respect of one of the consignees (3rd petitioner to Ext.P3 judgment) is dated ''04.04.2012'' and invoice No. 028 in respect of the same consignee is dated ''06.04.2012''. Ext.P17(3) invoice No. 204 issued to one of the consignees (7th petitioner in Ext.P3 judgment) is of ''9th February, 2012''. Ext.P17(4) invoice No. 238 in respect of another consignee (4th petitioner to Ext.P3 judgment) is dated ''23.03.2012'' while Ext.P17(5) invoice No. 239 in respect of yet another consignee (1st petitioner to Ext.P3 judgment) is dated ''23.03.2012''. Similar is the position with regard to Ext.P17(6) invoice No. 240 in respect of another consignee (2nd petitioner to Ext.P3 judgment) which is dated ''23.03.2012''. When the petitioners/consignors contend that all these bills/invoices were there in support of the transportation and were produced before the check post authorities on the date of interception on 16.03.2012 leading to Ext.P2 series notices u/s 47(2) and thereafter before the 1st respondent as specifically pleaded in paragraph ''2'' of the affidavit in support of the I.A.No.8069/12, how the bills issued on 23.03.2012 and in April 2012 could accompany the goods detained on 16.03.2012 remains a matter of mystery, probably known only to the consignors and the consignees.
In the above circumstances, this Court finds that there is absolutely no merits or bonafides in the writ petition filed by the petitioners/consignors. It is accordingly dismissed with cost of Rs. 5,000/-(Rupees five thousand) payable to the Kerala High Court Legal Services Committee within one month, failing which, it will be open for the Registry to issue necessary Certificate to the beneficiary for realization.