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Judgment
The petitioner is a sub-contractor, engaged in a works
contract within the State of Kerala. Admittedly the petitioner
purchased an electric generator for the purpose of using it in
execution of the works contract. The petitioner availed of
concessional rate on the ground of C-Form sales as available in
Section 8(1) of the Central Sales Tax Act, 1956 [for brevity " CST
Act "]. The petitioner also uploaded Form No.8F as per Exhibit P4.
The goods, however, were transported based on Form No.16,
Exhibit P5, as goods for own use. The goods were detained at the
check post and notice at Exhibit P1 was issued. The petitioner
submits that the petitioner is ready to pay the advance tax and
further even furnish bank guarantee as security deposit. The
petitioner also is a registered dealer.
Petitioner, obviously, has attempted evasion of tax
on two counts; one by claiming concessional rate of CST under
Section 8(1) when the petitioner had not purchased the goods for
re-sale within the State. The petitioner admittedly is using the
same for his own purposes. If the petitioner had purchased the
same for re-sale within the State of Kerala, then necessarily the
petitioner ought to have paid advance tax, since generator is
notified for levy of advance tax under the Kerala Value Added Tax
Act 2003 [for brevity "KVAT Act"]. But, the petitioner transported
the goods on the strength of Form No.16. The petitioner is, hence,
prima facie, found to be guilty of attempt to evade tax on two
counts; (i) claiming concessional rate from outside State and (ii)
claiming own use, by transporting the goods on the strength of
Form 16.
If the petitioner''s purchase was entitled to be levied
concessional rate under Section 8(1) of the CST Act, then the
petitioner ought to have paid advance tax at the entry point. If the
petitioner was brining the goods for own use [Form 16], then the
petitioner ought not to have availed the concessional rate in the
State of purchase. Though the sales tax authority of the recipient
State would not be able to detain the goods for reason of the
evasion attempted at the originating State, this Court, under Article
226 of the Constitution, would be aptly justified in not exercising
discretion in the case of a person who had attempted such
evasion.
The learned Counsel for the petitioner refers to
Exhibit P4, Form No.8F and Form No.16, produced at Exhibit P5,
and the distance of time, in the execution of both the documents to
contend that it is a bona fide mistake. This Court is unable to
countenance such a contention, especially since the petitioner
having uploaded Form No.8F on the basis of the concessional rate
availed under the CST Act at the originating State, necessarily had
to pay advance tax at the check post of entry, which the petitioner
sought to evade tax by producing a Form 16 declaration.
This Court, in the aforesaid circumstances, declines
exercise of discretion and the writ petition would stand dismissed.
All the same, the petitioner would be entitled for release of the
goods on the petitioner paying half the amounts demanded and
also providing sufficient bank guarantee for the balance demand.