Rishab Impex vs State of Kerala, The Commercial Tax Inspector and The Commercial Tax Officer

C.K. Abdul Rehim, J.—The petitioner is a registered dealer under the provisions of the Kerala Value Added Tax Act, 2003 (for short `the Act''). The petitioner is aggrieved by detention of the transport of goods effected from Chennai to Ernakulam, under the provisions of Section 47(2) of the Act, by issuing Ext.P3 notice. According to the petitioner, the goods transported are "Satellite Receivers" and parts which are imported from China through Chennai Port. Contention is that transport was accompanied by the required certificate prescribed under the Tamil Nadu VAT Act namely, K.K. Certificate and the goods were transported in 2 different consignments arranged through 2 transport agents. While one of such transports reached the border check post on 22.09.09, the 2nd respondent intercepted suspecting evasion of payment of tax.

It is noticed that the reason for detention mentioned in Ext.P3 is that, the transport was accompanied only by documents such as photocopy of K.K Certificate, invoice of the petitioner raised from China and bill of entry issued by the Customs House, Chennai. It is further stated that the photocopy of the invoice accompanied the transport is not a valid document to effect interstate movement. It is also noticed that the transport was effected in a different vehicle other than the vehicle mentioned in the bill of entry. On the basis of the above suspicions, genuineness of the transport was doubted and security was demanded under the provisions of Section 47(2) of the Act alleging attempt at evasion of payment of tax.

It is the case of the petitioner that subsequent to the detention, the petitioner had produced originals of invoices, bill of entry, and other such documents. But the 2nd respondent was not prepared to release the goods. Hence the petitioner is seeking direction for release of the goods without insisting for payment of security demanded.

Heard learned Counsel for the petitioner and the Government Pleader appearing for respondents. The question whether there was any attempt at evasion of payment of tax is a matter which need be decided after completing the process of adjudication as contemplated u/s 47(2) of the Act. It is not proper for this Court to enter into the merits of the rival contentions and to arrive at any finding at this stage. However detention of goods need not be continued till finalisation of such adjudication, especially in view of the proviso to Section 47(2) of the Act. Under such circumstances, I am of the opinion that this Writ Petition can be disposed of directing release of the goods detained, on the petitioner furnishing proper security.

In the result, this Writ Petition is disposed of directing the 2nd respondent to release the goods mentioned in Ext.P2 notice, on the petitioner paying 50% of the amount of security demanded under Ext.P3 as `advance tax'' and on furnishing security bond without sureties as provided under the Rules, for the balance amount.

It is made clear that the payment of 50% of the security amount as `advance tax'' will not in any way preclude the authorities from proceeding with the adjudication and from imposing penalty if it is ultimately found that the petitioner is liable. The competent authority shall finalise the adjudication after affording an opportunity of hearing to the petitioner, as early as possible - at any rate, within a period of two months from the date of release of goods.