IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC MONDAY, THE 7TH JANUARY 2008 / 17TH POUSHA 1929 WP(C).No. 116 of 2008(L) ------------------------ PETITIONER: ------------ M/S.INDEX INDIA SURGICALS & PHARMACEUTICALS, GANGA PADMAM, SREEVARAHAM, MANACAUD, THIRUVANANTHAPURAM-695 009, REPRESENTED BY PROPRIETOR P.S.RAJASEKHARAN NAIR. BY ADV. SRI.T.M.SREEDHARAN SRI.V.P.NARAYANAN RESPONDENTS: ------------- 1. THE INTELLIGENCE INSPECTOR, SQUAD NO.II, COMMERCIAL TAXES, PALAKKAD. 2. THE COMMERCIAL TAX OFFICER, IIIRD CIRCLE, PEROORKKADA, THIRUVANANTHAPURAM. 3. STATE OF KERALA, REPRESENTED BY CHIEF SECRETARY, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. BY GOVT. PLEADER MR. C.K. GOVINDAN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04/01/2008, THE COURT ON 07/01/2008 DELIVERED THE FOLLOWING: ANTONY DOMINIC, J. = = = = = = = = = = = = = = = = W.P.(C) No. 116 OF 2008 L = = = = = = = = = = = = = = = = Dated this the 7th January, 2008 J U D G M E N T This writ petition has been filed praying for quashing Ext. P1 notice under Section 47(2) of the KVAT Act, 2003 demanding security deposit from the petitioner and to direct release of the goods covered by Ext. P2 invoice. 2. Petitioner submits that on the basis of Ext. P2 invoice, the petitioner had purchased the goods and that the goods transported were detained as per Ext. P1. The irregularities noticed in Ext. P1 are that the MRP of the goods under transport, quoted was Rs.6/- per unit and that the value quoted in the accompanying document was only 80 paise per unit. Suspecting attempt to evade tax, based on the MRP, value was fixed by the respondents and security has been demanded on that basis. 3. Petitioner submits that the value is correctly declared in Ext. P2 invoice. In the reply that was given vide Ext. P3, petitioner has also stated that irrespective of the MRP declared, the market price is WPC No. 116 of 2008 -2- much low. In fact, petitioner produced Exts. P4 and P5 which indicate, according to him, that for the very same goods, the price realised is much low. It is also contended that since the goods have not reached the State, Section 47(2) of the KVAT Act is inapplicable. 4. Having regard to the fact that the MRP declared is Rs.6/- per unit and that the value quoted in the invoice is only 80 paise per unit, this Court will not be justified in concluding that the evasion of duty suspected or that the action taken by the respondents is totally arbitrary, warranting interference by this Court. In the nature of the irregularities noticed, this is a case for enquiry. The question regarding the very applicability of Section 47(2) is also a matter to be decided. 5. What remains is the request of the petitioner for releasing the goods pending such adjudication. The petitioner would contend that it being a registered dealer under the KVAT Act, and as there is no justification for the detention, the goods are liable to be released. However, having regard to the fact that the case merits an enquiry and in the nature of the allegations, it will not be proper for WPC No. 116 of 2008 -3- this Court to release the goods without safeguarding the interest of the respondents as well. 6. Therefore, I dispose of this writ petition directing that on the petitioner furnishing a bank guarantee or a bond with sureties for the security deposit demanded under Ext. P1 the goods in question as per Ext. P1 be released to the petitioner. Adjudication will thereafter be held and the parties will be governed by the order to be passed. ANTONY DOMINIC JUDGE jan/-