IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 9TH SEPTEMBER 2010 / 18TH BHADRA 1932 WP(C).No. 27971 of 2010(V) -------------------------- PETITIONER(S): --------------- M/S.KERALA TUBES LIMITED, V/180 (1), BOSCO NAGAR, KERALA AGRICULTURAL UNIVERSITY PO., THRISSUR, A PUBLIC LIMITED COMPANY, REPRESENTED BY ITS DIRECTOR, SRI.A.R.OUSEPH. BY ADV. SRI.E.P.GOVINDAN RESPONDENT(S): --------------- 1. THE INTELLIGENCE INSPECTOR, SQUAD NO.VI, COMMERCIAL TAXES, PALAKKAD-678 001. 2. THE STATE OF KERALA, REPRESENTED BY SECRETARY, TAXES DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM PIN – 695 001. 3. SREE PADMA BALAJI STEELS PVT.LTD., MENON PARA ROAD, KANJIKODE, PALAKKAD DISTRICT. -678 001. BY G.P. SRI. C.K. GOVINDAN FOR R1 & R2 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09/09/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C. K. ABDUL REHIM, J. =~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~= W.P.(C) No. 27971 of 2010 =~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~= Dated this the 9th day of September, 2010 JUDGMENT Petitioner is challenging interception and detention of transport of M.S.Pipes, which were sold to the 3rd respondent under Ext.P2 sale bill. 2. The reason for detention mentioned in Ext.P1 is that on a physical verification, it was revealed that the goods transported was only old “M.S. Pipes scrap”, which is a notified item, for the transport of which Form 15 Delivery Note is mandatory. There is a further allegation in Ext.P1 that the consignee is not a dealer of M.S. Pipes, but only a manufacturer of M.S. Ingot. Hence it is suspected that 'M.S.Pipes scrap', which was being transported is intended for the purpose of melting. It is also observed that value shown in the invoice is too low when compared with the market price of M.S.Pipes. Therefore demand was raised for furnishing security deposit to the tune of Rs.12,570/-, for permitting onward transport. W.P.(C) No. 27971/2010 2 3. It is submitted on behalf of the petitioner that the 1st respondent has not raised any doubt regarding genuineness of the sale bill, which accompanied the transport. It is further submitted that the observations contained in Ext.P1 to the effect that the item transported was only “M.S. Pipes scrap”, is absolutely baseless. According to the petitioner, the rate of tax applicable to both the goods are same, and even assuming that the goods transported was “M.S. Pipes scrap” there is no attempt of evasion of payment of any tax amount due. 4. Learned Government Pleader, on the other hand, pointed out that, the goods under transport was not tallying with the descriptions in the document which accompanied the transport and therefore, unaccounted transaction of “M.S. Pipes scrap”, which is a notified item, is reasonably suspected. 5. Section 47 of the KVAT Act contemplates an enquiry to be conducted by the competent authority to arrive at a conclusion as to whether the transport was W.P.(C) No. 27971/2010 3 genuine and as to whether there was any attempt of evasion of payment of tax. In the case at hand verification of the goods under transport by the competent authority is necessary in order to arrive at a just and correct conclusion. Learned counsel for the petitioner is therefore seeking directions for expeditious finalization of the enquiry within a time frame. 6. I am of the opinion that considering the peculiar nature of allegations in Ext.P1, a direction for finalization of the proceedings by the competent authority on an early basis after due verification of the goods and release of the goods subject to such finalization, will redress the grievance of the petitioner. 7. Under the above circumstances, the writ petition is disposed of directing the competent Enquiry Officer, to whom the detained goods and the vehicle will be handed over under section 47(2), to compete the enquiry on issuing notice to the petitioner and if necessary to the 3rd respondent, and also after conducting physical verification W.P.(C) No. 27971/2010 4 of the goods in the presence of the parties. Such enquiry shall be finalized at the earliest possible, at any rate within a period of one week from the date of receipt of a copy of this judgment. C. K. ABDUL REHIM, JUDGE. mn.