IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH FRIDAY, THE 9TH JANUARY 2009 / 19TH POUSHA 1930 WP(C).No. 30132 of 2007(K) -------------------------- PETITIONER(S): --------------- RASHEED PULIYARAKKAL, PULIYARAKKAL HOUSE, VALIYAPARAMBA, KODUVALLY, REPRESENTED BY HIS POWER HOLDER ABDUL KHADER K.P. BY ADV. SRI.V.V.ASOKAN SMT.S.AMINA RESPONDENT(S): --------------- 1. DEPUTY COMMISSIONER (INTELLIGENCE), COMMERCIAL TAXES, KOZHIKODE. 2. THE INTELLIGENCE OFFICER, SQUAD NO.1, WAYANAD. 3. THE INTELLIGENCE OFFICER, SQUAD NO.2, COMMERCIAL TAXES, WAYANAD. SPL. GOVERNMENT PLEADER SRI.VINOD CHANDRAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 09/01/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX PETITIONER'S EXHIBITS: P1 COPY OF MAHAZAR. P2 COPY OF AFFIDAVIT FILED BEFORE R2. P2(A) COPY OF DECLARATION FILED BEFORE R2. P2(B) COPY OF LETTER GIVEN BY THE JEWELLERY. P2(C) COPY OF TESTIMONIAL GIVEN BY ABDUL NAZAR PD. P2(D) COPY OF TESTIMONIAL GIVEN BY P.K.SOOPY. P3 COPY OF NOTICE ISSUED BY R3. P4 COPY OF NOTICE ISSUED BY R3. P5 COPY OF REPRESENTATION. RESPONDENTS' EXHIBITS: R1(A) COPY OF NOTICE DT 24.4.07. R1(B) COPY OF LETTER DT 1.3.07. // TRUE COPY // P.A. TO JUDGE K.M. JOSEPH, J. ```````````````````````````````````````````````````` W.P.(C) No. 30132 OF 2007 K ```````````````````````````````````````````````````` Dated this the 9th day of January, 2009 J U D G M E N T Petitioner challenges Ext.P4. Direction is sought to release the gold and silver ornaments and currency seized as per Ext.P1 mahazar. Further direction is sought to forbear the 2nd respondent from proceeding further with Ext.P4. 2. Case of the petitioner in brief is as follows. Petitioner was employed abroad for a continuous period of 15 years. He came back in February 2006 and decided to do business in gold and silver ornaments on a small scale basis. He procured 116.070 gms of gold, 13.240 kg of new silver and 1.235 kg of old silver and carried the same in a suitcase along with Rs.34,825/-. The petitioner was standing near Sulthana Jewellery, Meenangadi. The 2nd respondent, who was conducting vehicle checking, suspected the petitioner, approached the petitioner and asked about the contents of the suitcase. The petitioner threw the suitcase carrying the ornaments and currency into the Sulthana Jewellery, Meenangadi. It is the case of the petitioner it is done WPC.30132/07 : 2 : under fear. Ext.P1 is the mahazar prepared dated 19.2.2007. The seized goods and currency are in the custody of the respondents. The petitioner filed Ext.P2 affidavit, Ext.P2(a) declaration of ownership of goods and cash, Ext.P2(b) letter of the Manager, Sulthana Jewellery, Ext.P2(c) testimonial given by a Councilor of the Kizhakkoth Grama Panchayat and Ext.P2(d) testimonial given by another Councilor of the Padinjarethara Grama Panchayat. The 3rd respondent gave reply vide Ext.P3 asking to produce all accounts of the petitioner. The petitioner explained his position that he was a beginner and he need not have any accounts or other documents. He was prepared to pay the tax. Ext.P4 is stated to be a notice issued by the 3rd respondent to confiscate the entire gold and silver ornaments and cash. 3. A counter affidavit is filed by the respondents wherein reference is made to section 47(16) of the KVAT Act. Reply affidavit is filed and an additional counter affidavit is also filed producing Exts.R1(a) and R1(b). Ext.R1(a) is a notice under section 44(9) of the KVAT Act. In Ext.R1(a), it is the stand taken that the officers who effected the seizure were conducting vehicle WPC.30132/07 : 3 : checking and upon the person in the Jewellery denying ownership of the goods seized they have issued Ext.R1(a) notice. Ext.R1(b) is a letter given by the employee of Sulthana Jewellery wherein it is, inter alia, stated that the petitioner had been inside the business premises of Sulthana Jewellery and it was after he went out that he threw the goods into the shop. 4. I heard learned counsel for the petitioner and learned special Government Pleader Sri.Vinod Chandran. Learned counsel for the petitioner would contend that the petitioner had produced materials to show that the petitioner is the actual owner of the goods. She would point out that there is no power under section 49 of the Act to detain the goods or to confiscate the goods as sought to be done. It is further contended that there is no power to the authority under section 47(16) of the Act to proceed to confiscate the goods. The goods are not notified goods under section 49 and further the goods are not recovered from any vehicle. It is further contended that there is no power to detain the goods or to confiscate the cash. 5. Per contra, learned special Government Pleader WPC.30132/07 : 4 : would submit that it is a case where actually the petitioner had been inside the shop room as indicated in R1(b) and thereafter he came out and then threw it back. It is the case that the goods would come within the corners of section 44(9) of the Act for which indeed a notice was given as Ext.R1(a). He would further contend that a perusal of Ext.P4 would show that the officer has dealt with the claim of the petitioner and found no merit therein but of course has proceeded to issue a proposal to confiscate the goods and cash. He would also submit that the petitioner has been essentially set up as a stooge apprehending liability in the teeth of unaccounted goods in the shop room, the petitioner is sought to be made use of for procuring the goods. He further points out that, as found by the officer, the details furnished by the petitioner in an attempt to establish that he is doing business only on a few bills all consecutively numbered and all relate only to silver whereas the case of the petitioner is that the petitioner is doing business in gold and silver. 6. Section 49 of the KVAT Act cannot be invoked in the facts of this case. Section 49 deals with notified goods and, WPC.30132/07 : 5 : therefore, Section 49 of the Act cannot be invoked for a proposal to confiscate the goods in question or the cash in question. Section 47 also cannot be invoked in the facts of this case. As far as Ext.R1(a) notice which is issued under section 44 is concerned, that is not called in question before this court. Therefore, I need not pronounce on the said notice or the said proceeding. As far as Ext.P4 is concerned, the proposal to impose confiscation based under section 47(16) may not have any legs to stand on. Therefore, any proposal contained in Ext.P4 to impose confiscation by invoking section 47(16) is to be interfered with. I do not see how the petitioner could be said to have established the claim with reference to the materials which had been the subject matter of the discussion in Ext.P4. In fact, the learned Government Pleader would point out that Ext.P4 is a decision on the claim and also a proposal to confiscate and while rejection of the claim is only to be sustained, the proposal to confiscate cannot be sustained under section 47(16). I also take note of the contention of the learned Government Pleader that the law does not actually contemplate in the circumstances opportunity as such. WPC.30132/07 : 6 : Therefore, in such circumstances, while I quash Ext.P4 containing the proposal to confiscate the ornaments and cash, as it is not permissible under section 47(16) or section 49, I further make it clear that it is open to the petitioner to produce any other material within a period of three weeks from the date of receipt of a copy of this judgment before the 1st respondent in which case the respondent will consider and take a decision within a further period of two weeks. Needless to say, I have not pronounced on the right of the respondent to proceed in accordance with law under Ext.R1 (a). Writ petition is disposed of as above. Sd/- (K.M.JOSEPH, JUDGE) aks // TRUE COPY // P.A. TO JUDGE