IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM FRIDAY, THE 24TH SEPTEMBER 2010 / 2ND ASWINA 1932 WP(C).No. 29435 of 2010(D) -------------------------- PETITIONER(S): --------------- EVEREST AGENCIES, 30/1511, NARAYANASAN ROAD, PONNURUNNI, VYTTILA, COCHIN – 19, REPRESENTED BY ITS PARTNER E. JEYAMVALARMATHI BY ADV. DR.K.B.MUHAMED KUTTY, SENIOR ADVOCATE SRI.K.M.FIROZ RESPONDENT(S): --------------- 1. THE INTELLIGENCE INSPECTOR, SQUAD NO.V, DEPARTMENT OF COMMERCIAL TAXES, ERNAKULAM. 2. COMMERCIAL TAX OFFICER, KAVAT CIRCLE-II, KALAMASSERY, ERNAKULAM. BY G.P.SRI. V.K.SHAMSUDEEN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24/09/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C. K. ABDUL REHIM, J. =~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~= W.P.(C) No. 29435 of 2010 =~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~= Dated this the 24th day of September, 2010 JUDGMENT Grievance of the petitioner is with respect to interception of goods transported inter-state, which was purchased by the petitioner on payment of CST, on the basis of an allegation that there is undervaluation in the invoice issued by the dealer in Tamil Nadu. 2. In Ext.P2 notice issued under section 47(2) of Kerala Value Added Tax Act, 2003, the reason for detention mentioned is that, apart from 528 numbers of Stabilizers 200 numbers of Clocks were also seen in the packets. The value shown in the invoice when compared with the M.R.P. exhibited was found to be only 23% and 37% of the M.R.P. Hence, the value was re-fixed suspecting evasion of payment of tax and security was demanded to the tune of double the amount of tax due on the differential amounts. 3. Contention of the petitioner is that, even assuming that there is undervaluation with respect to the inter-state W.P.(C) No. 29435/2010 2 purchase, the same cannot be taken as a ground for detention apprehending remote possibility of undervaluation at the time of future sale within the State. Even if undervaluation is there only the seller in the other State is responsible, and for that penalty could not be imposed on the petitioner, is the contention. 4. Heard learned Government Pleader appearing for the respondents also. 5. I am of the opinion that question whether there was any attempt in evasion of payment of tax is a matter which need not be decided in this proceedings, because an enquiry as contemplated under section 47 of the KVAT Act is pending finalization. I am of the opinion that the goods can be released on the petitioner furnishing proper security, pending finalization of the enquiry. 6. Under the above circumstances, the writ petition is disposed of directing the 1st respondent to release the goods along with vehicle which was detained under Ext.P2 notice, on the petitioner furnishing security bond as W.P.(C) No. 29435/2010 3 provided under the KVAT Rules, without sureties, for the value demanded under Ext.P2 notice. 7. The competent authority under section 47 of the KVAT Act will finalize the enquiry after affording an opportunity of hearing to the petitioner, at the earliest possible, at any rate within a period of two months from the date of release of the goods. C. K. ABDUL REHIM, JUDGE. mn.