IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH FRIDAY, THE 24TH OCTOBER 2008 / 2ND KARTHIKA 1930 WP(C).No. 30842 of 2008(V) -------------------------- PETITIONER(S): --------------- MADAN MOHAN, PROPRIETOR, MANJU ENTERPRISES, CHERUTHURUTHY, THRISSUR. BY ADV. SRI.J.DEVADANAM SRI.VINOD J.DEV SRI.PRAMOD J.DEV RESPONDENT(S): --------------- 1. THE COMMERCIAL TAX INSPECTOR, COMMERCIAL TAXES CHECKING STATION, LAKKIDI, WAYANAD. 2. THE INTELLIGENCE OFFICER, SQUAD NO.I, DEPARTMENT OF COMMERCIAL TAXES, KALPETTA, WAYANAD. SHRI.C.K.GOVINDAN, GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24/10/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.M.JOSEPH, J. ------------------------- W.P.(C.) No.30842 of 200 --------------------------------- Dated, this the 24th day of October, 2008 J U D G M E N T The petitioner challenges Exts.P6, P8 & P9. Ext.P6 is the notice issued under Section 49 of the KVAT Act. Exts.P8 & P9 are the notices issued under Sec.47(2) of the Act. Briefly put the case of the petitioner is as follows :- The petitioner is the proprietor of a timber business. On 14/10/2008, he consigned 69 logs of jackwood from Ambalawayal, Wayanad to Pattambi. It is stated that he is not having a transaction prior to the present one for the past two years. Further case of the petitioner is that since documents relating to the business were available, he used the delivery note, which was available with him for transporting the 69 logs of jackwood. When the vehicle reached Lakkidi check post, the 2nd respondent found that the goods were transported using an old and invalid delivery note and detained the vehicle with the goods and the WP(C) No.30842/2008 -2- impugned notices were issued. It is stated that the delivery note used in Form No.26 under the KGST Act is invalid. It is also stated that on the basis of the documents produced, the declared business place in Ambalavayal has not been ascertainable. It is further stated that consignment was not accompanied by any valid documents as stipulated under Section 47 of the KVAT Act, the only document produced in Form 26. It is further stated that in the light of the above facts, a redemption fee equal to thrice the amount of tax due at the rate applicable to the goods liable to seizure and detention and twice the tax due or an amount of Rs.50,000/- has to be given for the release of the vehicle in lieu of detention. Petitioner's objections were called. In Ext.P8, it is stated that as the delivery note is not prescribed under the KVAT Act, the genuineness of the documents produced bonafides of the transport and attempt to evade payment of tax payable under KVAT Act is suspected, and as the goods are notified goods, sub section (3) of Section 49 is applicable. Accordingly, the redemption fee is sought WP(C) No.30842/2008 -3- and Rs.50,000/- is demanded for the vehicle. In Ext.P9, it is stated that the delivery note is invalid, and in the absence of purchase bills, the genuineness of the local bill is not proved. The consignment was not accompanied by any valid document as provided under Section 47 of the KVAT Act and therefore, the genuineness of the transaction and the evasion of tax is suspected and by applying Section 49 of the Act, an amount Rs. 72,043/- is demanded as redemption fee for the goods and amount for release of the vehicle. 2. Heard learned counsel for the petitioner and learned Government Pleader. 3. Learned counsel for the petitioner submits that if at all, the proceedings would lie only under Section 47(2) of the Act, as it could be said that the document was not accompanied, as the delivery note was issued under the KGST Act. He would further point out that there is no basis at all to invoke Section 49. Per contra, the learned Government Pleader would submit that the certificate of WP(C) No.30842/2008 -4- ownership was not available with the petitioner. Admittedly, the delivery note is the one, which could not have been used by the petitioner, contends the learned Government Pleader. He also submits that in such circumstances, notice under Section 49 could not be said to be unjustified. He also submits that being a purchase by the petitioner under Section 6(2) of the Act, from an unregistered dealer, the bills should have been in Form 8E. Having considered the facts of the case, this writ petition is disposed of directing that on the petitioner furnishing Bank Guarantee for a sum of Rs. 72,043/-, the vehicle and the goods will be released forthwith to the petitioner. The adjudication process will be completed in accordance with law at the earliest, within a period of two months from the date of production of a copy of this judgment. (K.M.JOSEPH, JUDGE) jg