IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR FRIDAY, THE 25TH JANUARY 2008 / 5TH MAGHA 1929 OP.No. 37819 of 2002(B) ----------------------- PETITIONER: ------------ S.RAJARATINAM,PROPRIETOR OF M/S.SUNDARI SPICES, 57/CW-2,ULAGATHEWAR STREET CUMBUM,TANIL NADU. BY ADV. SRI.JOHN JOSEPH(ROY) RESPONDENTS: ------------- 1. STATE OF KERALA,REPRESENTED BY THE SECRETARYTO GOVT. OF KERALA,COMMERCIAL TAXES SECRETARIAT, THIRUVANANTHAPURAM. 2. THE DEPUTY COMMISSIONER,COMMERCIAL TAXES KATTAPPANA,IDUKKI DISTRICT 3. THE INTELLIGENCE OFFICER, COMMERCIAL TAXES,KATTAPPANA, IDUKKI DISTRICT. BY GOVERNMENT PLEADER SRI. K.P. PRADEEP THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 25/01/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 2 ORDER ON CMP 63819 OF 2002 IN OP 37819 OF 2002 DISMISSED 25.1.2008 SD/-C.N.RAMACHANDRAN NAIR, JUDGE. APPENDIX PETITIONER'S EXHIBITS: EXT.P1 TRUE COPY OF THE ORDER NO. A2-85/2000 DATED 22.4.2000 PASSED BY THE THIRD RESPONDENT. EXT.P2 TRUE COPY OF THE ORDER NO. A2-85/2000 DATED 19.7.2002 ISSUED BY THE THIRD RESPONDENT. RESPONDENTS' EXHIBITS: NIL. TRUE COPY P.S. TO JUDGE. C.N. RAMACHANDRAN NAIR, J. -------------------------------------------- O.P. NO. 37819 OF 2002 -------------------------------------------- Dated this the 25th day of January, 2008 JUDGMENT Petitioner is challenging Ext.P2 order whereunder the third respondent declined to grant refund to the petitioner of the value of pepper seized from road on 22.3.2000 and sold thereafter under court orders. While conducting inspection, the sales tax authorities noticed smuggling of pepper from the private property in Cumbamettu. When the sales tax team reached the area, those in charge of 1680 Kgs. of peper abandoned the same on the road side and left the place. The case of the third respondent is that even though the departmental officials waited till 7 PM for the owners to come and claim the goods, nobody turned up. The goods were accordingly taken over possession by the department on 22.3.2000 itself. Thereafter publication was made in the newspaper directing the owner to make claim before the department. Petitioner is the sole claimant of the goods and the petitioner put forward his claim on 24.3.2000 itself. Thereafter several O.Ps. were filed by the petitioner before this Court which led to final adjudication 2 of this case. 2. Pepper now stands sold and after adjusting sales tax an amount of Rs. 2,40,278/- stands deposited in the treasury. The prayer in this O.P. is for direction to the respondents to refund the value of pepper recovered by the State. I heard counsel for the petitioner and Government Pleader and I have gone through Ext.P2 order also. The sale of goods and appropriation of sale proceeds to the State is contained in Section 29A(14) of the KGST Act, which authorises confiscation and sale of goods if found transported in the name of bogus or unidentifiable persons. This is a case where the department seized the goods abandoned by the dealers when attempt to smuggle out the goods was detected. Petitioner has no explanation as to why the petitioner or his agents left the place on seeing the sales tax officials. Obviously petitioner was apprehending follow-up action in the form of enquiry and penalty proceedings for evasion of tax for the whole year and in order to avoid the same, petitioner and his agents abandoned the goods. This is therefore a case covered by Section 29A(14) of the Act and department is perfectly justified in selling the goods and 3 appropriating the sale proceeds to itself. However, it is to be noted that inspite of publication in newspapers petitioner is the only one who claimed the goods and there is no other rival claimant. If goods are owned by any other person, having regard to the value of goods, he or she would have made a claim petition. Since there is no rival claim by any other person and the petitioner has made the claim for the goods on the third day of the seizure itself and persistently contesting the matter by filing as many as five Writ Petitions, including this O.P., and one Writ Appeal, I am of the view that probabilities prove that petitioner is the owner of the goods. However, petitioner's claim was rejected on account of inconsistent stand taken by the petitioner, in as much as original claim was that petitioner purchased the goods from Tamil Nadu but later shifted the stand and contended that goods were purchased from dealers in Kerala. In any case since the petitioner has established through preponderance of probabilities that petitioner is the owner of the goods and there is no other claimant, I am of the view that petitioner is entitled to refund if not full amount. If the petitioner had owned up the goods then and there, the department could have 4 established evasion of tax and levied tax and penalty. Chances of enquiry, detention of similar cases of evasion by petitioner and levy of penalty could not be ruled out. Considering all these, and on equitable grounds, I direct the third respondent to grant refund of 50% of the net sale proceeds deposited, exclusive of sales tax amount within one month from the date of production of a copy of this judgment. The balance will be treated as deposit with the Department under Section 29A(14) of the KGST Act. O.P. is disposed of as above. (C.N. RAMACHANDRAN NAIR) Judge kk 5