IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 7TH OCTOBER 2009 / 15TH ASWINA 1931 WP(C).No. 28024 of 2009(W) ----------------------------------------- PETITIONER(S): ------------------------- SHEFEER P.A, PROPRIETOR, OVERSEAS TIMBERS, VAZHICHERRY WARD, ALAPPUZHA. BY ADV. MR.P.N.DAMODARAN NAMBOOTHIRI RESPONDENT(S): --------------------------- 1. THE INTELLIGENCE INSPECTOR, SQUAD NO.VI, COMMERCIAL TAXES, ERNAKULAM. 2. THE COMMERCIAL TAX OFFICER, COMMERCIAL TAXES, IIND CIRCLE, ALAPPUZHA. R1 & R2 BY GOVERNMENT PLEADER MR. C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07/10/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss C.K.ABDUL REHIM,J. ------------------------------- WP(C).NO. 28024 of 2009 --------------------------------- Dated this the 7th day of October , 2009 JUDGMENT Petitioner has approached this court inter alia seeking direction to release goods detained by the first respondent on issuing Ext.P5 notice. According to the petitioner he is engaged in the manufacture and export sale of “Guitar parts” made out of 'Rosewood', for which he has consigned Rosewood purchased from a dealer in the State of Karnataka. Eventhough the goods transported is a notified item for which payment of advance tax is liable, petitioner was issued with Ext.P2 certificate by the assessing authority concerned, evidencing excess credit tax payment, and the transport was effected on the strength of that certificate without paying advance tax. As per Ext.P4 circular (Circular No.27/07) dealers like the petitioner was permitted to effect transport without payment of advance tax on production of certificate showing credit of excess tax payment. Therefore the transport was purely legal and valid is the contention. 2. On a perusal of Ext.P5 notice it is evident that the WP(C).28024/09 2 detention was for the reason that the date of Ext.P2 certificate was 19.9.2009, but the transport was effected after a period of 15 days. It is further stated that the credit available as certified in Ext.P2 is Rs.79500/- whereas the consignment in question requires payment of advance tax to the tune of Rs.87485/-. It is also stated that from the description of the consignee it is only discernible that the petitioner is a dealer whereas the benefit of circular No.27/07 is available only industrial units. Further it is pointed out that the check post authorities have not endorsed extent of adjustment of advance tax with respect to the consignment, and the transport was not accompanied with a certificate having such endorsement duly authenticated from the check post. 3. Learned counsel for the petitioner vehemently contended that none of the grounds enumerated in Ext.P5 are legal or tenable for detention of the goods. However the question whether there was any attempt at evasion of tax is a matter which is to be decided on finalisation of the adjudication. It is not proper for this court to enter on merits of the rival contentions to arrive at any finding in this stage. At the same time continued WP(C).28024/09 3 detention of the goods till finalisation of the adjudication is not warranted. Hence I am of the opinion that the goods can be released on the petitioner furnishing proper security. 4. In the result, the writ petition is disposed of directing the first respondent to release the goods along with vehicle detained under Ext.P5 notice, on the petitioner making payment of an amount equivalent to 50% of the security deposit demanded under Ext.P5 towards advance tax, without prejudice to finalisation of the adjudication proceedings and also on furnishing a security bond in the form provided under the KVAT Rules without sureties, for the balance 50%. 5. It is made clear that payment of advance tax is directed without prejudice to the competent authority in completing adjudication proceedings and without prejudice to the imposition of penalty, if the petitioner is ultimately found liable. The competent authority under section 47 is directed to expedite the adjudication and to complete the same as early as possible, at any rate, within a period of two months from the date of release of the goods. C.K.ABDUL REHIM,JUDGE pmn/ WP(C).28024/09 4