IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM FRIDAY, THE 16TH OCTOBER 2009 / 24TH ASWINA 1931 WP(C).No. 29228 of 2009(W) -------------------------- PETITIONER(S): --------------- V.SHERIF, AGED 46 YEARS, S/O.V.AHMEDKUTTY HAJI, MANAGING DIRECTOR, HILL WOOD FURNITURE PVT.LTD. AND HILL WOOD IMPORTS AND EXPORTS PVT. LTD., EXCELL PLAZA, THUMPAPADAM, PETTA, FEROKE, KOZHIKODE. BY ADVS. SRI.BABU JOSEPH KURUVATHAZHA SRI.K.I.SAGEER IBRAHIM RESPONDENT(S): --------------- 1. STATE OF KERALA REPRESENTED BY ITS CHIEF SECRETARY TO GOVERNMENT, GOVT.SECRETARIAT, THIRUVANANTHAPURAM. 2. THE COMMERCIAL TAX INSPECTOR, GOPALAPURAM, PALAKKAD DISTRICT. BY GOVT. PLEADER SRI. C.K. GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 16/10/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K. ABDUL REHIM, J - - - - - - - - - - - - - - - - - - - - - - - W.P.(C)No. 29228 of 2009 - - - - - - - - - - - - - - - - - - - - - - - Dated this the 16th day of October, 2009 J U D G M E N T 1. Petitioner is aggrieved by detention of transport of timber effected from Pollachi in the State of Tamil Nadu to Kozhikode within the State. The goods consigned is imported Timber, Swan logs of 'Pincoda'. The goods were transported from Pollachi to Feroke at Kozhikode in a lorry bearing registration No.KL 11/AA-3511. According to the petitioner since the goods under transport is a notified item, he had already remitted Advance Tax, calculated at the value, at the rate of Rs.1,000/- per cubic feet. But the transport was intercepted by the 2nd respondent at the boarder check post on issuing notice as evidenced by Ext.P4, under Section 47 (2) of the Kerala Value Added Tax Act, 2003 (KVAT Act).The reason for detention mentioned in Ext.P4 is that the quantity as per the Delivery Note is 125 cubic feet, but on physical verification and measurement it W.P.(C)No. 29228 of 2009 -2- is revealed that the actual quantity is 165 cubic feet. Hence there is a difference in quantity of 37 cubic feet. It is further alleged that the value shown in the documents is very low. Therefore attempt at evasion of payment of tax was suspected and the goods was detained under Ext.P4 demanding security deposit to the tune of double the amount of tax due on the difference of 37 cubic feet. 2. According to the petitioner, as per Circular No.41/2006 and 28/2008 issued by the Commissioner of Commercial Taxes, the value at the rate of which the advance tax need be collected is prescribed and the value fixed therein is Rs.800/- per cubic feet only. Therefore it is contended that the security deposit demanded based on the calculation at the rate of Rs.1,300/- per cubic feet, is totally baseless. It is further contented that the 2nd respondent has not conducted any actual measurement and the finding that there is excess quantity of 37 cubic feet, is not true and correct. Since the petitioner had already remitted advance tax calculated at the rate of Rs.1,000/- per cubic feet the W.P.(C)No. 29228 of 2009 -3- additional demand is totally unsustainable, is the contention. 3. The Government Pleader on the other hand contended that the value fixed as per the Circular referred above, is the value of the round log and with respect to the swan timber the value will be always higher. It is also contented that the advance tax is liable to be paid at the rate at which the goods are expected to be sold within the State and therefore the demand of security deposit is only reasonable, is the contention. 4. Having considered rival contentions and facts and circumstances of the case, I am of the opinion that whether there was any attempt at evasion of payment of tax is a matter need be decided on finalisation of the adjudication proceedings. Since the petitioner had raised serious dispute regarding quantity of timber, it is the incumbent on the part of the 2nd respondent to have physical verification and measurement being conducted in the presence of the petitioner, at the expense of the petitioner. The report of W.P.(C)No. 29228 of 2009 -4- the measurement will facilitate a proper adjudication of the matter and finalisation of the proceedings under Section 47. 5. In the result, the writ petition is disposed of directing the 2nd respondent to arrange physical measurement of the goods detained under Ext.P4, in the presence of the petitioner if necessary with the help of any expert at his expense, at the earliest, at any rate within a period of two days of receipt of copy of this judgment. The goods detained under Ext.P4 shall be released along with the vehicle immediately on completion of measurement, on the petitioner depositing Advance Tax at the rate of 12.5% on the value of difference in quantity if any found, on finalisation of the measurement. The 2nd respondent may also consider the contention of the petitioner regarding the excess rate at which valuation has been adopted in Ext.P4 notice and may realise the amount based on a reasonable valuation. Petitioner shall also furnish security bond for the balance amount demanded under Ext.p4 without sureties in the form provided under the KVAT Rules. W.P.(C)No. 29228 of 2009 -5- 6. The competent authority under Section 47 (5) & (6) shall expedite finalisation of the adjudication proceedings after affording an opportunity to the petitioner as early as possible at any rate within one month from the date of release of the goods. C.K. ABDUL REHIM JUDGE shg/