IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 12TH OCTOBER 2010 / 20TH ASWINA 1932 WP(C).No. 31163 of 2010 (U) -------------------------- PETITIONER: ------------------ C.VAIKUNDA SEKHAR PROPRIETOR, M/S.AYYA VAIKUNDAR TRADERS, VANDANOOR, PERUMBALUTHOOR PO, MARANALLOOR, THIRUVANANTHAPURAM DISTRICT 695 126. BY ADV. DR.K.B.MOHAMEDKUTTY, SENIOR ADVOCATE RESPONDENTS: ---------------------- 1. THE INTELLIGENCE INSPECTOR SQUAD NO.III, COMMERCIAL TAXES, ALAPPUZHA – 680001. 2. THE COMMERCIAL TAXES OFFICER, COMMERCIAL TAXES DEPARTMENT, OFFICE NEYYATTINKARA,THIRUVANANTHAPURAM - 695001. BY SENIOR GOVERNMENT PLEADER, SRI.C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12/10/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: VK C.K.ABDUL REHIM, J --------------------------- W.P(C) No.31163 of 2010-U ---------------------------- Dated this the 12th day of October, 2010. J U D G M E N T Petitioner is aggrieved by interception of a transport, wherein fishing ropes purchased from the State of Maharashtra is being detained, on issuing Ext.P4 notice under Section 47(2) of the Kerala Value Added Tax Act (KVAT Act). According to the petitioner the goods is an exempted item as per Entry 18 of the first schedule of the KVAT Act, having HSN Code No.5607.49.00. On a perusal of Ext.P4, it is revealed that the first respondent, after verification of the goods under transport, found that the item transported was P.P rope which is meant for uses other than fishing and is a taxable item at the rate of 12.5%. According to him the goods under transport will come under HSN Code No.5607.49.00. Hence it is suspected that there is collusion between the consignor in Maharashtra and the petitioner for misclassification of goods with, an intention to evade payment of tax due. 2. According to the petitioner all the documents which accompanied the transport will reveal that the item transported was W.P(C) No.31163 of 2010-U 2 only P.P fishing rope. It is stated that the petitioner had effected sale enroute to various dealers on the strength of invoices describing the item as P.P fishing rope. It is contended that the findings of the first respondent that the goods is a different commodity is without any basis. 3. Learned Government Pleader on the other hand pointed out that on verification, the first respondent was convinced that the rope in question is one not being used for fishing purposes and it will not fall within the category mentioned in HSN Code No.5607.49.00. Therefore this is an item coming under HSN Code No.5607.90, which is taxable at the rate of 12.5% as unclassified item under Entry 103 of SRO 82/2006. 4. Having considered the rival contentions, I am of the opinion that any findings on the disputed aspect need not be arrived, in view of the procedure prescribed under Section 47 contemplating an enquiry. It is brought to my notice that the petitioner is a registered dealer, who is regularly paying tax. Under such circumstances, I am of the opinion that the goods can be released pending finalisation of the enquiry. 5. In the result, the writ petition is disposed of directing the W.P(C) No.31163 of 2010-U 3 first respondent to release the goods along with the vehicle, which was detained under Ext.P4 notice, on the petitioner furnishing security bond in the form prescribed under the KVAT Rules without sureties for the value demanded under Ext.P4. 6. At the time of release of the goods, the first respondent is directed to keep a small piece of sample of the rope for the purpose of verification at the time of enquiry. 7. The competent authority is directed to finalise the enquiry after affording an opportunity of hearing to the petitioner, within a period of six weeks from the date of release of the goods. Sd/- C.K.ABDUL REHIM JUDGE //True Copy// P.A to Judge ab W.P(C) No.31163 of 2010-U 4