IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN WEDNESDAY, THE 17TH AUGUST 2011 / 26TH SRAVANA 1933 WA.No. 1218 of 2011() --------------------- AGAINST THE JUDGEMENT IN WPC.20460/2011 Dated 27/07/2011 .................... APPELLANT/PETITIONER ------------------------ UNNIKRISHAN N.P., PROPRIETOR, M/S. ARUN VENEER, ANJUKKUNNU, MANANTHAVADY, WAYANAD DISTRICT. BY ADV. SRI.P.N.DAMODARAN NAMBOODIRI RESPONDENTS/RESPONDENTS -------------------------- 1. THE INTELLIGENCE OFFICER (IB), DEPARTMENT OF COMMERCIAL TAXES, WAYANAD, KALPETTA-672 121. 2. COMMISSIONER OF COMMERCIAL TAXES, THIRUVANANTHAPURAM-695 033. 3. THE COMMERCIAL TAX OFFICER, DEPARTMENT OF COMMERCIAL TAXES, MANANTHAVADY, WAYANAD-670 645. BY G.P. SRI.MOHAMMED RAFEEQ THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 17/08/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & P.S.GOPINATHAN, JJ. .................................................................... Writ Appeal Nos.1218 of 2011 .................................................................... Dated this the 17th day of August, 2011. JUDGMENT Ramachandran Nair, J. Appellant challenged notices issued for two years proposing penalty for undervaluation of goods sold namely, veneers and plywood and consequent evasion of tax. Since only notices were challenged, the learned Single Judge declined to interfere. However, Writ Appeal is filed contending that undervaluation is determined based on Circular issued by the Commissioner on the average price of the commodity and, therefore, the officer is likely to confirm penalty in terms of proposal. We have heard counsel for the appellant and Government Pleader for the respondent. 2. Counsel produced sample of the product sold by the appellant which is veneer and not plywood and, therefore, according to the appellant, the Circular itself does not apply. Government Pleader on the other hand submitted that factual issues have to be gone into by the officer and the appellant can raise all the objections before the officer. W.A. 1218/2011 2 After hearing both sides, we do not think we are in a position to decide the controversy which pertains to even the identity of the item manufactured and sold by the appellant. If the department finds practice of undervaluation, then there is nothing wrong in fixing bench mark price with reference to which undervaluation could be considered. In any case having regard to the contention raised by the appellant that he is not engaged in manufacture and sale of plywood, we direct the Intelligence Officer to conduct inspection of the appellant's factory, verify the records including purchase of raw materials and the sale bills, transport documents and all other details including receipts accounted through Bank documents, machinery used in the manufacture and all such things to decide as to what are the products sold by the appellant and whether there is real undervaluation and whether the Circulars referred to in the notice are applicable to appellant's product and decide the matter after issuing proposal to the appellant and after giving opportunity to file reply and a hearing to the appellant. There will also be direction to the Intelligence Officer to verify the certificate of registration and if necessary, co-ordinate with W.A. 1218/2011 3 the Assessing Officer before issuing penalty orders. Writ Appeal is disposed of modifying the judgment of the learned Single Judge as above. C.N.RAMACHANDRAN NAIR Judge P.S.GOPINATHAN Judge pms