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. 31167 of 2010 (U) -------------------------- PETITIONER: --------------- M/S.KARNAKI IMPEX, SINA BUILDING, ROOM NO.8, HIGH SCHOOL JUNCTION, KARUNAGAPPILLY, REPRESENTED BY ITS PROPRIETRESS, SUBHADRA MAHESH. BY ADV. SRI.K.J.ABRAHAM RESPONDENT: -------------------- THE INTELLIGENCE INSPECTOR, SQUAD NO.IV, DEPARTMENT OF COMMERCIAL TAXES, ERNAKULAM. 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. 31167 of 2010-U ---------------------------- Dated this the 12th day of October, 2010. J U D G M E N T Timber logs, Timber swan sizes, and Panel Doors Hardwood transported from Cochin Port to the business place of the petitioner at Karunagappally was intercepted by the respondent, on issuing Ext.P5 notice under Section 47(2) of the Kerala Value Added Tax Act (KVAT Act). According to the petitioner the goods in question were imported from Gujarat through coastal port at Cochin and it was transported on the strength of Departmental Delivery Note, Form 8FA Declaration, Invoices, Bill of Entry, and Certificate evidencing payment of Advance Tax. The goods were detained for the reason that, on verification it was revealed that, neither the consignor nor the consignee had declared the species of timber and it was also revealed that the timber transported are imported “Mirandi” timber logs. The respondent, on the basis of enquiry conducted, realised that the market value of the goods is far above than the value declared and suspecting wilful undervaluation with an intention of evading tax, the goods were detained and security deposit was W.P(C) No. 31167 of 2010-U 2 demanded to the tune of double the amount of tax on the differential value calculated. 2. According to learned counsel for the petitioner, there was no undervaluation as alleged and the value as revealed in the Bill of Entry was truly reflected in the documents which accompanied the transport. Learned Government Pleader on the other hand contended that, there was a misclassification of the goods and the gross variation in value when compared with the market value, gives rise to a reasonable suspicion regarding attempt in evasion of payment of tax. 3. I am of the considered opinion that the issue need not be decided in this writ petition, as the detention will be followed by an enquiry contemplated under Section 47. But pending finalisation of such enquiry, the goods can be released on the petitioner furnishing proper security. 4. Under the above circumstances, the writ petition is disposed of directing the respondent to release the goods along with the vehicle, which was detained under Ext.P5 notice, on the petitioner furnishing Bank Guarantee for the 50% amount demanded therein and also on furnishing security bond in the form prescribed W.P(C) No. 31167 of 2010-U 3 under the KVAT Rules, without sureties, for the balance amount. 5. 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. C.K.ABDUL REHIM JUDGE ab