IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON TUESDAY, THE 29TH JUNE 2010 / 8TH ASHADHA 1932 WP(C).No. 19932 of 2010(N) -------------------------- PETITIONER(S): --------------- M/S.CONVERGENT TECHNOLOGIES, 204, 2ND MAIN ROAD,MAHALAKSHMI LAYOUT,BANGALORE- 560 086,REPRESENTED BY ITS PROPRIETOR MR.NITHIN S.SHETTY. BY ADV. SMT.K.LATHA RESPONDENT(S): --------------- 1. THE STATE OF KERALA REPRESENTED BY CHIEF SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM. 2. THE INTELLIGENCE INSPECTOR, SQUAD NO.11, COMMERCIAL TAXES,ALAPPUZHA AT CHENGANOOR. BY GOVT. PLEADER SRI.C.K.GOVINDAN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29/06/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R.RAMACHANDRA MENON, J. ------------------------------- W.P.(C) No.19932 of 2010 ------------------------------- Dated this the 29th day of June, 2010 J U D G M E N T The petitioner who is the consignor in Bangalore had despatched a generator, to the consignee in Thiruvananthapuram, which is covered by Ext.P1 Purchase order and Ext.P2 invoice. The goods were sent from Bangalore through a Courier. From the admitted pleadings and proceedings, it is revealed that, it was brought to the Airport at Nedumbassery in Cochin and it was being taken in the vehicle bearing Registration NO. KL-01-AB-534 to the premises of the consignee in Thiruvananthapuram. It was at this point, that the vehicle was intercepted, leading to the issuance of Ext.P3 notice under Section 47(2) of the KVAT Act, observing that there was clear violation of the stipulation contemplated under Section 46 (3)(e) of the KVAT Act, 2003, doubting evasion of tax and demanding security deposit to the extent as specified therein. W.P.(C) No.19932/2010 2 2. The consignor has approached this Court by filing this writ petition, stating that, due to some or other reason, the consignee is not ready to accept the generator and hence the petitioner wants to take it back. It is also stated that there is no sale involved and that, there is no attempt to evade any tax under any circumstance. The learned counsel for the petitioner also brought it to the notice of this Court, with reference to the actual rate of tax payable, that the particular item will attract tax only at the rate of 4%, whereas, the probable tax calculated by the concerned respondent while issuing Ext.P3 notice is at the rate of 12.5%, demanding security deposit to an extent of double the amount, which is not correct or proper under any circumstance. 3. The learned Government Pleader appearing for the respondents submits that the petitioner is not a registered dealer in Kerala and that the attempt was only to deliver the item only to the consignee, conspicuously trying to evade the W.P.(C) No.19932/2010 3 tax. It is also stated that infringement of Section 46(3)(e) of the KVAT Act is undisputed, in so far as the arrival of the goods by Air was not intimated to the departmental authority at any time. The learned Government Pleader further concedes that the actual rate of tax applicable to the commodity in question could only be at the rate of 4%. 4. In the above circumstances, this Court finds that the probable liability and the amount to be furnished as security deposit to be satisfied by the petitioner have to be re-worked, adopting the actual rate of tax at 4%, and a revised notice shall be issued to the petitioner forthwith, on which event, it is open to the petitioner to satisfy the security deposit, either in the form of 'Cash/DD' or by way of 'Bank Guarantee', as the case may be, on which event, the goods shall be released to the petitioner forthwith. This will be without prejudice to the rights and liberties of the respondents to pursue the adjudication proceedings, which shall be finalised in accordance with law, as W.P.(C) No.19932/2010 4 expeditiously as possible, at any rate, within a period of two months from the date of receipt of a copy of this judgment. The Writ Petition is disposed of accordingly. P.R.RAMACHANDRA MENON, JUDGE. nj.