IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 2ND NOVEMBER 2009 / 11TH KARTHIKA 1931 WP(C).No. 30939 of 2009(J) -------------------------- PETITIONER(S): --------------- A.MANAF, DOOR NO.13/175, INDCO NAGAR, ERUMAD P.O., KUNNACHAL, NILGIRIS, TAMIL NADU. BY ADV. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENT(S): --------------- 1. INTELLIGENCE OFFICER, SQUAD NO.I, DEPARTMENT OF COMMERCIAL TAXES, KALPETTA. 2. STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT, TAXES DEPT., GOVT.SECRETARIAT, THIRUVANANTHAPURAM. 3. R.S.MANOJKUMAR, MANOJ CHICKEN, KAMBLAKKAD POST, WAYANAD DISTRICT-11. 4. THE SUB INSPECTOR OF POLICE, POLICE STATION, SULTHAN BATHERY. WAYANAD DISTRICT. SPECIAL GOVERNMENT PLEADER SRI.K.VINOD CHANDRAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02/11/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K.ABDUL REHIM, J. ------------------------------ W.P.(C).No.30939 OF 2009 ------------------------------ Dated this the 2nd day of November, 2009 J U D G M E N T ---------------------- 1. Petitioner is the owner of a Goods vehicle bearing No:TN-43/Z-4533. Grievance of the petitioner is that the vehicle in question is now detained by 1st respondent pursuant to issuance of Ext.P2 notice under Section 67(1) of the Kerala Value Added Tax Act, 2003 (KVAT Act). The allegation in Ext.P2 is that the petitioner had used the vehicle for transporting live chicken, value of which is estimated at Rs.2,28,800/-, by using delivery note issued by one Sri:R.S.Manojkumar, a registered dealer under the KVAT Act, from Gundalpett to Kamblakkad. At the time of transportation the Advance Tax was paid through a cheque which was subsequently dishonoured for the reason of “insufficient funds”. It is alleged that the cheque in question was issued misrepresenting the same as if it is a Demand Draft. It is further suspected that the driver or the person in charge of the vehicle had colluded with the owner of the goods in attempt of evasion of payment of tax. Therefore it is alleged that the vehicle is involved in committing fraud on the Government and thereby punishment under Section 67(1)(j) is warranted. W.P.(C).30939/09-J 2 Penalty is proposed to the tune of double the amount of tax sought to be evaded. 2. It is contended by the petitioner that imposition of penalty on the driver or person in charge of the vehicle is not sustainable based on the allegations contained in Ext.P2 notice, even if it is assumed that those allegations are true and correct. Learned counsel for the petitioner points out Section 51 of the KVAT Act which prescribes the liability upon persons in charge of a vehicle while transporting any consignment of goods. The said provision requires that the owner or other person in charge of a vehicle shall carry with him documents prescribed under Section 46(3) of the KVAT Act while transporting any consignment. There is no allegation in this case that the transport in question was effected without any valid documents as required under Section 46(3). It is also pertinent to note that the transport was permitted at the relevant time by the authorities at the border Check Post on receiving the instrument in question towards Advance Tax payment, whereas the relevant circular insisting payment of Advance Tax permits payment only through Demand Drafts. However, going by the impugned notice it cannot be alleged that the driver or person in charge of the vehicle has got any role or in any way responsible in tendering of the instrument by the owner of the goods in W.P.(C).30939/09-J 3 question towards payment of Advance Tax, which was subsequently dishonoured. Further more, detention of the vehicle at any rate cannot be justified under the provisions of Section 67. Hence I am of the opinion that the detention of the vehicle as well as issuance of Ext.P2 notice proposing imposition of penalty is initiated on a total misconception of the provision contained in the Act. 3. Under the above circumstances Ext.P2 is hereby quashed. However, it is made clear that quashing of Ext.P2 will not in any way affect proceedings against the vehicles or its owner or driver, if any criminal case is registered against them in this regard. C.K.ABDUL REHIM, JUDGE. okb