IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 6TH OCTOBER 2010 / 14TH ASWINA 1932 WP(C).No. 30520 of 2010(L) -------------------------- PETITIONER(S): --------------- 1. MANOHARAN, S/O. NALLASWAMI, AGED 60 YEARS, 162/66, PERIYAR BHAVAN, THIRUVANAI KOVIL, TRICHY-5. 2. MANIMARAN P., 52/12, MANNADY STREET, FRIENDS COMPLEX, 3RD FLOOR, CHENNAI. BY ADV. SRI. K.SIJU SRI.S.SUDHEESHKAR RESPONDENT(S): --------------- 1. INSPECTING ASSISTANT COMMISSIONER (INTELLIGENCE), COMMERCIAL TAXES, KOLLAM-691 001. 2. INTELLIGENCE INSPECTOR, SQUAD NO.1, OFFICE OF THE INSPECING ASSISTANT COMMISSIONER (INTELLIGENCE), COMMERCIAL TAXES, KOLLAM-691 001. BY G.P. SRI. C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06/10/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.30520 of 2010 ------------------------------------------- Dated this the 6th day of October, 2010 J U D G M E N T ---------------------- Proceedings initiated under Section 47(2) of the Kerala Value Added Tax Act, 2003 (KVAT Act), on the basis of Ext.P5 notice, is under challenge in this writ petition. An Excavator (Tata Hitachi made) transported in a heavy vehicle bearing No:TN-04/M 2259 (Taurus Lorry) was intercepted by the 2nd respondent for the reason that no document such as tax invoice, departmental delivery note, certificate of ownership, etc. as required under the KVAT were was not accompanying with the transport. It was also noticed that inspite of the goods being brought from the state of Tamil Nadu the document which was accompanying the transport does not reveal any indication to the effect that the goods were declared at the border check post at Aryankavu. Even though it is claimed that the W.P.(C).30520/10-L -2- Excavator in question was brought for hire in execution of a work undertaken in Kerala, no rental agreement or work agreement was accompanied with the transport. Subsequent to the detention, the petitioner produced certain documents and after perusal of those documents the authority found that the alleged rental agreement as well as lease deed are not genuine and it could not be concluded that the machinery was brought in pursuance to those agreements. Under such circumstances payment of security was demanded. 2. According to the petitioners, the 1st petitioner is the owner of the Excavator and 2nd petitioner is the owner of the lorry in which it was transported. Case of the petitioners is that 1st petitioner by virtue of a lease deed had hired the machinery to one Sri.K.Abhilash, who in turn had entered into an agreement with a PWD Contractor to hire the machinery for executing certain civil works. It is contended that the transport was bonafide and the machinery was not intended for sale within the state of W.P.(C).30520/10-L -3- Kerala. 3. Heard, learned Government Pleader appearing for respondents. It is pointed out that none of the documents required under the KVAT Act was accompanying the transport. It is further stated that even assuming that the machinery was brought for execution of any contract work, there is liability for payment of tax. Further, it was contended that the documents produced, such as the lease deed and the hire agreement are evidently concocted. 4. Having considered the rival contentions, I am of the view that the question as to whether there was any attempt in evasion of payment of tax is a matter which need be decided on finalising the enquiry. I take notice that both the petitioners are not registered dealers within the state of Kerala. Under such circumstances I am of the opinion that pending finalisation of the enquiry the detained goods can be released on the petitioners furnishing proper security. 5. In the result the writ petition is disposed of directing the respondents to release the Excavator as well W.P.(C).30520/10-L -4- as the vehicle in which the same is carried, on the petitioners furnishing either the Bank Guarantee or security as provided under Rule 19(2) of the KVAT Rules to the satisfaction of the 2nd respondent, for the value of security deposit demanded under Ext.P5. 6. The competent Enquiry Officer is directed to finalise the enquiry at the earliest possible, after affording an opportunity of hearing to the petitioners, at any rate within a period of six weeks from the date of release of the goods. C.K.ABDUL REHIM, JUDGE. okb