IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 8TH SEPTEMBER 2009 / 17TH BHADRA 1931 WP(C).No. 25389 of 2009(P) -------------------------- PETITIONER: ------------------ MESSRS. ESCON ELEVATORS PRIVATE LIMITED, E1-116/2, ELECTRONIC ZONE, TTC, MAHAPE, NAVI MUMBAI 400 710 ALSO HAVING ITS OFFICE AT 41/1164-C SECOND FLOOR, ARANGATH BUILDING, ARANGATH ROAD, KOCHI 682 018 BY ADV. SRI.A.KUMAR RESPONDENT: ------------------- THE COMMERCIAL TAX INSPECTOR, COMMERCIAL TAX CHECKPOST, BANGARA, MANJESHWAR. BY GOVERNMENT PLEADER SRI. C.K. GOVINDAN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08/09/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: app/- C.K.ABDUL REHIM, J - - - - - - - - - - - - - - - - - - - - - W.P.(C) No.25389 of 2009 - - - - - - - - - - - - - - - - - - - - - - - Dated this the 8th day of September, 2009 J U D G M E N T 1. The petitioner is engaged in manufacture and installation of elevators having its factory at Maharashtra and he is a registered dealer under the Local Sales Tax Act and Central Sales Tax Act in Maharashtra state. The petitioner was awarded with contract for replacement of three numbers of lifts at the Naval Base, Kochi as evidenced by Ext.P1 and P2. It is evident from Ext.P3 that the authorities of the Naval Base had conducted inspection of the Elevators to be installed at their site and issued Ext.P5 certificate in which it is stated that the petitioner will be transporting the equipments from the factory at Mumbai to the Naval Base at Kochi for execution of the above mentioned work. The petitioner had transported three numbers of elevators under two invoices as per Exts.P4 and P4(a), drawn in the name of the Garison Engineer, Military W.P.(C) No.25389 of 2009 2 Engineering Services, Naval Base, Kochi. The goods were transported under Ext.P6 and P6(a) way bills. But the transport was inspected at the sales tax check post and Exts.P7 and P7(a) notice were issued. The reason for detention is that the petitioner was awarded with contract for replacement of three numbers of lifts at Naval Base, Kochi, but the consignor (petitioner) has not been registered under the KVAT Act as a works contractor. 2. Learned counsel for the petitioner had pointed out a decision of the Hon'ble Supreme Court in State of Andrapradesh Vs.Kone Elevators (India) Ltd, 140 (2005) STC. 22. In the said decision the Hon'ble Supreme Court held that in a contract for supply and installation of lifts, even though the dealer is doing installation at the site, it can only be considered as a sale and not as a works contract. The learned Government Pleader submits that correctness of the above said decision was doubted in a subsequent case and the matter now stands referred for W.P.(C) No.25389 of 2009 3 consideration of a larger bench. On the alternative, learned counsel for the petitioner raised another contention that even assuming that it is a works contract, the transfer of property is goods takes place in the course of an inter state sale and therefore it is not exigible to tax within the state. In support of the above contention, the petitioner had pointed out a decision of this court in Maestro Cooling Towers Vs. State of Kerala 102 (1996) STC 617. 3. Having considered the rival contention, I am of the opinion that the detention merely on the ground that the consignor is not a registered dealer is not at all legally tenable. But the question whether there is any attempt at evasion of payment of tax need be decided after adjudication as contemplated under section 47(2) of KVAT Act. However, considering the proviso to section 47(2), I feel that release of the goods can be ordered pending finalisation of the adjudication, on the petitioner providing adequate security. W.P.(C) No.25389 of 2009 4 4. Under the above circumstances, the writ petition is disposed of directing the respondent to release the goods detained under Ext.P3 and P3(a) on the petitioner furnishing security bond as provided under the KVAT Rules for the amount mentioned in Ext.P7 and P7(a), without sureties. It is further directed the competent authority under section 47(2) of the Act will expedite the adjudication and shall pass final orders after affording an opportunity of hearing to the petitioner as early as possible, at any rate within a period of one month from the date of release of the goods. C.K.ABDUL REHIM, JUDGE. app/-