IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN THURSDAY, THE 1ST SEPTEMBER 2011 / 10TH BHADRA 1933 WA.No. 1294 of 2011() --------------------- AGAINST THE JUDGEMENT IN WPC.23294/2011 Dated 29/08/2011 .................... APPELLANT/PETITIONER: -------------- V.N.PAVITHRAN, MEGHA GRANITES, CHEENIKKUZHY, N.MAZHUVANNUR. BY ADV. SRI.C.K.KARUNAKARAN SMT.T.P.LEKSHMI VARMA SRI.V.VINAY RESPONDENTS/RESPONDENTS: --------------- 1. COMMERCIAL TAX INSPECTOR, COMMERCIAL TAX CHECK POST, WALAYAR-678 624. 2. COMMISSIONER OF COMMERCIAL TAXES, PUBLIC OFFICE BUILDING, VIKAS BHAVAN P.O., TRIVANDRUM-693 033. BY G.P. SRI.MOHAMMED RAFEEQ THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 01/09/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX ANNEXURE A1: TRUE COPY OF APPLICATION DT.3.11.2010 MADE TO THE POLLUTION CONTROL BOARD. ANNEXURE A2: TRUE COPY OF CONSENT TO ESTABLISH DT.31.1.2011 RECEIVED FROM THE POLLUTION CONTROL BOARD. ANNEXURE A3: TRUE COPY OF APPLICATION DT.2.2.2011 MADE TO GRAMA PANCHAYAT. ANNEXURE A4: TRUE COPY OF LICENSE DT.14.3.2011 GRANTED BY LOCAL AUTHORITY. ANNEXURE A5: TRUE COPY OF ORDER DT.4.5.2011 PERMITTING EVICTION OF MACHINERY. ANNEXURE A6: TRUE COPY OF SANCTION DT.26.7.2011 ISSUED BY KSEB. ANNEXURE A7A: TRUE COPY OF INVOICE NO.PS1/1-11/11/00359 DT.31.3.2011 TOGETHER WITH DOCUMENTS CLEARED BY 1ST RESPONDENT. ANNEXURE A7B: TRUE COPY OF INVOICE NO.PS1/1-11/11/00374 DT.31.3.2011 TOGETHER WITH DOCUMENTS CLEARED THROUGH VAZHIKADAVU CHECK POST. ANNEXURE A7C: TRUE COPY OF INVOICE NO.PS1/1-11/11/00168 DT.17.8.2011 TOGETHER WITH DOCUMENTS CLEARED THROUGH MUTHANGA CHECK POST. ANNEXURE A8: TRUE COPY OF PHOTOGRAPHS SHOWING MACHINERY AT PETITIONER'S SITE. ANNEXURE A9: TRUE COPY OF RDER NO.32151338515/2011-12 DT.27.5.2011. ANNEXURE A10: TRUE COPY OF BHP INFRASTRUCTURE INVOICE NO.PS1/11-12/00161 DT.9.8.2011 IN THE CASE OF PARACKAL ROCK PRODUCTS. ANNEXURE A11: TRUE COPY OF BHP INFRASTRUCTURE LETTER DT.23.8.2011 ADDRESSED TO 1ST RESPONDENT. TRUE COPY P.S. TO JUDGE C.N.RAMACHANDRAN NAIR & P.S.GOPINATHAN, JJ. .................................................................... Writ Appeal No.1294 of 2011 .................................................................... Dated this the 1st day of September, 2011. JUDGMENT Ramachandran Nair, J. The only grievance of the appellant is that the learned Single Judge directed release of detained goods only on furnishing Bank Guarantee along with the bond executed by the appellant for the security amount. We have heard counsel for the appellant and Government Pleader for the respondent. 2. The consignment was initially detained and notice was issued to the appellant stating that the appellant was not entitled to make interstate purchase of machinery availing concessional rate of tax. However, when the appellant produced certificate from the Assessing Officer stating his entitlement for making interstate purchase, the detaining authority issued another notice stating that the supplier of the machinery has liability for works contract as the contract involves supply, erection and commissioning of machinery at site of the appellant in the State. The appellant has challenged the second notice W.A. 1294/2011 2 issued by the detaining authority. The learned Single Judge held that all contentions can be raised in adjudication and goods were ordered to be released only on furnishing Bank Guarantee. 3. Government Pleader submitted that if Bank Guarantee is not furnished, bond will be without security. Even though we find force in this contention, what we notice is that appellant is a registered dealer and the machinery value is such that in the event of levy of penalty, there will not be any difficulty for the department to recover the tax by attachment and sale of the machinery. Further, we feel it would be better that the liability for tax on works contract for the supplier also should be considered by the Assessing Officer before whom appellant is registered. Writ Appeal is disposed of modifying the judgment of the learned Single Judge as follows: The appellant will furnish a personal bond undertaking to pay the penalty, if any levied on him, and or tax or penalty or both, if any levied on the manufacturer/supplier as their agent in Kerala. In the bond so executed appellant should also undertake to produce contract and arrange for appearance for the manufacturer/supplier as their agent W.A. 1294/2011 3 in the State in adjudication proceeding. First respondent is directed to release the goods on the appellant producing the bond in stamp paper as above and along with it copy of the certificate of registration issued to the appellant under the KVAT Act. On receipt of bond as above along with copy of judgment, the first respondent will send the file to the Assessing Officer before whom appellant is registered for him to conduct enquiry, issue notice and for completion of adjudication including adjudication on tax liability of the manufacturer, if any, found liable. C.N.RAMACHANDRAN NAIR Judge P.S.GOPINATHAN Judge pms