IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 27TH OCTOBER 2009 / 5TH KARTHIKA 1931 WP(C).No. 30378 of 2009(N) -------------------------- PETITIONER(S): --------------- JOBY THOMAS, S/O.M.T.THOMAS, PROPRIETOR, MUTHOOTTIL TRADERS, KIDANGOOR, KOTTAYAM. BY ADV. SRI.C.K.SREEJITH RESPONDENT(S): --------------- 1. THE INTELLIGENCE INSPECTOR, INTELLIGENCE SQUAD NO.IV, DEPARTMENT OF COMMERCIAL TAXES, GOVERNMENT OF KERALA, ERNAKULAM. 2. THE INTELLIGENCE OFFICER, INTELLIGENCE SQUAD NO.IV, DEPARTMENT OF COMMERCIAL TAXES, GOVERNMENT OF KERALA, ERNAKULAM. 3. THE COMMERCIAL TAX OFFICER, COMMERCIAL TAX CHECK POST, WALAYAR. 4. THE INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAX CHECK POST, WALAYAR. 5. GOVERNMENT OF KERALA REPRESENTED BY THE COMMISSIONER OF COMMERCIAL TAXES, THIRUVANANTHAPURAM. GOVERNMENT PLEADER SRI.C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 27/10/2009, ALONG WITH WP(C).30379 OF 2009 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K.ABDUL REHIM, J. ------------------------------ W.P.(C).No.30378 Of 2009 And W.P.(C).No.30379 Of 2009 ------------------------------ Dated this the 27th day of October, 2009 J U D G M E N T ---------------------- 1. The petitioners in these cases are registered dealers engaged in the business of Marble and Granite. The petitioners are aggrieved by detention of transport of polished Granite slabs, purchased inter-state. The transports are detained by the 1st respondent on issuing Ext.P6 and P7 notices in WP(C).30378/09 and Ext.P4 and P5 notices in WP(C).30379/09 respectively under Section 47(2) and Section 69(1) of the Kerala Value Added Tax Act, 2003 (KVAT Act) Act. The reason for detention alleged is that on physical verification of the goods the authority found considerable difference in the quantity of Granite slabs and the value shown in the documents accompanying the transport is not the reasonable market value. Therefore the petitioners were issued with notices under Section 47(2) of the Act demanding security deposit to the tune of double the amount of tax due on the value of the difference quantity estimated on the basis of value adopted. Further, notices under Section 69(1) of the Act was also issued against the respective owners of the vehicles, alleging that they have transported excess quantity of Granite W.P.(C).30378/09 & 30379/09 2 slabs without proper documents, as prescribed under Section 46(3) of the KVAT Act. 2. According to the petitioners no proper measurement was conducted in order to ascertain the exact quantity of Granites and the allegations regarding excess quantity is not true and correct. It is further contended that the valuation shown in the invoices is the true value for which purchases were effected, and the question regarding liability for payment of tax will arise only when subsequent sale is effected. No action under Section 47 can be initiated with respect to a transport which does not attract any incidence of taxation, is the contention. Therefore proceedings under Section 47 cannot be sustained on the allegation that the valuation shown is low with respect to the inter-state purchases effected. 3. Having considered facts and circumstances of the case and contentions of parties, I am of the opinion that the question whether there was any attempt at evasion of payment of tax is a matter which need be decided on finalisation of adjudication, contemplated under Section 47. Since the petitioners are seriously disputing correctness of the measurement relating to the goods, it is only just and proper to have physical verification and to conduct measurement by the competent authority under Section 47(6) who is adjudicating the W.P.(C).30378/09 & 30379/09 3 matter, in the presence of the petitioner, if necessary with the assistance of any expert, at the expense of the petitioner. 4. In the result the 2nd respondent is directed to conduct a physical verification and measurement of the goods in the presence of the petitioner, if necessary with the aid of an expert, at the expense of the petitioner. Such verification shall be done within a period of 3 (three) days from the date of receipt of a copy of this judgment. The 2nd respondent shall finalise the adjudication contemplated under Section 47(5) and (6), on completion of such verification based on the result of measurement, without any further delay, at any rate on the next day of such verification and measurement, and proceedings shall be issued under Section 47 and Section 69 of the KVAT Act. The petitioners shall pay the amount if any imposed on the basis of the final orders to be issued on completion of such verification, and the vehicle along with the goods shall be released thereon forthwith on such payment. It is also made clear that further proceedings for imposition of penalty under Section 69(1) will be dependent on the decision taken in this regard. C.K.ABDUL REHIM, JUDGE. okb