IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 18TH NOVEMBER 2009 / 27TH KARTHIKA 1931 WP(C).No. 33175 of 2009(N) -------------------------- PETITIONER(S): --------------- CORDIAL COMPANY, NARAYANA BHAVAN, KURUP'S LANE, SASTHAMANGALAM, THIRUVANANTHAPURAM REPRESENTED BY ITS PARTNER SRI. AYYAPPAN UNNITHAN. BY ADVS. SRI.S.ANIL KUMAR SRI.K.S.HARIHARAN RESPONDENT(S): --------------- 1. COMMERCIAL TAX INSPECTOR, COMMERCIAL TAX CHECK-POST, THAMARASSERY, KOZHIKODE DISTRICT. 2. COMMERCIAL TAX OFFICER (WORKS CONTRACT), THIRUVANANTHAPURAM BY GOVERNMENT PLEADER SRI. C.K. GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18/11/2009 , THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: shg/ C.K. ABDUL REHIM, J. - - - - - - - - - - - - - - - - - - - - - - - W.P.(C)No. 33175 of 2009 - - - - - - - - - - - - - - - - - - - - - - - Dated this the 18th day of November, 2009 J U D G M E N T 1. Petitioner is a registered dealer, who is a Works Contractor. Challenge is against detention of transport of 'Elevator Components', on issuing Exts.P2 & P3 notices under Section 47 (2) of the KVAT Act, by the 1st respondent. According to the petitioner the elevator components were purchased from a dealer at Maharashtra on payment of full rate of tax at 12.5%. The goods are transported for own use for erecting in a building which is under construction, in a declared project of the petitioner. The transport was accompanied by the invoice. It is submitted that the goods were already cleared from the boarder check post and the interception enroute was without any valid reasons. 2. In Ext.P2 the reason for detention stated is that, the Advance Tax was not paid at the border Check Post and hence attempt at evasion of payment of tax was suspected. W.P.(C)No. 33175 of 2009 -2- But in the revised notice issued under Ext.P3, a further allegation is incorporated to the effect that the goods in question is not included in the Registration Certificate of the petitioner. According to the learned counsel appearing for the petitioner, the inter state purchase was effected not on the payment of any concessional rate of Central Sales Tax, against issuance of 'C Form'. However the 1st respondent had issued a reply to the explanation submitted by the petitioner, as evidenced by Ext.P5, stating that since the item under transport is included in the registration subsequent to the detention, the petitioner is not entitled to transport such goods. 3. The question whether there was any attempt at evasion of payment of tax is the matter which need be decided on finalisation of the adjudication proceedings. I am of the opinion that, pending finalisation of the proceedings the goods detained can be released on the petitioner furnishing proper security. 4. Therefore the 1st respondent is directed to release W.P.(C)No. 33175 of 2009 -3- the goods along with the vehicle, detained under Ext.P2 & P3 notices, on the petitioner remitting 50% of the amount demanded therein towards Advance Tax. It is made clear that the payment of the Advance Tax is without prejudice to completion of the enquiry contemplated under Section 47 (5) & (6) and without prejudice to imposition of penalty if ultimately found liable. The petitioner shall also furnish Security Bond without sureties in the form prescribed under the KVAT Rules for the balance amount. 5. The competent authority under Section 47 is hereby directed to complete the adjudication proceedings after affording opportunity to the petitioner, as early as possible, at any rate within a period of two months from the date of release of such goods. C.K. ABDUL REHIM JUDGE shg/