IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH TUESDAY, THE 21ST OCTOBER 2008 / 29TH ASWINA 1930 WP(C).No. 29826 of 2008(A) ---------------------------------------------- PETITIONER(S): --------------------- M/S.ACTION CONSTRUCTION EQUIPMENT LTD., 3RD FLOOR, PEEGEE'S MALL, OPP.MEDICAL TRUST HOSPITAL, PALLIMUKKU JUNCTION, M.G.ROAD, ERNAKULAM KOCHI - 682 016 REPRESENTED BY ITS AUTHORISED SIGNATORY RENJITH.K. ZACHARIAH. BY ADV. SRI.A.KUMAR RESPONDENT(S): ------------------------- 1. THE INTELLIGENCE INSPECTOR, SQUAD NO.IV, COMMERCIAL TAXES, THIRUVANANTHAPURAM. 2. THE ASST.COMMISSIONER (ASSESSMENT), COMMERCIAL TAXES, SPECIAL CIRCLE II, ERNAKULAM. BY GOVERNMENT PLEADER SHRI C.K. GOVINDAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 21/10/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX IN W.P.(C).NO.29826 OF 2008 A PETITIONER'S EXHIBITS: EXT.P1TRUE COPY OF REGISTRATION CERTIFICATE ISSUED BY THE SECOND RESPONDENT DATED 7.2.2008. EXT.P2TRUE COPY OF PURCHASE ORDER DATED 6.6.2008. EXT.P3TRUE COPY OF THE TAX INVOICE DATED 3.10.2008. EXT.P4TRUE COPY OF THE NOTICE DATED 3.10.2008. EXT.P5TRUE COPY OF THE REPLY DATED 4.10.2008. EXT.P6TRUE COPY OF COMMUNICATION OF FIRST RESPONDENT DATED 7.10.2008. EXT.P7TRUE COPY OF THE COMMUNICATION DATED 7.10.2008 SENT BY THE PETITIONER. EXT.P8TRUE COPY OF THE ACKNOWLEDGMENT BY THE RESPONDENT OF HAVING RECEIVED THE PETITIONER'S COMMUNICATION ON 10.10.2008. EXT.P9TRUE COPY OF THE COMMUNICATION OF THE RESPONDENT DATED 10.10.2008. RESPONDENTS' EXHIBITS: NIL. // True Copy // PS to Judge K. M. JOSEPH, J. -------------------------------------- W.P.C. NO. 29826 OF 2008 A -------------------------------------- Dated this the 21st October, 2008 JUDGMENT Petitioner challenges Ext.P4. After amendment of the Writ Petition, petitioner also challenges Exts. P6 and P9. Ext.P4 is a notice issued under Section 47(2) of the Kerala Value Added Tax Act, 2003 calling upon the petitioner to give security. The reason stated is as follows: “The goods intercepted at Attingal in Trivandrum Dist. whereas the bill is raised from Cochin to a Company at Cochin itself. Hence it is suspected that the goods are for resale without raising any bill to Thiruvananthapuram” 2. Briefly put, the case of the petitioner is as follows: Pursuant to Ext.P2 purchase order by M/s. Cherian Varkey Construction Co.(P) Ltd., which is also a registered dealer under the KVAT Act and CST Act on the rolls of the second respondent, the petitioner transported the goods in question to Thiruvananthapuram. This was done on the basis of the WPC.29826/08 A 2 conditions in the purchase order, namely Clause Nos.17 and 22. Clause 17 provides for Rs.1 Lakh extra for Tower Crane as transport cost while the transport cost for Prime Mover is Rs.35,000/= extra. The delivery was to be effected under Clause 22, to the purchaser at the following address: “M/s. Cherian Varkey Construction Co.Pvt.Ltd., Wind Tunnel, building site, TERLS, Canal Gate, South Thumba, Trivandrum: Contact person Mr. Muralidharan, Cell: 98470 59336, 996148036 + 91 471 6539084” Clause 19 of Ext.P2 purchase order provided that free installation has to be made by the petitioner at the project site. Ext. P3 is the Invoice. 3. There was an interim order passed by this Court directing consideration of Ext.P5 which is the objection filed by the petitioner to Ext.P4 notice. Ext.P6 reiterates that the documents prescribed under Section 47(2) did not accompany. Petitioner filed Ext.P7 which was acknowledged under Ext.P8 and thereafter, Ext.P9 came to be passed referring to the interim order passed by this Court and Ext.P7. In Ext.P9 there are three WPC.29826/08 A 3 reasons stated: One is that the documents required under Section 47(2) did not accompany the transport from Ernakulam to Thiruvananthapuram. Further, it was stated that it is mandatory under Section 39 of the Motor Vehicles Act to register all vehicles moving out of the first dealer's jurisdiction and it has not been registered on its way to Thiruvananthapuram. Lastly, it is stated that the accompanying Invoice which does not relate to the goods under transport is also not machine numbered as stipulated in the KVAT Rules. 4. I heard Shri A. Kumar, learned counsel for the petitioner and also the learned Government Pleader. Shri A. Kumar would point out that while it may be true that the Delivery Note should have also been accompanied the goods and also it is true that the Invoice did not specify the destination as Thiruvnanthapuram, within a day, the Delivery Note itself was produced. The purchase order was also produced, it is stated. He further contends that there is no merit at all in the reason stated in Ext.P9 that it was not registered and it is not a matter which should have detained the Officer in proceeding WPC.29826/08 A 4 under the Act. He also relied on a Judgment of this Court in STR No.181 of 2004 for contending that the petitioner had given its explanation as to the true state of affairs including production of the purchase order and also the Delivery Note. He submits that it was a case which could have been dealt with under either of the provisos to Section 47(2). He also expresses the willingness of the petitioner to pay the tax which is already collected in advance. He also points out the circumstance that the goods were hypothecated to the HDFC Bank. Learned Government Pleader, of course, per contra, points out that there cannot be any manner of doubt that the goods as prescribed under Section 47(2) did not accompany the consignment. 5. Having considered the totality of facts, I feel that the goods should be directed to be released to the petitioner immediately upon the petitioner paying fifty per cent of the amount demanded and furnishing a simple self-Bond without sureties for the balance and further, there should be a direction that the adjudication should be completed by the concerned authority within a period of three weeks from the date of receipt WPC.29826/08 A 5 of a copy of this Judgment. Accordingly, the Writ Petition is disposed of as follows; Exts.P6 and P9 are modified. There will be a direction to the first respondent to release the goods covered by Ext.P4 upon the petitioner deposing fifty per cent of the amount demanded vide Ext.P4 and furnishing simple self-bond without sureties for the balance amount. The concerned authority will complete the adjudication within a period of three weeks from the date of receipt of a copy of this Judgment. If the petitioner succeeds before the Authority, the amount deposited will be adjusted towards the tax payable by the petitioner. Sd/= K. M. JOSEPH, JUDGE kbk. // True Copy // PS to Judge