IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON WEDNESDAY, THE 7TH JULY 2010 / 16TH ASHADHA 1932 WP(C).No. 19474 of 2010(H) -------------------------- PETITIONER: --------------- WIPRO GE HEALTHCARE PVT.LTD., REGD.OFFICE: A-1, GOLDEN ENCLAVE, AIRPORT ROAD, BANGALORE, WARE HOUSE 40/2, SEDARAPET ROAD, THONDAMANATHAM, PONDICHERRY. BY ADV. SRI.A.KUMAR RESPONDENTS: --------------- THE COMMERCIAL TAX INSPECTOR, COMMERCIAL TAX CHECKPOST, KUMILY, IDUKKI DIST. *ADDL.R2. M/S. TRAVANCORE SCAN DIAGNOSTIC CENTRE, OPP. MUNICIPAL STADIUM, COLLEGE ROAD, PATHANAMTHITTA – 689 645. (*ADDL. R2 IS IMPLEADED AS PER ORDER ON I.A.No. 8563 of 2010 DATED 25.06.2010.) R1 BY GOVERNMENT PLEADER ADV. MR. V.K. SHAMSUDEEN. R2 BY ADV. SRI.JAIRAM.V.MENON THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07/07/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R. RAMACHANDRA MENON, J. .............................................................................. W.P.(C) No. 19474 OF 2010 ......................................................................... Dated this the 7th July , 2010 J U D G M E N T The petitioner, who is engaged in the manufacture and sale of various diagnostic systems and allied equipments, having registered office at Bangalore and other regional offices in other places including Pondicherry as well as in Kerala as borne by Exts. P1/P1(a) certificates of registration, on receipt of a purchase order from the Addl. Second respondent (who is not a dealer), transported a scanning machine to be supplied at the doors of the Addl. Second respondent on the strength of Ext. P2 invoice. When it was being taken in the vehicle bearing No. TN- 20AK/2499, it was intercepted on 15.06.2010 issuing Ext. P6 notice under Section 47(2) of the KVAT Act, doubting evasion of tax and demanding security deposit to the extent specified therein. 2. On explaining the position as to the true state of affairs, the respondents chose to issue a revised notice as borne by Ext. P7, still maintaining the stand that the petitioner had to satisfy the security deposit, in view of the alleged discrepancy. Even W.P.(C) No. 19474 OF 2010 2 though Exts. P8, P8(a) and P9 representations/explanations were filed, the same did not yield any positive result, which made the petitioner to approach this Court by filing this Writ Petition for immediate interference . 3. The insinuating circumstances noted against transportation of materials are given below: “Wipro GE Healthcare, Bangalore sold a CT Scanner and accessories to Travancore MRI scans laboratory Pathanamthitta. As per the invoice the consignor collected CST @ 2% and attached the certificate of ownership, for the transportation. The above consignor has availed concessional rate against C form. A registered dealer with CST registration can provide C forms. But there is no evidence to prove that, whether the consignee is a registered dealer CST dealer or not. Hence the evasion of tad suspected. SD demanded.” The course and explanation offered from the part of the parties concerned vide Exts.P8, P8(a) and P9 are given below: “A. The invoice has been raised from Wipro GE W.P.(C) No. 19474 OF 2010 3 Healthcare, Pondicherry and goods moved from Wipro GE Healthcare, Puducherry. B. TIN number mentioned in the invoice is the TIN number of Wipro GE Healthcare, Puducherry under Puducherry VAT Act. Copy of the registration certificate enclosed. C. Rate of tax for Medical equipments in Puducherry has been reduced from 4% to 2%. Hence CST rate without C form is also 2%. Copy of the notification enclosed. D. The Bangalore address mentioned in the invoice only shows the registered office of the company, invoice specifically states the goods are despatched from Puducherry warehouse. E. The purchase of the equipment is for own use at its Diagnostic centre at Pathanamthitta. Form 16 already accompanied with the equipment. “ 4. Heard the learned Government Pleader as well 5. The learned Counsel appearing for the petitioner submits that the entire proceedings have been issued, causing detention of the vehicle as well as the goods by the respondents totally on a misconception as to the factual and legal position. It is W.P.(C) No. 19474 OF 2010 4 contended that the respondents are under the impression that, since the tax collected is only at the rate of 2%, the consignee has purchased the same availing the 'concessional rate of tax'. Since the consignee is not a registered dealer, the declaration filed in Form 16 stating that it is for 'own use' does not tally with the contents of other documents and hence evasion of tax is doubted. It is also stated that by virtue of having the registered office at Bangalore, as given at the top of Ext. P2 invoice, the respondents had to doubt the evasion of tax, the goods having been despatched from Puducherry. 6. With reference to the materials on record, including the additional documents produced and marked as Ext. P10 to P15 along with I.A.No. 9223 of 2010, the learned Counsel for the petitioner submits that the rate of tax sought to be realised from the consignee at 2% is not by way of 'concessional rate of tax' but the 'original rate of tax' as payable in the State of Pondicherry, the same having been reduced from 4% to 2% by virtue of relevant notification issued in this regard. The correctness of the said submission is however sought to be W.P.(C) No. 19474 OF 2010 5 rebutted by the learned Government Pleader stating that this is a fact which requires to be considered and established in the course of adjudication. 7. With regard to the discrepancy as to the place of registration and the place of despatch, the learned Counsel for the petitioner submits that the actual position is very much discernible from Ext. P2 invoice itself; wherein the registered office is given at the top, ie., 'Bangalore', while the place of despatch is clearly given at the bottom as from 'Puducherry'. The learned Counsel further submits that such a course was being pursued in the matter of preparation and issuance of invoice, by virtue of the centralised pattern of invoice available in the Southern States of India, though such a course has been changed in Kerala, pursuant to which, the petitioner has also now changed the pattern . It is also brought to the notice of this Court that the actual 'TIN' is clearly given in Ext. P2 and that similar course is very much discernible from other documents produced and marked as Exts. P10 to P15 along with I.A.No.9223 of 2010. Referring to the contents of Ext. P15, the W.P.(C) No. 19474 OF 2010 6 learned Counsel further submits that the tax realised from the petitioner is only at the rate of 2%, which by itself shows that it is the actual rate of tax available in the concerned State and not the concessional rate of tax. The learned Counsel explains that Ext. P4 delivery note has been issued from 'Puducherry' and it is in the particular form as prevailing in the State of Pondicherry, which includes the instance of sale as well, as obvious therefrom. The factum of sale by the petitioner/consignor and the factum of 'own use' to be made by the consignee, (who is not a registered dealer and who placed the order for 'own use') are very much revealed from the materials on record, submits the learned Counsel. 8. Considering the facts and circumstances, this Court finds that there is considerable force in the submissions made from the part of the petitioner. However, as submitted by the learned Government Pleader, this is a matter which requires to be finalised in the course of adjudication proceedings, in view of issuance of notice under Section 47(2) and the turn of events including the actual rate of tax. But, for that reason, this Court W.P.(C) No. 19474 OF 2010 7 does not find it necessary to detain the goods as well as the vehicle any further and the same shall be released to the petitioner forthwith, on condition that the petitioner executes a 'simple bond' for the amount demanded as security deposit in Ext. P7 notice. This will be without prejudice to the rights of the respondents to pursue the adjudication proceedings, which exercise shall be finalised in accordance with law as expeditiously as possible, at any rate, within a period of two months from the date of receipt of a copy of the judgment. The Writ Petition is disposed of. P.R. RAMACHANDRA MENON, JUDGE. lk