IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 28TH OCTOBER 2010 / 6TH KARTHIKA 1932 WP(C).No. 32805 of 2010(A) --------------------------------- PETITIONER(S): ------------------- A&P BUILDERS AND ENGINEERING CONTRACTORS PVT. LTD., 38/628A, A&P ARCADE, SAHODARAN AYYAPPAN ROAD, COCHIN-682016. BY ADV. SRI.A.KUMAR RESPONDENT(S): ------------------- THE INTELLIGENCE INSPECTOR, SQUAD NO.IV, DEPT. OF COMMERCIAL TAXES, ERNAKULAM-16. R1 BY GOVT.PLEADER SRI.C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 28/10/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: SVS/ C.K. ABDUL REHIM, J ------------------------------ WP(C) NO. 32805 OF 2010 ------------------------------------ Dated this the 28th day of October, 2010 JUDGMENT Petitioner is aggrieved by detention of machineries (capital equipments) transported from Cochin Port to their work site at Thiruvananthapuram. The goods in question are imported by the petitioner at the coastal port of Cochin. Various documents revealing import of the goods such as, Bill of Entry, Commercial Invoice etc. were accompanying with the transport. Further, the transport was effected on the strength of Departmental Delivery Note and Form No. 8 F A Declaration. 2. On interception, Ext.P5 notice was issued under Section 47 (2) of the Kerala Value Added Tax Act, 2003 (KVAT Act). The reasons for detention was mainly on the ground that, the items under transport are not covered by the registration certificate of the petitioner, and further that the description of goods in the delivery note was not 2 WP(C) No. 32805/2010 fully tallying with the items under transport. It is also mentioned that on verification from the KVATIS it was revealed that the petitioner is authorised only for local purchase/inter state purchase/works contract of 'cement' alone, and no import of any other items was seen authorised by the assessing authority. 3. Sri.A.Kumar, learned counsel appearing for the petitioner contended that there is ample documents to prove that the goods in transport were imported from outside the country by the petitioner, and it was transported only to its work site. It is also evident that the goods are capital equipments which is to be used in execution of works undertaken by the petitioner with M/s. Thiruvananthapuram Road Development Company Ltd. for the contract which is being executed under the Infrastructure Development Projects of the Kerala Road Fund Board. Petitioner also points out a Division Bench 3 WP(C) No. 32805/2010 decision of this Court in ST Rev. No. 88/2010, wherein it is held that all the documents required under the statute could not be insisted in a case of transport of capital equipments. Therefore the petitioner seeks direction for release of the goods. 4. Learned Government Pleader appearing on behalf of the respondents contended that there was no documents accompanied with the transport evidencing that the equipments are for own use of the petitioner. It is further contended that the petitioner was not authorised to import goods and there was no intimation submitted to the assessing authority with respect to purchase of any capital equipments. 5. I am not proposing to enter upon any findings with respect to the disputed question as to whether there was any attempt in evasion of payment of tax. It is a matter to be decided on finalising the enquiry. But pending 4 WP(C) No. 32805/2010 disposal of the enquiry proceedings, I am of the opinion that the goods can be released to the petitioner on furnishing proper security. It is noticed that the petitioner is a registered dealer who is regularly paying tax. 6. Under the above circumstances, the Writ Petition is disposed of directing the first respondent to release the goods along with the vehicle detained under Ext.P5 notice, on the petitioner furnishing Security Bond in the form prescribed under the KVAT Rules, without sureties. 7. It is made clear that the respondents will be at liberty to issue proceedings to the awarder of the work in question, stated to have been undertaken by the petitioner, restraining them from payment of an amount equivalent to the security deposit demanded under Ext.P5, out of the final bill of the contract on completion of the work, pending disposal of the enquiry proceedings under Section 47, if it thinks necessary to impose such a restriction. 5 WP(C) No. 32805/2010 8. The competent authority under Section 47 is directed to finalise the enquiry after affording an opportunity of hearing to the petitioner at the earliest possible, at any rate within a period of six weeks from the date of release of the goods. C.K. ABDUL REHIM JUDGE dnc