IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH TUESDAY, THE 24TH JUNE 2008 / 3RD ASHADHA 1930 WP(C).No. 17961 of 2008(L) -------------------------- PETITIONER: ------------ MANU MATHEW, KAIPALLIL HOUSE, ELAPPARA, IDUKKI DISTRICT. BY ADV. SRI.C.K.THANU PILLAI RESPONDENTS: ------------- 1. THE INTELLIEGENCE OFFICER, SQUAD NO.1, COMMERCIAL TAXES, KATTAPPANA AT IDUKKI DISTRICT. 2. THE CIRCLE INSPECTOR OF POLICE, NEDUMKANDOM, IDUKKI DISTRICT. 3. THE INSPECTING ASSISTANT COMMISSIONER, (INTELLIGENCE), COMMERCIAL TAXES, KATTAPANA AT IDUKKI DISTRICT. 4. THE STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM -1. BY GOVERNMENT PLEADER ADV.SRI.C.K.GOVINDAN FOR R1-4 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24/06/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.M. JOSEPH, J. ```````````````````````````````````````````````````` W.P.(C) No. 17961 OF 2008 L ```````````````````````````````````````````````````` Dated this the 24th day of June, 2008 J U D G M E N T Petitioner seeks a writ of mandamus directing the 1st and 2nd respondents to release to the petitioner 84 bags of dried pepper seized by them on 13.6.2008. Case of the petitioner in brief is as follows. The petitioner has purchased dried pepper from the neighbouring agriculturists with the intention of selling it in the local market at Elappara and the business was started on 12.6.2008. He kept 84 bags of dried pepper weighing 60 kg each so purchased at his building No.13 in Ward No.2, Karunapuram Panchayat at Thookkupalam, Chottupara in Idukki district. The petitioner has maintained true and correct accounts for the above transactions. He has not taken registration under the Kerala Value Added Tax Act. He has not submitted application for registration as he has just started the business and the first purchase started only on 12.6.2008. On 13.6.2008 at 5.45 pm, the 2nd respondent, C.I. of Police, Nedumkandom, seized WPC.17961/08 : 2 : 84 bags of dried pepper from the place of business mentioned above, loaded it in a lorry and transported to Cumbummettu Check Post where he brought the 1st respondent and stored it at the Check Post. No Shop Inspection Report or mahazar was prepared and they have not issued any receipt for the goods or notice to the petitioner. The 2nd respondent has no jurisdiction to seize or detain the goods under the provisions of the KVAT Act. Under the provisions of section 165 of the Criminal Procedure Code, it is mandatory to prepare mahazar and proper receipts must be given for the goods detained. Under the provisions of section 44(4) of the KVAT Act, the detaining authority is bound to prepare mahazar. 2. A counter affidavit is filed on behalf of respondents 1 to 3. It is, inter alia, stated as follows: “ It is hereby submitted that at 17.45 Hrs on 13.6.2008, the second respondent informed the first respondent at Kattappana over his departmental mobile phone to reach 8 acre near Cumbummettu as he took custody of 84 bags of (60 Kgs each) dried pepper there without any documents. Accordingly the first respondent along with the third respondent WPC.17961/08 : 3 : at Nedumkandom reached on the spot at 18.30 Hrs. The second respondent prepared report and handed over the goods with report at State Boarder at 20.45 Hrs. A true copy of the said report is produced herewith and marked as Ext.R1(a).” 3. The substance of the report in Ext.R1(a) is as follows: “ On getting reliable information about the smuggling of dried pepper to Tamil Nadu through the bye-route of Commercial Taxes Check Post, Cumbummettu without any records the second respondent chased and reached at 8th Acre near Cumbummettu and there he found vehicle No.KL.5S 4492 coming from the mud road at 8th Acre and while the vehicle entering the Cumbummettu-Karunapuram main road, he showed sign to stop the vehicle, but instead of obeying the instruction, the driver drove the vehicle in high speed towards Karunapuram- Koottar route. As the above mentioned mud road ends within 100 mtr at Tamil Nadu forest, he went there and found 84 bags of dried pepper stored in two places there. As per the reliable information received to the police, the goods belonged to Sri.M.Kareem, Hill Produce dealer, Thookkupalam. The police officials found one Mr.Arun, S/o.Yohannan, Vadakkedathu House, WPC.17961/08 : 4 : Cumbummettu, Karunapuram village at the place where the goods found. He also confirmed that the goods belonged to the above mentioned Kareem. As there were no records available with the goods under transport and the same is transported with an intention of smuggling, the 2nd respondent took custody of the goods and handed over to the 1st respondent at the State Boarder for proceeding further on the subject.” It is further case of respondents 1 and 3 as follows. From the report of the police, it is clear that the vehicle KL.5S 4492 is used to smuggle the goods outside the State. Therefore, action under section 49(3) has been initiated against the owner of the vehicle. A detailed local enquiry was conducted and ascertained that the report regarding the owner of the goods and the vehicle is true as per Ext.R1(c). It is stated that 8th Acre is a place from where the goods smuggled into and out of the State. There is a pathway formed to unload goods from the vehicle and thereby the goods at Cumbummettu-Cumbum road. These goods will be loaded again in the same vehicle. Always only the empty WPC.17961/08 : 5 : vehicle passes through Commercial Taxes Check Post, Cumbummettu. The respondents have a case that Sri.Kareem used to transport pepper from other place to Cumbummettu using the departmental delivery note. If there is no enroute checking of departmental authority, he reduces the quantity and value of the goods in the departmental delivery note subsequently by marking slash (/-) between zeros. If he transported 5000 Kgs of pepper using a departmental delivery note and smuggled the same to outside the State, he reduce the quantity as 500 Kgs by placing slash between the zeros. This practice has been identified and a penalty amounting to Rs.44,20,000/- was levied for 2005-06 and 2006-07. Ext.R1(d) is the penalty order. It is the case of the respondents that the said Kareem is not claiming the goods because he want to avoid the additional demand for the offence. Ext.R1(e) is the notice under section 49(3) issued to the owner of the goods and vehicle. The respondents have produced 12 still photographs copied from the VCD taken in the matter. Ext.R1(g) series are WPC.17961/08 : 6 : photocopies of news paper report regarding the incident. Since the goods were found at forest without any records, there is no need of preparing a shop inspection report but prepared a spot mahazar. No goods were taken into custody from any of the building or go down and no one claimed the ownership of the goods till 11.00 pm on that day. It is also stated that the 3rd respondent witnessed the place of detention and enquired about the owner of the goods which confirmed that the owner of the goods is Sri.M.Kareem. His son was also present at the place of detention and the same is available in the VCD. Sri.Arun, who was present there, also stated to the police that the goods belong to the said Kareem. 4. A reply affidavit is filed by the petitioner in which it is stated as follows. Having regard to the distance between Cumbummettu and Kattappana, it is not possible to reach Cumbummettu from Kattappana within 45 minutes through the ghat road having ups and downs and it may take at least 1½ hours for the journey. It is pointed out that the case in the counter is that at 17.45 hours the 2nd respondent informed the WPC.17961/08 : 7 : 1st respondent about the detention of the dried pepper. He also pointed out that in the spot mahazar it is stated that the 1st and 3rd respondents reached the spot at 18.30 hours but, in the counter affidavit it is stated that the 1st and 3rd respondents reached the spot at 18.20 hours. It is also stated that the time, date and place of preparation of the mahazar are not mentioned in Ext.R1(b) spot mahazar. It is the case of the petitioner that the 2nd respondent has brought the pepper from some other place to the State border to hand it over to the 1st respondent and loading, unloading and transport of the goods in lorry is not necessary to carry the pepper from the State border which is of 200 meter from the Check Post but the head load can carry the goods and lorry was used for transport of the goods from still far away place. He has also produced Ext.P2 which is a news paper report. Ext.P3 series are copies of purchase bills, ledger pages and building tax receipts to prove the purchases of goods and possession of the shop by the petitioner. 5. I heard the learned counsel for the petitioner and WPC.17961/08 : 8 : the learned Government Pleader. The learned counsel for the petitioner submits that the petitioner is the owner of the goods. He has already claimed the ownership of the goods and vehicle before the authority, he submits. No one else has come forward claiming title to the goods and the 2nd respondent has no authority to seize the goods under law, he submits. There is no shop inspection report. He would submit that under section 49(3), the proviso mandates that notice should be issued to the person in charge of the vehicle and goods and that is not done. He submits that he is ready to furnish bank guarantee for the amounts demanded and the goods may be ordered to be released to him. He is not concerned about the vehicle because the vehicle does not belong to him, he submits. 6. Per contra, the learned Government Pleader reiterates his contention that it is a clear case of smuggling and the real owner of the vehicle is the said Kareem and the petitioner is put up only so that the liability that would otherwise be fastened on Kareem can be avoided. He WPC.17961/08 : 9 : would reiterate that the goods were not seized from any shop building and hence there is no need for shop inspection report. The learned counsel for the petitioner submits that the Constitution mandates that the property can be deprived of only in accordance with law. 7. Admittedly, the goods of dried pepper in 84 bags have been seized. According to the petitioner, it was seized from the shop building. According to the respondent, the goods were seized from a forest area after a long chase. The guarantee incorporated both in the Constitution and in the statutory provision cannot be divorced from the facts of each case. The plea will have to be considered on the basis of the factual situation obtaining in each case. Undoubtedly, according to section 49, before action is taken, notice must be given to the person in charge of the goods. Admittedly, the petitioner was not the person in charge of the goods. At best, the case of the petitioner can be put as a highly disputed question of fact. The petitioner has not been able to establish before me that the petitioner is the owner of the goods. WPC.17961/08 : 10 : Therefore, it is not open to him to contend that section 49(3) of the KVAT Act is violated. Therefore, I reject the contention based on the alleged violation of the proviso under section 49 (3) of the Act and that notice was not given to any person in charge of the goods and the vehicle. Ordinarily, maintaining a writ petition under Article 226 the person approaching the Court must establish his legal right and locus standi. In such circumstances, there cannot be a question of directing release of the goods to the petitioner on furnishing bank guarantee. Already proceedings have been commenced against Sri.Kareem under section 49(3). In such circumstances, it may not be possible to arrive at a conclusion that there is a violation of section 44. The petitioner has not been able to establish that goods were seized from shop necessitating shop inspection report. In such circumstances, I do not see any merit at all in the writ petition and accordingly the writ petition is dismissed. Sd/- (K.M.JOSEPH, JUDGE) aks