IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 27TH OCTOBER 2009 / 5TH KARTHIKA 1931 WP(C).No. 30149 of 2009(K) -------------------------- PETITIONER(S): --------------- MICHAEL, MALIAKAL GRANITES & MARBLES, KOTTAYAM,PROPRIETOR. BY ADV. SRI.C.K.SREEJITH RESPONDENT(S): --------------- 1. THE INTELLIGENCE INSPECTOR, INTELLIGENCE SQUAD NO.IV, DEPARTMENT OF COMMERCIAL TAXES, GOVERNMENT OF KERALA,KOZHIKODE. 2. THE INTELLIGENCE OFFICER, INTELLIGENCE SQUAD NO.IV, DEPARTMENT OF COMMERCIAL TAXES, GOVERNMENT OF KERALA,KOZHIKODE. 3. THE COMMERCIAL TAX OFFICER, COMMERCIAL TAX CHECK POST,WALAYAR. 4. THE INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAX CHECK POST,WALAYAR. 5. GOVERNMENT OF KERALA, REPRESENTED BY THE COMMISSIONER OF COMMERCIAL TAXES,THIRUVANANTHAPURAM. GOVERNMENT PLEADER SRI.C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 27/10/2009, ALONG WITH WP(C).30150 OF 2009 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K.ABDUL REHIM, J. ------------------------------ W.P.(C).No.30149 Of 2009 And W.P.(C).No.30150 Of 2009 ------------------------------ Dated this the 27th day of October, 2009 J U D G M E N T ---------------------- 1. Petitioners are aggrieved by detention of transport of Granite slabs brought on the basis of inter-state purchase. In WP(C).No:30149/09 Ext.P3 and P8 are the notices issued under Section 47(2) of the Kerala Value Added Tax Act, 2003 (KVAT Act), with respect to two consignments brought in two different vehicles. In WP(C). 30150/09, Ext.P5 is the notice of detention issued. In all the detention notices, the reason alleged is that there is undervaluation of the goods compared with the market value of the Granite slabs of similar quality. Therefore evasion of payment of tax with respect to difference in value of the goods is suspected. Hence security deposit to the tune of double the amount of tax due on the difference value as well as payment of Advance Tax with respect to difference value along with cess payable, is demanded. 2. Contention of the petitioners is that the liability for payment of tax depends on the value at which the petitioners are selling the goods within the State. Proceedings under Section 47 W.P.(C).30149 & 30150/09 2 cannot be sustained on an apprehension that the petitioner may cause sale of the goods at a higher rate of value or at a higher rate of profit. The goods being a notified item for which Advance Tax has already been paid, the suspicion expressed and the proceedings initiated have no basis, is the contention. 3. The question whether there was any attempt at evasion of payment of tax is a matter to be decided on finalisation of the adjudication proceedings contemplated under Section 47 of the KVAT Act. Since the goods covered under transport being a notified item for which Advance Tax is payable, I am of the opinion that pending finalisation of the adjudication proceedings the goods can be released on the petitioners paying Advance Tax for the difference in value alleged, and also on providing security for the amount demanded under Section 47 (2) of the Act. 4. In the result the writ petitions are disposed of directing the 1st respondent to release the goods along with the vehicle detained under Ext.P3 and P8 in WP(C).30149/09 and Ext.P5 in WP(C).30150/09, on the petitioners paying Advance Tax due on the entire value as assessed by the 1st respondent and also on furnishing security bonds in the format provided under the KVAT Rules for the value of security deposit demanded under those notices, without sureties. W.P.(C).30149 & 30150/09 3 5. The competent authority under Section 47 (5) and (6) is directed to expedite the adjudication proceedings, for which a random sample of the goods under transport may be retained before releasing the consignment, in order to ascertain the value of such goods. The adjudication proceedings may be finalised after affording opportunity to the petitioners as early as possible, at any rate within a period of two months from the date of release of the goods. C.K.ABDUL REHIM, JUDGE. okb