IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR MONDAY, THE 7TH APRIL 2008 / 18TH CHAITHRA 1930 WP(C).No. 9560 of 2008(K) ----------------------------------- PETITIONER: ------------------ M/S.SENTHIL TIMBER TRADERS, 116,RAILWAY ROAD, TENKASI 627811 A REGD.PARTNERSHIP FIRM, REP. BY ITS PARTNER SRI A.K.S. MADHAVAN. BY ADV. SRI.E.P.GOVINDAN SRI.R.D.GANESAN RESPONDENTS: ---------------------- 1. THE COMMERCIAL TAX OFFICER IVTH CIRCLE,THRISSUR. 2. STATE OF KERALA,REPRESENTED BY SECRETARY TAXES DEPARTMENT, GOVERNMENT SECRETARIAT TRIVANDRUM. BY GOVERNMENT PLEADER SRI. GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07/04/2008 ALONG WITH WP(C) NO. 8767/2008 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR, J. ------------------------- W.P.(C) Nos. 9560, 8767, 8777, 8786, 8803, 9083, 9098, 9631, 9634, 9655, 10942, 11038 & 11693 of 2008 --------------------------------- Dated, this the 7th day of April, 2008 J U D G M E N T The petitioners, who are timber dealers in Tamilnadu, have filed these writ petitions challenging notices issued to them proposing assessment under the KGST Act and penalty for evasion of tax under the Act. According to the petitioners, they made interstate sale of timber from Tamilnadu to dealers in Kerala against C-forms issued by them. However, on enquiry the consignees, who issued C-forms, completely denied transactions. Protective assessments were made against petitioners and the brockers involved, namely Shri.K.M.Dasan and Shri.M.C.Jacob, and the consignees were also assessed. However, the Sales Tax Appellate Tribunal allowed appeal against protective assessments against the petitioners merely because C-forms were issued by the consignees in Kerala, though they denied the transactions. On the basis of Tribunal's order cancelling assessments, this Court cancelled the penalty orders vide Ext.P2 judgment produced in WP(C) No. 9560/08. It appears that the Commissioner of Commercial Taxes ordered enquiry, after judgment was pronounced by this Court, W.P.(C) Nos. 9560/2008 & connected cases -2- wherein the petitioners admitted that the entire transactions were routed through the Brockers, namely Shri.K.M.Dasan & Shri.M.C.Jacob, who made payments for the goods and furnished C-forms to the petitioners. Based on fresh enquiry notices are issued proposing to assess the turn over under the KGST Act at the hands of the petitioners in Kerala and to levy penalty. It is against these notices petitioners have filed these writ petitions. 2. I do not find any justification to interfere with the notices in writ proceedings for more than one reason. In the first place, the case against the petitioners itself is based on the petitioners' admission that the entire transactions were with the Brockers, namely Shri.K.M.Dasan & Shri.M.C.Jacob, who arranged sales, made payments and furnished C-Forms to petitioners. Therefore, the Brockers are well aware of the persons, who purchased the goods in Kerala and who paid for the same. It is not known whether petitioners will be liable for the acts done by the Brockers if they acted as agents for the petitioners for the business done in Kerala. Petitioners probably have remedy against the Brockers, if they as agents cheated them. All these are matters, to be considered by the Officer after hearing petitioners' objections. W.P.(C) Nos. 9560/2008 & connected cases -3- However, since petitioners have made an allegation that the files, pertaining to the transactions with the Brockers, are missing, I feel effective enquiry should be made against Brockers and in respect of the transactions and facts should be brought on record. In the circumstances, these writ petitions are disposed of directing the Commissioner of Commercial Taxes to avail the service of a senior police officer and a team to investigate about the transactions, particularly, the role of the Brockers, namely Shri.K.M.Dasan & Shri.M.C.Jacob, trace the records, collect evidence required to prove actual transactions, identify real purchasers, who made payments and assist the 1st respondent with further materials. The Home Department will make available the service of required number of police officers to assist the Commissioner of Commercial Taxes immediately at his request and enquiry by such team should be completed within six weeks from the date of receipt of a copy of this judgment by the Commissioner. Learned Government Pleader will forward copy of the judgment to the Commissioner for compliance. Petitioners are granted ten weeks time from today to file reply to notices based on enquiry conducted as above, which is granted on condition that the petitioners will not plead limitation as W.P.(C) Nos. 9560/2008 & connected cases -4- a ground to challenge against proceedings and on further condition that petitioners will file reply without any delay after receipt of copy of the report, which will be furnished by the 1st respondent on receipt of enquiry report from the concerned police officer engaged in the enquiry. If petitioners or consignees or Brockers or any other parties pay the tax with interest, they can approach the Commissioner and the Commissioner on proof of payment of tax with interest is free to drop all proceedings. (C.N.RAMACHANDRAN NAIR, JUDGE) jg