IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON TUESDAY, THE 20TH JULY 2010 / 29TH ASHADHA 1932 WP(C).No. 22623 of 2010(C) -------------------------- PETITIONER: --------------- K.GANESHAN, S/O. KUNHIRAMA PODUVAL, AGED 42 YEARS, SHREE GANESH TIMBER AND TILES, ANNUR P.O., PAYYANNUR, KANNUR DISTRICT. BY ADV. SRI.GRASHIOUS KURIAKOSE RESPONDENTS: --------------- 1. THE STATE OF KERALA, REP. BY SECRETARY, TAX DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM. 2. THE COMMERCIAL TAX INSPECTOR (OFFICER IN CHARGE), COMMERCIAL TAX CHECK POST, BANGRA, MANJESWARAM. BY GOVERNMENT PLEADER ADV. MR. C.K. GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20/07/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R. RAMACHANDRA MENON, J. .............................................................................. W.P.(C) No. 22623 OF 2010 ......................................................................... Dated this the 20th July , 2010 J U D G M E N T The petitioner is challenging the detention of the goods transported by the petitioner, issuing Ext. P4 notice under Section 47(2) of the KVAT Act doubting evasion of tax and demanding security deposit to the extent as specified therein. The learned Counsel for the petitioner submits that the goods were imported by the petitioner and were being transported on the strength of valid documents as contemplated under the relevant provisions of law. It is also stated that the actual market value has already been declared by the petitioner, however, without any regard to the true state of affairs, the concerned respondent chose to issue Ext.P4 notice stating that there is mis-classification of goods and that there was an attempt to evade tax on the higher sale value of the goods, which hence is sought to be intercepted. W.P.(C) No. 22623 OF 2010 2 2. Heard the learned Government Pleader as well, who submits with reference to the materials on record that the course pursued by the respondents is perfectly in conformity with the relevant provisions of law and is not assailable under any circumstance. 3. The learned Counsel for the petitioner submits that the security deposit demanded vide Ext. P4 is double the amount of tax which in fact is in respect of the alleged higher sale value of Rs.6,64,974/- as fixed by the concerned authorities; whereas the petitioner has already declared the value of the goods as Rs. 4,52,247/-. The learned Counsel submits that, if at all there was any doubt as to the mis-classification or under valuation, the probable tax liability and the security deposit could only be in respect of differential portion, i.e., between the value arrived at by the respondents and the declared value made by the petitioner . 4. The learned Government Pleader submits that the goods are actually not imported and no documents have been produced to sustain the plea of import. It is also stated that the W.P.(C) No. 22623 OF 2010 3 goods are actually 'teak logs', whereas the same has been described as ' imported Benin logs', as stated in Ext. P5 reply, which is quite contrary to the true state of affairs. 5. Taking note of the rival submissions, this Court finds that the matter requires to be adjudicated by the concerned authority, in accordance with the relevant provisions of law . But for that reason, this court does not find it necessary to detain the goods as well as the vehicle any further and that the same can be released to the petitioner, subject to terms. Accordingly, the respondents are directed to release the goods to the petitioner forthwith, on condition that the petitioner deposits 50% of the security deposit demanded in Ext.P4 and furnishes security for the balance amount. This will be without prejudice to the rights and liberties of the respondents to pursue adjudication proceedings, which shall be finalised as expeditiously as possible, at any rate within two months from the date of receipt of a copy of the judgment. It is also made clear that the respondents will be at liberty to take out samples, if necessary, before the goods are released to the petitioner. W.P.(C) No. 22623 OF 2010 4 The Writ Petition is disposed of. P.R. RAMACHANDRA MENON, JUDGE. lk