IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 15TH SEPTEMBER 2010 / 24TH BHADRA 1932 WP(C).No. 28411 of 2010(B) -------------------------- PETITIONER(S): --------------- M/S.ORIENTAL METALS, UNITY COMPLEX, MARKET ROAD, KOCHI-35, REPRESENTED BY MANAGING PARTNER, SRI.K.M.AHAMMED ANZARI. BY ADV. SRI.VIJAYAN. K.U. RESPONDENT(S): --------------- 1. THE COMMERCIAL TAX INSPECTOR, CTCP, WALAYAR. 2. STATE OF KERALA, REPRESENTED BY THE SECRETARY (TAXES), GOVT.SECRETARIAT, THIRUVANANTHAPURAM. GOVERNMENT PLEADER SRI.C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 15/09/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K.ABDUL REHIM, J. W.P.C.NO.28411 of 2010 Dated this the 15th day of September 2010 J U D G M E N T The petitioner is aggrieved by detention of the transport of “Cold Rolled Aluminium Sheets,” by issuing Ext.P4 notice under Section 47(2) of the Kerala Value Added Taxes Act (KVAT Act). According to the petitioner, the goods were sold by M/s.Bharat Aluminum Company Limited (BALCO), to a dealer at Delhi, M/s.Reckon Agencies Private Limited, on the basis of Ext.P2 invoice, and the said dealer has effected sale-in-transit as contemplated under Section 3(b) of the CST Act by transfer of documents of title to the goods. It is submitted that in Ext.P3 'Lorry Receipt', which accompanied the transport, such sale-in- transit was endorsed. But the goods were detained by the 1st respondent on the allegation that the sale-in-transit was not endorsed on the invoice. The contention of the petitioner is that the Lorry Receipt which accompanied the transport, which contained the endorsement, is a proper document which need be accompanied in order to prove the factum of sale-in-transit. W.P.C.No.28411/10 2 2. On a perusal of Ext.P4, it is evident that at the time of interception, no documents were available along with the transport revealing identity of the person in Kerala, to whom the goods are transported. Therefore the respondent suspected attempt of evasion of tax and the proceedings under Section 47 (2) was initiated demanding security deposit to the tune of Rs.7,48,244/-. 3. It is vehemently contended by learned counsel for the petitioner that there is a clear suppression on the part of the 1st respondent with respect to availability of Ext.P3 Lorry Receipt, at the time of interception. However, it is a disputed question of fact as to whether Ext.P3 was accompanying along with Ext.P2 at the time when interception was made. Learned counsel contended that immediately on receipt of notice, Ext.P3 was produced and inspite of that the 1st respondent was not willing to release the goods. 4. Going by the provisions contained in Section 47, it is evident that if the transport was not accompanied by documents required under the statute, the authority will be justified in W.P.C.No.28411/10 3 suspecting genuineness of the transport and also evasion of payment of tax. However, the question whether there was any attempt of evasion of tax is a matter which need be decided on completing the enquiry. Hence I am of the opinion that pending finalisation of the enquiry the goods can be released on the petitioner furnishing proper security. 5. Therefore, the writ petition is disposed of directing the 1st respondent to release goods along with the vehicle detained under Ext.P4 notice, on the petitioner furnishing Bank Guarantee for the amount of security demanded therein. 6. The competent Enquiry Officer is directed to finalise the enquiry as early as possible, after affording an opportunity of hearing the petitioner, at any rate, within a period of one month from the date of release of the goods. (C.K.ABDUL REHIM, JUDGE) jsr // True Copy// PA to Judge W.P.C.No.28411/10 4 W.P.C.No.28411/10 5 W.P.C.No.28411/10 6