IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR FRIDAY, THE 29TH FEBRUARY 2008 / 10TH PHALGUNA 1929 WP(C).No. 29462 of 2003(G) -------------------------- PETITIONER: ------------ M/S. M.K.V.K.SAW MILLS, PANAMPUR, MANGALORE, REPRESENTED BY ITS MANAGING PARTNER SRI.M.K.V.K.PAULRAJAN. BY ADV. SRI.C.KOCHUNNY NAIR SRI.DALE P.KURIEN RESPONDENTS: ------------- 1. THE SALES TAX OFFICER, KASARAGOD. 2. THE DEPUTY COMMISSIONER, COMMERCIAL TAXES, KASARAGOD. 3. THE COMMISSIONER OF COMMERCIAL TAXES, THIRUVANANTHAPURAM. ADDL. 4. M/S. GOLDEN TIMBERS, EDAYIL PEEDIKA, MAHE (PONDICHERRY STATE). ADDL. 5. MR. VINOD MATHEW, NANDANAM, NEAR SANGEETHA THEATRE, KANNUR 1 ADDL. R4 IS IMPLEADED AS PER ORDER DATED 2.11.2005 ON I.A.NO. 15707 OF 2005 ADDL. R5 IS IMPLEADED AS PER ORDER ON I.A. 13604 OF 2006 DATED 11.10.06 R1 TO R3 BY GOVERNMENT PLEADER SRI. K.P. PRADEEP R4 & R5 BY ADV. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 29/02/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 2 APPENDIX PETITIONER'S EXHIBITS: EXT.P1 TRUE COPY OF THE ASSESSMENT ORDER NO. TP-3137/99 (1509/99) DATED 2.2.2001 PASSED BY THE FIRST RESPONDENT. EXT.P2 TRUE COPY OF THE ASSESSMENT ORDER NO. TP-3137/99 (1510/99) DATED 2.2.2001 PASSED BY THE FIRST RESPONDENT. EXT.P3 TRUE COPY OF THE ASSESSMENT ORDER NO. TP-3137/99 (5739/99) DATED 2.2.2001 PASSED BY THE FIRST RESPONDENT. EXT.P4 TRUE COPY OF THE ASSESSMENT ORDER NO. TP-3137/99 (5740/99) DATED 2.2.2001 PASSED BY THE FIRST RESPONDENT. EXT.P5 STRUE COPY OF THE ORDER NO. RPS 7,8,9 AND 10/2001 DATED 20.5.2002 PASSED BY THE 2ND RESPONDENT. EXT.P6 TRUE COPY OF THE ORDER NO. R3.31429/02/CT (STRP 21/02) DATED 11.4.2003 PASSED BY THE THIRD RESPONDENT. EXT.P7 TRUE COPY OF THE NOTICE DATED 14.3.2001 EXT.P8 TRUE COPY OF THE REPLY DATED 9.3.2001 EXT.P9 TRUE COPY OF THE LETTER OF RECEIPT OF TIMBER LOGS ISSUED BY THE CONSIGNEE DATED 8.2.2000 EXT.P10 TRUE COPY OF C FORM NO. 624368 EXT.P11 TRUE COPY OF THE ASSESSMENT ORDER DATED 10.6.2002 RESPONDENTS' EXHIBITS: NIL. TRUE COPY P.S TO JUDGE. C.N. RAMACHANDRAN NAIR, J. -------------------------------------------- W.P.C. NO. 29462 OF 2003 -------------------------------------------- Dated this the 29th day of February, 2008 JUDGMENT Petitioner is challenging Ext.P6 whereunder the Commissioner of Commercial Taxes, confirmed the demand of tax and penalty under Section 30B(3) and (4) of the KGST Act. Petitioner transported timber from Mangalore to Mahe through the border checkpost B. Manjeshwar in Kerala. Under the KGST Act and Rules, petitioner has to collect transit pass in Form No. 27C from the border checkpost and surrender it at the exit checkpost. In this case, petitioner though collected Form No. 27C from the border checkpost B. Manjeshwar for transport of timber through Kerala to Mahe through the exit checkpost at New Mahe, petitioner did not surrender form No.27C which is the proof for entry into Mahe. Consequently the Department presumed sale in Kerala in terms of Section 30B(2) and proposed fine under sub-sections (3) and (4) of Section 30B. While the consignor, namely, the petitioner even after receipt of notice did not file any reply,the consignee, driver and owner of the vehicle, did not even respond to notices. Therefore 2 tax and penalty were levied under Section 30B (3) and (4) of the Act. In the revision, the first revisional authority though confirmed in principle the demand of tax and penalty, reduced the penalty to equal amount of tax. In second revision, the Commissioner confirmed the same vide Ext.P6 order against which this W.P. is filed. 2. The contention raised by the petitioner is that substantial portion of the goods were sold in Mangalore itself and for the balance quantity petitioner obtained C forms from Mahe. This argument is unacceptable because if sales were made in Mangalore which is in Karnataka State, there is no need for the petitioner to collect any Form No. 27C at border checkpost in Kerala and if any such form No. 27C is collected, then it is only for transport of goods in transit and the form itself is issued only when the goods arrive at the checkpost. Therefore this argument after collecting Form No.27C from the border checkpost is absolutely false and bogus. So far as the case of the petitioner that C forms were issued by the Purchaser at Mahe, this argument is not acceptable because such C forms issued by the Purchaser from Mahe cannot negative the presumption of local sale in Kerala in terms of Section 30B(2) of the Act. The accounting of the goods by the 3 purchaser at Mahe to help the petitioner is not going to save the petitioner from tax and penalty which is provided under Section 30B (2) and (3) of the Act on failure to surrender Form No. 27C at the exit checkpost. It is to be noted that petitioner has not offered any explanation as to why Form No. 27C was not surrendered at the exit checkpost if the petitioner has in fact transported the goods to Mahe as claimed by it. Therefore this contention is only to be rejected and I do so. Petitioner has contended that the Commissioner is wrong in sustaining the order under Section 30B(4) which according to the petitioner has no application. Of course I find that Section 30B(4) is relied on by the Commissioner only because consignee and the transporter were not traceable and consequently he treated the transport as made to bogus persons. I do not think reliance by Commissioner on Section 30B(4) will affect the validity of the order otherwise sustainable under Section 30B (2) and (3) of the Act. W.P. therefore fails and is dismissed. (C.N. RAMACHANDRAN NAIR) Judge kk 4