IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE THE ACTING CHIEF JUSTICE MR.C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN MONDAY, THE 17TH OCTOBER 2011 / 25TH ASWINA 1933 WA.No. 1527 of 2011() ----------------------------- AGAINST THE JUDGEMENT/ORDER IN WPC.26496/2011 Dated 04/10/2011 .................... APPELLANT(S): ---------------------- THANGAVEL S/O.CHINNAGOUNDER, 13-309, WARD NO.13, UMAGOUNDAMPATTI, KANIANAIKANPATTY POST, SALEM, TAMIL NADU 636 309. BY ADV. SRI.B.PRAMOD RESPONDENT(S): ------------------------ 1. THE COMMERCIAL TAX INSPECTOR, COMMERCIAL TAX CHECK POST, WALAYAR-678 001. 2. THE COMMERCIAL TAX OFFICER, COMMERCIAL TAX CHECK POST, WALAYAR-678 001. 3. THE INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAX CHECK POST, WALAYAR-678 001. BY GOVT.PLEADER SRI.GEORGE MECHERIL THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 17/10/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR, Ag. CJ. & P.S.GOPINATHAN, J ---------------------------------------------- W.A.No. 1527 of 2011 ---------------------------------------------- Dated this the 17th day of October, 2011 JUDGMENT Ramachandran Nair, Ag.CJ. The appeal is filed against the judgment of the learned Single Judge directing release of the escavator to the appellant on payment of 50% as security in cash and balance through a simple bond. 2. We heard counsel for the appellant and the Government Pleader appearing for the respondents. 3. The appellant's case is that the equipment is brought to Kerala for earth work for the L & T company, which is rendering contract with the Water Authority. The appellant's counsel contended that the assumption of the check-post authorities that the escavator is brought to the appellant for sale is incorrect. Therefore, according to him, the demand of security based on the tax on the value of the equipment is not tenable. Even though this may be factually correct, the Government Pleader submitted that WA.1527/11 2 even for execution of the contract, the appellant is liable to pay tax on the hire purchase received for the machine hired out. 4. After hearing both sides, we feel that conditional orders issued by the learned Single Judge for release of the vehicle can be modified. 5. Accordingly, the Writ Appeal is allowed modifying the judgment of the learned Single Judge as follows: The appellant will remit Rs.50,000/- towards security and furnish a simple bond for the balance amount with proof of his residential address in Tamil Nadu. The check-post authorities will not allow release of the vehicle back to Tamil Nadu right now, but should be allowed to take it inside Kerala for completion of the work for which it is brought. In the adjudication proceedings the appellant can produce documents of subsequent developments, such as copy of the contract received, the work executed, bills received for work or for hire charges, and the tax liability will be examined by the adjudicating authority while considering penalty. The amount deposited will be adjusted or released based on the adjudication orders and if the appellant is not found to have WA.1527/11 3 tax liability, either for sale of the equipment or hiring of the item or rendering of contract tax the amount should be refunded to the appellant. Adjudication should be taken up after one month of release of goods. C.N.RAMACHANDRAN NAIR, ACTING CHIEF JUSTICE P.S.GOPINATHAN, JUDGE vgs