IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 30TH SEPTEMBER 2010 / 8TH ASWINA 1932 WP(C).No. 30011 of 2010(B) ------------------------------------------ PETITIONER(S): ------------------------- PENTAGON HEALTH CARE PVT.LTD. A-117, IIND FLOOR, ADAM BYE PASS ,ANGAMALY, REPRESENTED BY ITS MANAGING DIRECTOR. BY ADVS. SRI.V.M.KURIAN, SRI.MATHEW B. KURIAN, SRI.K.T.THOMAS RESPONDENT(S): ---------------------------- THE COMMERCIAL TAX INSPECTOR, COMMERCIAL TAX CHECKPOST, BANGARA, MANJESWAR, KASARGOD DISTRICT, PIN 671 323. BY GOVERNMENT PLEADER SRI. V.K.SAMSUDHEEN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 30/09/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss C. K. ABDUL REHIM, J. =~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~= W.P.(C) No. 30011 of 2010 =~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~= Dated this the 30th day of September, 2010 JUDGMENT Issue pertains to detention of a scanning machine transported from the State of Maharashtra to Caritas Hospital, Thellakom, Kottayam. According to the petitioner, they are running a scanning unit under the name and style “Life Scan” at Caritas Hospital. The machinery in question was imported from China by M/s.Siemens Ltd., on the basis of Ext.P5 order placed by the petitioner. Ext.P7 is the Bill of Entry, which will reveal that M/s. Siemens Ltd. had imported the goods at Navi Mumbai Port. According to the petitioner, the transport was effected from the port at Mumbai as a sale in the course of import. The transport was intercepted at the Commercial Tax Check Post at Bangara, Manjeswar, on issuing Ext.P8 notice under section 47(2) of the Kerala Value Added Tax Act, 2003. The W.P.(C) No. 30011/2010 2 reason for detention mentioned is that even though the address shown in Form No.16 which accompanied the transport was that of the petitioner at Angamaly, the goods are consigned for delivery at 'Life Scan' CT Centre, Caritas Hospital, Thellakom, Kottayam. It is further mentioned that there was no document to prove that the transaction was a sale in the course of import, coming within the purview of section 5(2) of the KVAT Act. Under the above circumstances, the petitioner was requested to furnish security to the tune of Rs.11,85,821/-. 2.It is contended that the petitioner is a company incorporated, having its registered office at Angamaly. 'Life Scan' is the branch name of the petitioner's concern situated at Caritas Hospital, Thellakom. Ext.P1 receipt as well as Ext.P2 bank statement are produced to show that 'Life Scan' is owned by the petitioner company. Ext.P3 is an agreement dated 4-3-2010 executed by the petitioner company with the Caritas Hospital, which will indicate that the petitioner has been provided with space for establishing W.P.(C) No. 30011/2010 3 a scan centre on the basis of a licence fee to be paid. The petitioner has also produced Form 16 declaration, which accompanied the transport, in which it is clearly mentioned that the ownership is vested with the petitioner company and the place to which the goods were transported is their unit at Thellakom, Kottayam. On the basis of the above documents, learned counsel for the petitioner contended that there is clear evidence to show that the goods in question was imported and the sale was effected in the course of import. Therefore, the reason mentioned for detention was not at all sustainable, is the contention. 3. Learned Government Pleader appearing for the respondents, on the basis of the instructions, submitted that at the time of transport the goods were not accompanied with any document which will indicate that the goods in question was imported form the foreign country, and also to the effect that the transport was pursuant to a sale in the course of import. It is pointed out that the question as to whether the transport was genuine and as to whether there W.P.(C) No. 30011/2010 4 was any attempt of evasion in payment of tax due are matters which need be decided on finalizing the enquiry. Learned Government Pleader submitted that the petitioner is not a registered dealer and therefore they should be insisted for providing adequate security either by way of Bank Guarantee or by way of any security as provided under Rule 9(2) of the KVAT Rules. On the other hand, the petitioner requested for a direction to the respondents to release the goods, on the petitioner furnishing simple bond without sureties. 4. Considering the fact that the detention need be followed by an enquiry, I am not proposing to enter upon any findings regarding the liability for imposition of penalty under section 47(6). At the same time, I am of the opinion that the goods being an imported scanning machine worth more than Rs.1.2 crores need not be detained pending finalization of such enquiry. Furnishing any form of security, equivalent to the value demanded under Ext.P8, will definitely cause severe prejudice to the petitioner. W.P.(C) No. 30011/2010 5 Therefore, I am of the opinion that the goods can be directed to be released, on the petitioner furnishing a security bond without sureties and also furnishing an undertaking in a form of an affidavit to the effect that they will keep the scanning machine in tact without parting with ownership or possession and without removing the same from the cite at Caritas Hospital, Thellakom P.O., Kottayam till finalization of the enquiry. 5. In the result, the writ petition is disposed of directing the respondents to release the goods along with vehicle detained under Ext.P8, on the petitioner furnishing Security Bond as provided under the KVAT Rules, without sureties, for the amount demanded in Ext.P8. The petitioner will also furnish an undertaking in the form of an affidavit sworn to by the Managing Director of the petitioner company before a Notary Public, to the effect that the petitioner will not part with ownership or possession of the goods under transport and that they will not remove the same from the cite at Caritas Hospital, W.P.(C) No. 30011/2010 6 Thellakom P.O., Kottayam until finalization of the proceedings under section 47. 6. The competent authority under section 47 of the KVAT Act is directed to expedite the enquiry and to finalize the same, after affording an opportunity of hearing to the petitioner, as early as possible, at any rate within a period of two months from the date of release of the goods. C. K. ABDUL REHIM, JUDGE. mn.