IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM FRIDAY, THE 29TH OCTOBER 2010 / 7TH KARTHIKA 1932 WP(C).No. 32831 of 2010(D) -------------------------- PETITIONER: ------------------- ZICOM RETAIL PRODUCTS PVT.LTD., CC 36/1724 B, THOMAS ESTATE, THEVARA, COCHIN- 682013, REPRESENTED BY ITS SENIOR ENGINEER VARGHESE CHERIAN. BY ADV. SRI.R.MURALIDHARAN (AROOR) RESPONDENTS: ---------------------- 1. THE COMMERCIAL TAX OFFICER, IV CIRCLE, DEPARTMENT OF COMMERCIAL TAXES, ERNAKULAM 682 013. 2. THE INTELLIGENCE INSPECTOR, SQUAD NO.I, DEPARTMENT OF COMMERCIAL TAXES, ERNAKULAM. BY SENIOR GOVT. PLEADER, SRI.C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29/10/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: VK C.K. ABDUL REHIM, J ------------------------------ WP(C) NO. 32831 OF 2010 --------------------------------------- Dated this the 29th day of October, 2010 JUDGMENT Consignment of Electronic Security Systems purchased by the petitioner from its sister concern at Himachal Pradesh, on the strength of tax invoice, was detained by the second respondent on issuing Ext.P3 notice. It is stated that the goods in question were transported by Courier agent through Railway Parcel Service and it was intercepted after the goods reached at the premises of the Railway station at Kochi. The reason for detention mentioned in Ext.P3 notice issued under Section 47 (2) of the Kerala Value Added Tax Act, 2003 (KVAT Act) is that, the documents which accompanied transport does not reveal declaration of the goods at any of the border check posts or at any of the offices of the Commercial tax Department. It is further alleged that the value shown in the documents is too low when compared 2 WP(C) No. 32831/2010 with the MRP noted on the goods. Suspecting evasion in payment of tax security deposit was demanded. 2. According to learned counsel for the petitioner, the transport could not be declared in any of the border check post because it was consigned through Railway parcel service. With respect to the alleged undervaluation, it is stated that since purchase was made from a sister concern of the petitioner, the goods were sold at a considerable lower price than the MRP noted. However it is contended that, as far as the transaction pertaining to the transport does not attract any levy of tax, the power under Section 47 (2) could not be invoked with respect to such transport, alleging undervaluation. It is specifically contended that the document which accompanied the transport revealed interstate transaction on payment of CST against C Form. Therefore it is contended that there was no attempt in evasion of payment of tax. 3. Learned Government Pleader, per contra, 3 WP(C) No. 32831/2010 contended that even if the goods were transported through Railway parcel service the petitioner was at an obligation to declare the goods before the assessing authority as provided under Section 46 (3) (e) and since such declaration was not there, the transport was not accompanied with documents as required under the statute. 4. The question whether there was any attempt in evasion of payment of tax is a matter which need be decided by the competent authority, on finalising the enquiry. I am of the view that pending finalisation of such enquiry the goods can be released, on the petitioner furnishing proper security. It is noticed that the petitioner is a registered dealer who is regularly paying tax. 5. Under the above circumstances, the Writ Petition is disposed of directing the second respondent to release the goods detained under Ext.P3 notice, on the petitioner furnishing Security Bond for the value demanded thereunder, in the form prescribed under the KVAT Rules, 4 WP(C) No. 32831/2010 without sureties. 6. The competent authority will finalise the enquiry at the earliest possible, after affording an opportunity of hearing to the petitioner, at any rate within a period of six weeks from the date of release of the goods. C.K. ABDUL REHIM JUDGE dnc