The petitioner herein, who is a registered dealer in the State of Gujarat, had imported vitrified tiles from China through the Cochin Port. On reaching the goods, it was got cleared submitting Bill of Entry dated 09.10.2014. Meanwhile, the petitioner got Exts. P2A and P2B purchase orders from two registered dealers in Kerala for the supply of specific quantity of materials and accordingly the petitioner sold the same to the said dealers, as per Exts. P3A and P3B invoices. The above dealers paid advance tax and submitted Exts. P4A and P4B Forms 8F as well. The goods were being transported in the vehicles bearing Nos. KL7 BS 5246 and KL 33 A 1188 and in the course of transit, they came to be intercepted at Wellington Island Check post, issuing Exts. P5A and Ext.P5B notices under Section 47 (2) of the KVAT Act, doubting evasion of tax and demanding security deposit to the extent as specified therein. This made the petitioner to approach this Court contending that there is absolutely no rhyme or reason to have detained the vehicles and goods. It is contended that the course pursued by the petitioner was nothing but an 'interstate sale' and that the petitioner is having every right to have completed the deal.
2. Heard the learned counsel for the petitioner as well as the learned Government Pleader appearing for the respondents.
3. The learned counsel for the petitioner submits that the petitioner, who is a registered dealer in Gujarat, is having every right to import goods through Cochin Port and it was in the course of further proceedings that the sale was effected to the concerned dealers in Kerala, who had remitted advance tax as well, as borne by Exts. P4A and P4B and that the goods were being transported accordingly. This, according to the petitioner, is only an 'interstate sale' and hence the detention is per se wrong and unsustainable.
4. The case of the respondents as projected by the learned Government Pleader is that the petitioner had taken the delivery of the goods from the customs, after the import, and as such, the version put forth as to the alleged 'interstate sale' is not liable to be entertained. It is stated that the petitioner is having no registration in the State of Kerala and hence they are not permitted to effect any CST sale in the State, though the sale bill is stated as issued from the State of Gujarat. It is also stated that requirement of Section 3 of the CST Act is not satisfied by the petitioner and that the transfer of goods could only be considered as a local sale. According to the respondents, the import is only the result of collusion with the dealers in Kerala to evade tax at the first point of sale, by remitting advance tax in the name of purchasers in Kerala. It is contended that the course being pursued by the petitioner is a clear instance of tax evasion.
5. After hearing both the sides, this Court finds that the undisputed extent of facts for considering this case shows that the goods are in Kerala, the seller is now in Kerala and that the sale is effected to the dealers in Kerala. This Court prima facie finds considerable force in the submissions made by the learned Government Pleader that situs of sale are in Kerala. However, this Court does not express anything with regard to the merit or the course and events, as the correct factual position has to be brought to light by way of the adjudication proceedings and expression of any opinion in this regard may adversely affect the rights and liberties of the parties concerned. This is more so, since the very same petitioner had approached this Court few days back, projecting almost similar grievance by way of W.P.(C) No. 30088 of 2014, effecting sale to a dealer in Mahe. The insinuating circumstances brought to the notice of this Court were specifically referred to and the learned counsel was confronted with the facts and figures. After hearing both the sides, the petitioner was permitted to release the goods, subject to satisfaction of 25 % of the disputed liability and on such other terms, vide judgment dated 18.11.2014.
6. In the said circumstances, the petitioner is permitted to have the goods released, on satisfaction of 25 % of the disputed liability covered Exts. P5A and P5B and also on execution of 'simple bonds' without sureties by the authorised representative of the petitioner, along with the concerned registered dealer to whom the goods have been allegedly sold by the petitioner. This shall be without prejudice to the rights and liberties of the respondents to pursue the adjudication proceeding, after issuance of notice to the petitioner and the concerned registered dealer/s. It is made clear that the amount stated as satisfied by the petitioner as aforesaid and also the 'advance tax' stated as remitted by the registered dealers (according to the Government Pleader the amount was satisfied by the petitioner, though in the name of the registered dealer/s) shall be subject to the adjudication proceedings as above.
The petitioner shall produce a copy of this judgment along with copy of the writ petition before the concerned respondent for further steps.
The Writ Petition is disposed of.
kmd Sd/-
P. R. RAMACHANDRA MENON, (JUDGE)