The petitioner who is a registered dealer under the Kerala Value Added Tax Act, is aggrieved of the detention of goods which was being transported by the petitioner (vitrified tiles imported from China). After purchase of the same from the importer on the strength of Ext.P5 invoice dated 14.11.2014 came to be intercepted by the respondent issuing Ext.P7 notice under Section 47(2) of the KVAT Act doubting evasion of tax and demanding security deposit to the tune of `2,59,270/- pointing out some discrepancies. This made the petitioner to approach this Court by filing this writ petition.
2. The learned counsel for the petitioner points out that the petitioner is a registered dealer on the rolls of the authorities in Kerala and is authorised to deal with the commodity concerned. The goods were imported through the Cochin Port having registered office in Gujarat and Ext.P2 is the copy of the 'commercial invoice' dated 08.10.2014 issued in the name of the importer. The petitioner has also produced copies of the 'bill of lading' dated 13.10.2014 and 'bill of entry' dated 10.11.2014, as WP(c). No.30659 of 2014 2 Exts.P3 and P4 respectively. The petitioner contends that the goods have been purchased by the petitioner by way of interstate sale, satisfying CST at the rate of 2% as evident from Ext.P5. It was after satisfying the 'advance tax' to the tune of Rs.1,03,707/- in respect of the total value of Rs.7,15,221/- as disclosed from Ext.P6 'Advance Tax Utilisation Receipt', that the goods were sought to be transported in the vehicle bearing No.KL-41-C-1837. This came to be intercepted on 14.11.2014 issuing Ext.P7 notice as aforesaid.
3. The learned Government Pleader appearing for the respondent submits that, there is a conscious attempt on the part of the Importer to evade the tax to be satisfied in the 'State of Kerala' and that the situs of sale is in Kerala. The Importer is doing it without taking any registration under the relevant provision of KVAT Act and Rules. The petitioner's transaction is a 'second sale' and this being the position' there is actually no necessity to satisfy the 'advance tax', which ought to have been satisfied with the Importer. The course now sought to be pursued by the petitioner, is to enable him to claim input tax credit.
4. After hearing both the sides, since the petitioner is a WP(c). No.30659 of 2014 3 registered dealer in Kerala and 'advance tax' has already been paid by him, the actual evasion of tax if any, could be considered and finalised by way of adjudication proceedings. The goods shall be released to the petitioner on condition that the petitioner, along with authorised representative of the Importer, executes a 'simple bond' without sureties before the respondent; upon which the vehicle and the goods shall be released forthwith. This however shall be without prejudice to the rights and liberties of the respondent/competent authority to proceed with the adjudication proceedings, which shall be finalized in accordance with law, as expeditiously as possible at any rate, within 'two months' from the date of receipt of a copy of this judgment.
The 'advance tax' already paid by the petitioner will be subject to the outcome of the proceedings as mentioned above. The petitioner shall produce a copy of this judgment along with a copy of this writ petition before the concerned authority for further steps.
Writ petition is disposed of.
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P.R. RAMACHANDRA MENON, JUDGE.
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