A common issue is involved in both these cases. The petitioners herein are manufacturers and traders in Gold ornaments and are registered dealers, having obtained registration in the State of Tamilnadu, under the relevant provisions of TNVAT Act, 2006.
2. In furtherance to an invitation as to the proposed exhibition to be conducted in the 'CIAL Trade Fair and Exhibition Centre', during the period from 6th to 8th December, 2014, the petitioners wanted to participate in the said fair. The petitioner in WP(C) No.33394 of 2014, brought gold ornaments of about 10.611 Kg., whereas the petitioner in the other case brought ornaments of about 11.982 kg. There was a surprise inspection by the authorities of the Commercial Taxes Department at the 'CIAL Trade Fair and Exhibition Centre' on 07.12.2014. Stating that the petitioners had not declared the goods anywhere before the concerned authorities of the Department of the State and that there was no valid Form 8FA, the goods were taken into custody. The petitioners have been served with notice under Section 67(1) of the KVAT Act, proposing to impose penalty. Ext.P8 is the notice issued in the case of the petitioner in WP(C) No.33394 of 2014, which was stated as subsequently revised and substituted as per notice bearing SIR No.074704/8.12.2014 dated 09.12.2014, also including the tax component as well, thus raising a total demand of Rs.39,12,279/- (Rupees Thirty nine lakhs twelve thousand two hundred and seventy nine only). In the case of the petitioner in the other case, the total demand is for Rs.28,52,520/- (Rupees Twenty eight lakhs fifty two thousand five hundred and twenty only).
3. The learned counsel for the petitioners submit that, the materials brought were not for sale, but exhibition alone. In so far as there is no sale on the part of the petitioners, and since they do not fall even under the definition of the term 'casual trader', there cannot be any liability upon the petitioners.
4. The learned counsel for the petitioner in WP(C) No.33456 of 2014 points out with reference to the contents of Ext.P1 notice that, even according to the respondents, it is stated that no sale has been effected, as the sale value has been shown as 'nil'. Reference is also made to the total quantity of the materials brought, as stated in Ext.P1 SIR dated 07.12.2014, which tallies with the figures as given in Ext.P3, however conceding that 'Form 8FA' was not there.
5. Heard the learned Government Pleader as to the facts and figures. The version of the petitioners is sought to be rebutted with reference to the relevant provisions of law and the admitted facts. The learned Government Pleader points out that, as per the materials collected by the authorities of the Department, there was a conscious attempt to evade tax. This Court does not propose to go into the merits of the case, nor does intend to express anything in this regard, as it is for the Departmental Authorities to consider and finalise the matter, more so when notice under Section 67(1) of the KVAT Act has already been issued.
6. The petitioner in WP(C) No.33394 of 2014 has submitted Ext.P10, in response to the notice dated 07.12.2014. But, in view of the subsequent/revised notice, this Court finds that the petitioner shall be given an opportunity to put forth their version by filing a detailed objection and to produce copies of the relevant documents. Similar opportunity has to be given to the petitioner in the other case as well.
7. Accordingly, the petitioners are set at liberty to file detailed objections, also producing copies of the relevant documents before the 1st respondent, in response to the notice issued, which shall be done within 'ten days'. On receipt of the objection as above, the merits of the case shall be considered and appropriate orders shall be passed, in accordance with law, after affording an opportunity of hearing to the petitioners, which exercise shall be completed at the earliest, at any rate, within 'one month' from the date of filing the objections as above.
8. The goods, which are now kept in the custody of the respondents, shall be released to the petitioners, on furnishing 'Bank Guarantee' for the requisite amount, ie. the amount shown in the notice/revised notice issued to the petitioners in the concerned cases and a certificate shall be given, to have it taken back to the State of Tamilnadu. The proof of taking the goods beyond the borders of the State shall be produced by the petitioners before the 1st respondent at the time of finalisation of the proceedings.
Both the matters are disposed of. All issues are left open.
The petitioners shall produce a copy of this judgment, along with a copy of the writ petitions, before the 1st respondent, for the further steps.
P.R. RAMACHANDRA MENON, JUDGE sp