A.K.JAYASANKARAN NAMBIAR, J. The appellant who was the petitioner in W.P.(C). No.14089/2014, is a dealer in stationery and packing materials on the rolls of the Assistant Commissioner, Special Circle-I, Ernakulam. He is also a green card holder under the Kerala Value Added Tax Act, hereinafter referred to as the 'Act', having satisfied the criteria prescribed under Section 19A of the Act. A vehicle carrying a consignment of carry bags was detained at Walayar Check Post by the 1st respondent, who proceeded to issue Ext.P4 detention notice demanding security deposit of Rs.14,38,572/-. In the said detention notice issued under Section 47(2) of the Act, the reason for detention is shown as follows:
“The value declared for the item under transportation are as follows:- (1) 18 x 16 Rs.9/-
Per Pkt., (2) 16 x 20 Rs.11/- Per Pkt. (3) 27 x 30 Rs.25/- Per Pkt. And (4) 30 x 40 Rs.18/- Per Pkt. But on physical verification the MRP's found as follows:- (1) 13 x 16 Rs.150/- Per Pkt. (2) 16 x 20 Rs.150/- Per Pkt. (3) 27 x 30 Rs.250/- Per Pkt. And (4) 30 x 40 Rs.200/- Per Pkt. So it is clear that the goods are valued at a very low price when compared to the MRP. So the security deposit is demanded on a value fairly and reasonably at 65% of the MRP less the declared price.”
Aggrieved by the continued detention of the consignment of goods pursuant to Ext.P4 notice, the appellant challenged the same in the writ petition. The learned Single Judge, considering the contentions on behalf of the petitioner and also the fact that the petitioner was a registered dealer, directed the goods to be released on condition of the petitioner remitting 50% of the security deposit demanded and on executing a simple bond without sureties for the balance amounts. It was also made clear that the adjudication should be completed within a period of four months. Aggrieved by the said judgment to the extent it makes the release of the goods subject to the condition of the petitioner remitting 50% of the security deposit demanded, the appellant is before us through this writ appeal.
2. We have heard Sri.K.U.Vijayan learned counsel appearing on behalf of the appellant as well as Sri.S.SudheeshKumar learned Government Pleader appearing on behalf of the State.
3. The learned counsel for the appellant would submit that insofar as the goods in question were being transported pursuant to an interstate sale transaction and the detaining authority did not have a case that the goods were being transported without valid documents as contemplated under the Act, the mere fact, that in the opinion of the detaining authority there was a mis-declaration of the value of the goods shown in the sale invoice issued by the vendor - M/s. Nakoda Poly Plast, Bhimpore, Daman, was not a valid reason justifying the detention of the goods in terms of Section 47 (2) of the Act. It was pointed out that a mis-declaration of the value of the goods for the purposes of the Act was relevant only in the context of a sale effected by a dealer within the State of Kerala and was wholly irrelevant for the purpose of detention of goods under Section 47 especially when the transaction in question was admittedly an interstate sale. Per contra, the learned Government Pleader would submit that the issue of undervaluation of goods that were being transported in the course of interstate trade was in fact a relevant consideration since it indicated that the supplier of the goods outside the State had undervalued the goods so as to facilitate a resale by the dealer within the State at a price that was substantially lower than the MRP of the goods. In this view of the matter, he would submit the detaining authority was justified in apprehending an undervaluation and consequent evasion of tax at the time of resale of the goods within the State of Kerala.
4. We have considered the rival submissions. In this case, we note that the appellant is a registered dealer on the rolls of the Assistant Commissioner, Special Circle-I, Ernakulam. He is also a person who was found eligible for the grant of a green card in terms of Section 19A of the Act. The reasons given in Ext.P4 detention notice are only that the goods that were being transported were valued at a lower price when compared to the MRP. The issue as to whether this could in fact be the basis for the imposition of any penalty on the appellant dealer on the ground that there was an attempted evasion of tax, is something that has to be adjudicated by the relevant authorities. At this stage, when we are concerned with the issue of whether any security deposit is to be demanded from the appellant as a condition for the release of the goods, we feel that his status as a registered dealer and a green card holder under the Act, must weigh in his favour. Accordingly, we feel that the judgment of the learned Single Judge requires to be modified and we do so on the following lines:
The goods detained by the respondents pursuant to Ext.P4 notice shall be released immediately on condition of the petitioner executing a simple bond without sureties for the security amount demanded under the said notice. The respondents shall thereafter complete the adjudication within a period of four months from the date of receipt of a copy of this judgment.
The writ appeal is allowed as above.
K.M.JOSEPH JUDGE A.K.JAYASANKARAN NAMBIAR JUDGE prp