Detention of the goods transported by the petitioner issuing Ext.P7 notice under Section 47(4) of the KVAT Act, 2003 referring to the 'tax in arrears' to be cleared by the petitioner, made the petitioner to approach this Court by filing this writ petition.
2. The case of the petitioner is that, the petitioner is a registered dealer under the Kerala Value Added tax Act and the Central Sales Tax Act and is ordinarily doing business involving interstate sales to Governmental institutions, procuring such materials from the State of Maharashtra. The petitioner started supply from March, 2013 onwards. Since the customers did not satisfy the bill amount on time, the petitioner faced acute financial stringency and was not in a position to file returns from March, 2013. On receipt of notice issued by the second respondent/assessing authority under Section 22(3) of the KVAT Act and Rule 6(5) of the CST Rules, the petitioner submitted Ext.P5 reply/request on 10.10.2014 referring to the facts and circumstances. It is also stated that the petitioner has satisfied a sum of ₹6,19,427/-. According to the petitioner, no notice has been served to the petitioner so far, to remit the tax due.
3. While so, in the course of transit of goods in the vehicle bearing No. KL-03 S 1594, it came to be intercepted by issuing Ext.P7 notice under Section 47(4) of the Act, demanding clearance of tax arrears, which according to the petitioner is per se wrong and arbitrary in all respects and hence under challenge. The learned counsel for the petitioner submits that, by virtue of the scheme of statute, the respondents ought to have permitted release of the goods, if the tax in respect of 'goods transported' was satisfied. It is stated that, the petitioner is entitled to have input tax credit to an extent of ₹16.35 lakhs and that the petitioner has already satisfied a sum of ₹14.27 lakhs.
4. The learned Government Pleader submits that, in respect of the transactions pursued by the petitioner from March, 2013, total liability is to the tune of ₹78 lakhs, which according to the petitioner is an inflated figure, based on 'estimated turnover'.
The learned counsel however submits that, earnest steps are being taken on war footing to clear the liability to the Department on or before 10.11.2014. It is also stated that the petitioner is ready to furnish a 'post-dated cheque' and shall execute a simple bond without sureties as stipulated in paragraph '7' of the judgment rendered by a Division Bench of this Court in W.A. No. 260 of 2012 dated 22.02.2012, so as to facilitate release of the goods detained under Section 47(4).
5. In view of the dispute between the petitioner and the Department, as to the actual amount to be satisfied, as an interim measure, this Court directs the petitioner to issue a post-
dated cheque for a sum of ₹20 lakhs and execute a simple bond without sureties. In addition to the same, the petitioner shall also satisfy tax payable at the rate of 5% in respect of the commodity that is being transported now, on a provisional basis. On satisfaction of the requirements as above, the goods detained by the second respondent vide Ext.P7 notice shall be released to the petitioner forthwith. The actual liability of the petitioner shall be quantified by the competent authority in accordance with law, within 'one month' and the position shall be let known to the petitioner and it will be for the petitioner to pursue further steps in this regard.
The writ petition is disposed of. The petitioner shall produce a copy of the judgment along with a copy of the writ petition before the competent authority for further steps.
P.R. RAMACHANDRA MENON, JUDGE.
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