K.J.THOMASKUTTY V. THE AGRICULTURAL INCOME TAX & COMMERCIAL

WP(C)/26391/2010

AI Insights

The case involves K.J. Thomaskutty, the proprietor of M/S Modern Rock Mining Industries, who filed a writ petition against the Agricultural Income Tax & Commercial Tax Officer and the Commercial Tax Inspector. The petitioner challenged the detention of a vehicle transporting machinery, which was allegedly intercepted under suspicion of tax evasion. The vehicle was detained based on an invoice and a notice under Section 47(2) of the KVAT Act, demanding a security deposit. The petitioner argued that the detention was based on technicalities and that there was no tax evasion, as the correct tax rate was not applied. The court found the matter required adjudication but ruled against further detention of the goods and vehicle, setting conditions for their release.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 756041 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 19-08-2010
• Assessment Year: misc
• Laws Referred To: KVAT Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: C K GOVINDAN
• Assessee Lawyers: HARISANKAR MENON
• Keywords: Commercial tax; Security Deposit; Tax Evasion; Vehicle Detention
• Section: 47(2)

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON THURSDAY, THE 19TH AUGUST 2010 / 28TH SRAVANA 1932 WP(C).No. 26391 of 2010(Y) -------------------------- PETITIONER(S): --------------- K.J.THOMASKUTTY, PROPRIETOR, M/S.MODERN ROCK MINING INDUSTRIES, KANNAMTHANATHU BUILDING, KOMPNOLIL, VADASSERIKKARA, PATHANAMTHITTA DISTRICT. BY ADV. SRI.HARISANKAR V. MENON RESPONDENT(S): --------------- 1. AGRICULTURAL INCOME TAX & COMMERCIAL TAX OFFICER, RANNY 689 672. 2. COMMERCIAL TAX INSPECTOR, COMMERCIAL TAX CHECK POST, BANGRA-MANJESWAR, KASARAGOD DISTRICT 671 323. BY GOVT. PLEADER SRI.C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19/08/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R.RAMACHANDRA MENON, J --------------------------- W.P(C) No.26391 of 2010-Y ---------------------------- Dated this the 19th day of August, 2010. J U D G M E N T The petitioner is engaged in running a metal crusher unit and is a registered dealer, as borne by Exts.P1 and P2. In connection with the business transaction between the petitioner and another company, the petitioner has entered into Ext.P2(a) agreement and the work has to be undertaken and satisfied as specified. 2. The case of the petitioner is that, in connection with the business transaction, the petitioner had to purchased some machinery, which was being transported in the vehicle bearing No.MH 11M 5892, on the strength of Ext.P3 invoice, when the same was intercepted on the way on 30.8.2010 issuing Ext.P4 notice under Section 47(2) of the KVAT act, doubting evasion of tax and demanding security deposit to the extent as specified therein. Eventhough the petitioner submitted Exts.P5 and P6 explanations, the same were not acted upon and the detention still continues, which made the petitioner to approach this Court. 3. Heard the learned Government Pleader as well. W.P(C) No.26391 of 2010-Y 2 4. The learned counsel for the petitioner submits that, the incriminating circumstances noted in Ext.P4 are rather 'technical' in nature. It is true that the name of the consignee was wrongly shown as that of the 'Company' mentioned in Ext.P2, instead of giving the name of the petitioner and it is stated that Form 16 was actually accompanying the transport. The case of the petitioner is that the petitioner had by virtue of Ext.P2 acquired necessary rights to conduct the operations in the concerned crusher and it was for this purpose, that the machinery was being taken to the said site, showing the name of the consignee as the aforesaid company. The learned counsel also submits that the omission in mentioning the 'date' was an inadvertent one and that there is no instance of tax evasion at all. The averments raised by the petitioner are vehimentally opposed from the part of the respondents asserting that it is nothing but an instance of clear evasion of tax. The learned counsel for the petitioner further submits that absolutely no rhyme or reason is there for demanding the security deposit to the extent as specified in Ext.P4 as the computation of tax has been made at the rate of 12.5%, whereas the particular commodity will attract tax only at the rate of 4% as per the specific entry under W.P(C) No.26391 of 2010-Y 3 83(52) to the Third schedule. 5. Considering the facts and circumstances, this Court finds that the matter requires to be adjudicated to ascertain the truth. However, it is not necessary to detain the goods as well as the vehicle any further and the same shall be released to the petitioner on condition that the petitioner satisfies 1/3rd of the security deposit as demanded vide Ext.P4 and executes a 'simple bond' in respect of the balance amount. This will be without prejudice to the right of the respondents to pursue the adjudication proceedings, if any, which shall be finalised 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 Writ Petition is disposed of as above. P.R.RAMACHANDRA MENON JUDGE ab "