Judgment:
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON MONDAY, THE24H DAY OF MARCH20143RD CHAITHRA, 1936 WP(C).No. 8148 of 2014 (P) -------------------------------------- PETITIONERS: --------------------- JYOTHI LABORATORIES LTD., KANDANASSERY, THRISSUR DT, REP.BY T.V.THILAKAN, SR. OFFICER, ACCOUNTS. BY ADVS.SRI.P.RAGHUNATH SRI.PREMJIT NAGENDRAN RESPONDENT: --------------------- INTELLIGENCE INSPECTOR, SQUAD NO.1, COMMERCIAL TAXES, MATTANCHERRY AT ALUVA-683 101. BY SR.GOVERNMENT PLEADER SRI.MANOJ.P.KUNJACHAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON2403-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Msd. WP(C).No. 8148 of 2014 (P) -------------------------------------- APPENDIX PETITIONER(S)' EXHIBITS ------------------------------------- EXHIBIT P1: PHOTOCOPY OF ORDER
OF HON'BLE SUPREME COURT DATED0903-2014. EXHIBIT P2: PHOTOCOPY OF INV. NO. 2003 DATED1703-2014. EXHIBIT P3: PHOTOCOPY OF INV. NO. 2004 DATED1703-2014. EXHIBIT P4: PHOTOCOPY OF INV. NO. 2006 DATED1803-2014. EXHIBIT P5: PHOTOCOPY OF NOTICE ISSUED U/S. 47(2) OF THE ACT DATED1803-2014. EXHIBIT P6: PHOTO COPY OF REPLY FILED TO EXT. P5. RESPONDENT(S)' EXHIBITS: ----------------------------------------- NIL //TRUE COPY// P.S.TO JUDGE. Msd. P.R. RAMACHANDRA MENON, J.
.............................................................................. W.P.(C)No.8148 OF2014......................................................................... Dated this the 24th March, 2014
JUDGMENT
The petitioners, who are manufacturers of 'Ujala Supreme, ''Ujala Stiff & Shine and other products, sold their items to their regular customers as per three invoices. The vehicle carrying the above goods were detained on 18.03.2014 on its way to the dealers by the respondent/Intelligence Inspector issuing Ext.P5 notice under Section 47(2) of the Kerala Value Added Tax Act doubting evasion of tax and demanding security deposit to the extent as specified therein. According to the petitioner, the transport was accompanied by Original invoices as prescribed by Section 47 (3) of the KVAT Act. 2.. The insinuating circumstances noted in Ext.P5 are in the following terms. "The vehicle with goods intercepted and checked at Parambayam in the Angamaly- Aluva route while plying towards Aluva direction On verification of the documents, accompanied the consignment, the following defects were noticed.
1. Invoice No.2003 and 2004 are pre dated i.e. 17/03/2014 considering the place of W.P.(C)No.8148 OF20142 commencement of journey and destination multi consignment with same document is possible and suspect so.
2. In Bill No.2003 dt. 17/03/2014 item No... 3 and 4 Ujala Stiff and Shine ) the tax collected @ 5%. But the item attracts tax @ 14.5% (See order No.C-7012/07/07 dt. 15.10.2007 of CCT, Tvpm.).
3. As per Invoice No.2006 dt. 18/03/2014 item 4,5 and 6 are shown as trade discount in quantity (quantity discount). As per section 7 of KVAT Act, 2003, the quantity allowed as trade discount shall be deemed to be a sale which implies that tax will be payable on such quantity of goods given as discount or incentive. Hence the entire quantity is seen as exempted from collecting tax which results in revenue leakage. " The learned Counsel for the petitioner submits that the petitioner is ready to establish the facts and figures by producing all the relevant documents before the competent authority at the time of finalisation of the adjudication proceedings.
3. The prayer of the petitioner is sought to be resisted by the learned Sr.Government Pleader appearing for the W.P.(C)No.8148 OF20143 respondents, stating that, but for the detention, the lapse on the part of the petitioner would not have been brought to light.
4. After hearing both the sides, this Court finds that the correctness of the facts and circumstances can be brought out only by adjudication proceedings under Section 47(6) of the KVAT Act. However, for that reason, the goods and the vehicle need not be detained any further and that the same can be released to the petitioner on furnishing 'simple bond' for the amount demanded in Ext.P5. It is ordered accordingly. The adjudication proceedings shall be finalised by the competent authority in accordance with law, as expeditiously as possible, at any rate, within three months from the date of receipt of a copy of the judgment. The petitioner shall produce a copy of the judgment along with a copy of the writ petition before the respondent /competent authority for further steps. The writ petition is disposed of. P.R.RAMACHANDRA MENON JUDGE lk