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TMI Blog2012 (12) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... as contemplated under section 47(16A) of the KVAT Act and in cases where undervaluation is detected, adopting floor value fixed as a guideline, proceedings under the KVAT Act can be initiated. X X X X Extracts X X X X X X X X Extracts X X X X ..... local cashew nuts have been reduced to Rs. 65 vide circular No. 28 of 2011, subsequently when it was brought to the notice that market rates were low. The price is so fixed to have uniform pattern throughout the State and to avoid arbitrary fixation of rates by field staff. So there is nothing unconstitutional about it and the price fixed are only floor rates and subjected to periodical revision." The statement concludes by relying on section 3(2) of the KVAT Act as enabling the second respondent to issue the circulars impugned. According to the petitioners, exhibits P2 and P3 circulars fixing the floor value for various grades of cashew nuts and cashew kernels are ultra vires the provisions of the Kerala Value Added Tax Act and it is also contended that even if it is held that the circulars are intra vires the Act, the circulars are unconstitutional for violation of article 14 of the Constitution of India. I shall first examine the legality of the circulars. According to the second respondent, the circular has been issued as empowered under section 3(2) and section 47(16A) of the Act and these sections, being relevant, are extracted below for reference:- "3. (2) The Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he proceedings pursued by the officers under him, while calculating the estimated sale price for collecting the advance tax at the check-post/entry point, is very much within the four walls of the law and cannot be assailed under any circumstances, especially when the dealers are provided with an alternative course to have actual assessment at the hands of the 'assessing authority' and to secure a certificate to cross the border as provided in circular 53 of 2006, validity of which circular has been upheld by this court in Fantacy Sales Corporation v. Sales Tax inspector [2007] 7 VST 323 (Ker) ; [2007] 2 KLT 174. This is more so, when fixation of the sale price by the Commissioner is after a market study, as stated in paragraph No. 5 of the counter-affidavit and further that the dealers can very well claim the refund, if they sell the commodities for a lesser price and file necessary return. Even otherwise, the dealers need not wait till the sale of the commodities materialises, as the advance tax paid can very well be adjusted/set off against the output tax to be paid along with the filing of the return in respect of the transaction in the very same month. The alleged loss, hardsh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioners that on the strength of the circulars, consignments of cashew are being detained for purposes other than collection of advance tax or proceedings in cases of under-valuation, such action of the respondents will certainly be ultra vires and illegal. The petitioners have a further case that circular No. 50 of 2006 was issued by the second respondent in exercise of his powers under section 47(16A), for collection of advance tax on various commodities and that in respect of those commodities, floor price was not fixed. Therefore, according to them, fixing of floor price only for cashew nuts and cashew kernels is discriminatory. I am unable to accept this contention. First of all, this court has already upheld the power of the second respondent to fix floor value for evasion prone commodities. Therefore, the fact that in respect of a particular commodity or group of commodities, floor value has not been fixed, is no ground to hold that the floor value fixed in respect of another commodity is unconstitutional That apart, each commodity stand apart as a separate class and unless it is established that all the commodities form one class, the petitioners cannot sustain this arg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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