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TMI Blog2015 (9) TMI 1538X X X X Extracts X X X X X X X X Extracts X X X X ..... btained registration under the Kerala Shops and Commercial Establishments Act, 1960, vide Ext.P2(2) certificate of registration produced along with these writ petitions, which is valid till 31.12.2015. W.P.(C)No.19966 of 2015:- 2.1 Going by the averments in the writ petition, the petitioner purchased some chemicals and process pumps (lab chemicals) from M/s.Sigma Aldrich Chemicals Pvt. Ltd., Bangalore and the goods were transported to Kochi on the strength of Ext.P3 certificate of ownership in Form No.16 under the KVAT Rules, on a declaration that the goods are for own use. In Ext.P3 certificate of ownership dated 9.06.2015, the value of the goods is estimated at 18,342/-. On 11.06.2015, Rs. at 19.50 hrs. the goods in question were intercepted by the 2nd respondent at the Commercial Tax Check Post, Muthanga and the petitioner was issued with Ext.P4 notice under Section 47(2) of the KVAT Act, to show cause, if any, against the proposed detention of goods together with supporting evidence, in original, or to remit the security deposit of Rs.2,210/-. 2.2. The reason stated for detention of goods is that, the consignee is not a registered dealer under the KVAT Act. So evasion of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of online Form No.16, which itself proves that the goods are purchased by the petitioner for own use. The petitioner has also sought for a writ of mandamus commanding the 2nd respondent to release the goods detained as per Ext.P4 unconditionally. 3.3. On 16.07.2015, this Court granted an interim order directing release of the goods detained on executing a simple bond. 4. I heard arguments of the learned counsel for the petitioner and also the learned Government Pleader appearing for the respondents. 5. The learned counsel for the petitioner mainly contended that, as the petitioner is only a drug and food testing laboratory, which purchases goods from other States on the strength of online Form No.16, which itself proves that the goods are purchased for own use, the respondents and all check post authorities in the State may be restrained from detaining the goods for want of registration under the KVAT Act. 6. Section 46 of the KVAT Act deals with establishment of check posts and documents to be carried with the goods and clause (a) of sub-section (3) of Section 46 mandates that, subject to the provisions of sub-section (4) no person shall transport within the State across or be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence defects of a minor or technical nature only and the goods are owned by a dealer registered under the KVAT Act, such officer may allow the goods to be transported after realizing the tax on the turnover of the goods under transport. 9. Sub-section (5) of Section 47 provides that, the officer detaining the goods shall record the statements, if any, given by the owner of the goods or his representative or the driver or other person in charge of the vehicle and shall submit the proceedings along with the connected records to such officer not below the rank of Commercial Tax Officer as may be authorized in that behalf by the Government, for conducting necessary inquiry in the manner prescribed. However, going by the proviso to sub-section (5), where tax is collected under the second proviso to sub-section (2) or under sub-section (4), no enquiry under sub-section (5) shall be necessary and the officer detaining the goods shall submit the proceedings along with the connected records to the concerned assessing authority. Sub-section (6) of Section 47 provides further that, the officer authorized under sub-section (5) shall, before conducting the inquiry, serve notice on the owner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l difference between the provisions contained in sub-section (2) of Section 47 of the KVAT Act which empowers the officer concerned to intercept the goods in transit and demand security and the provisions contained in sub-section (6) of Section 47 of the said Act which empowers the officer authorised under sub-section (5) of Section 47 of the Act to impose penalty on the owner of the goods. The authorised officer is empowered to impose penalty under sub-section (5) of Section 47 of the Act on the owner of the goods only if such officer, after conducting an enquiry after serving notice to the owner of the goods and giving him an opportunity of being heard, finds that there has been an attempt to evade the tax due under the Act. On the other hand, the power under sub-section (2) of Section 47 of the Act to intercept the goods in transit and demand security can be invoked if the officer concerned has reason to suspect that the goods under transport are not covered by proper and genuine documents or that the person transporting the goods is attempting to evade payment of the tax due under the said Act. Therefore, a finding as to whether there was an attempt to evade payment of tax due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... KVAT Act. The petitioner would also contend that, while making Ext.P3A online declaration in Form No.16, the description of the goods are given as 'chemical and process pumps lab chemicals' since there was no option to declare it as 'lab chemicals' alone. The pleadings and materials on record do not indicate that, the exercise of power by the 2nd respondent in these writ petitions, while issuing Ext.P4 dentition notices under sub-section (2) of Section 47 of the Act, is vitiated in any manner. As I have already held, the officer in charge of the notified area or the empowered officer can detain the goods under transit covered by a certificate of ownership in Form No.16, if he has reason to suspect that the goods are transported into the State by persons other than registered dealers on the pretext of 'own use'. When the 2nd respondent in these writ petitions has ample power by virtue of sub-section (2) of Section 47 of the KVAT Act to intercept the goods in transit and demand security, if he has reason to suspect that the petitioner is attempting to evade payment of the tax due under the said Act, the issuance of Ext.P4 detention notices cannot, in any way, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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