TaxTMI 
TaxTMI 
2012 (12) TMI 74
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....is basis, the second respondent has directed that the officials shall ensure that cashew consignments are not valued at lower value than what is shown in the circulars. According to the petitioners, on the issuance of exhibits P2 and P3, the Cashew Export Promotion Council of India, an organisation sponsored by the Government of India, objected to the floor value fixed by filing exhibit P4 representation. The petitioners themselves have also filed exhibit P5 representation objecting to the fixation of floor rates and it is complained that both these representations have not been considered by the second respondent. It is contended that the second respondent has no power, jurisdiction or authority under the Kerala Value Added Tax Act to issue circulars in the nature of exhibits P2 and P3 and that on the strength of these circulars, consignments are intercepted and detained inspite of having valid and proper documents required under the KVAT Act. It is in these circumstances the writ petition is filed with the aforesaid prayers. A statement has been filed on behalf of the second respondent and according to the second respondent, there is rampant undervaluation in the cashew bus....
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....sued 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 Commissioner shall have superintendence over all officers and persons employed in the execution of this Act and the Commissioner may,- (a) call for returns from such officers and persons; (b) make and issue general rules and prescribe forms for regulating the practice and proceedings of such officers and persons; (c) issue such orders, instructions and directions to such officers and persons as it may deem fit, for the proper administration of this Act. 47. (16A) Notwithstanding anything contained in this Act or the Rules made thereunder, the Commissioner may, where he deems it necessary to prevent any evasion of tax, direct that the tax in respect of the sale of any evasion prone commodities, as may specified by him, shall be paid before the date prescribed for its payment under this Act." Section 3(2)(c), as is evident from the words used by the Leg....
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....ell 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, hardships and apprehension projected to the contrary are quite wrong and unfounded." This judgment was challenged in W. A. No. 2412 of 2009 and by judgment dated 27th of January, 2010 (KMP Timbers and Saw Mitts v. Commercial Tax Inspector [2012] 50 VST 195 (Ker), the appeal was dismissed by a Division Bench of this court holding thus (page 197 in 50 VST):- "3. Ongoing through the judgment under appeal, most of the legal questions raised by the appellant about the Commissioner's jurisdiction stand decided by the learned single judge and we do not find any ground to deviate from the said finding. Further, when the validity of the statutory provision is upheld by this court, this necessarily means that advance tax could be collected in respect of goods notified as evasion prone goods by the Commissioner under se....
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..... 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 argument. Further, there are other commodities, such as live chicken, timber, etc., which are also identified as evasion prone items, in respect of which also floor value has been fixed. It was then contended that no other State has fixed the floor value for cashew nuts or cashew kernels and therefore the fixation of floor value in Kerala State alone is discriminatory. It is trite that the validity of the law in a State cannot be tested by comparison with the law prevailing in another State. Therefore, the fact that the floor value for cashew nuts and cashew kernels have not been fixed in other States is no reason to attract the provisions of article 14 of the Constitution of India. It was then contended that floor value fixed is unrealistic and that even a Government of India sponsored organizati....