TaxTMI 
TaxTMI 
2012 (12) TMI 74
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....ner is a member of the first petitioner and is also engaged in the business of trade and exporting of cashew nuts. The petitioners have filed this writ petition seeking to quash exhibits P2 and P3 circulars issued by the second respondent fixing the floor rates for various grades of cashew nuts and cashew kernels on the basis that raw cashew nuts and cashew kernels are evasion prone commodities. On this 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, object....
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....ngly that exhibit P3 circular was issued. In para 4 of the statement, it is stated thus:- "As per section 47(16A) of the Kerala Value Added Tax Act, 2003, the Commissioner of Commercial Taxes is empowered to order collection of advance tax on evasion prone commodities. A floor value is fixed on these evasion prone commodities after conducting market study and is subjected to periodical revision and its constitutional validity has already been upheld by the honourable High Court of Kerala in ([2007] 7 VST 323 (Ker) ; [2007] 15 KTR 161 Fantacy Sales Corporation v. Sales Tax Inspector). The tax so paid is adjustable against output tax and if not it can be refunded. The rate of local cashew nuts have been reduced to Rs. 65 ....
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....lating 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 Legislature, confers supervisory powers on the Commissioner and authorises....
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....ursued 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-affidav....
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....o collect advance tax, in respect of a commodity at entry point, the same would have led to dispute and adjudication in regard to value of commodity for the purpose of collection of advance tax. Therefore for the purpose of uniformity and to avoid unnecessary controversy, the Commissioner has fixed the value of various varieties of imported timber for the purpose of collection of advance tax. . ." Therefore, vires of section 47(16A) and the powers of the second respondent to issue circulars in the nature of exhibits P2 and P3 have also been upheld by this court by virtue of the aforesaid judgments. However, it needs to be clarified that the power under section 47(16A) to fix floor value is to be invoked to prevent evasion of tax and the C....
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...., 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 compar....