2014 (8) TMI 931

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....orge Mechery JUDGMENT 1. The petitioner was aggrieved with the detention of the intra-state transports made of "day old chicks" and demand of security deposit at the rates prescribed in Exts.P1 & P3 issued by the Commissioner, Commercial Taxes under Section 3 of the Kerala Value Added Tax Act, 2003 (for short, 'KVAT Act'). 2. The petitioner contends that the petitioner is engaged ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....commodities, to plug tax evasion; floor-rate has been prescribed. The Commissioner is entitled to prescribe such floor-rates as has been upheld in K.M.P Timbers & Saw Mills v. Commercial Inspector [2012] 50 VST 195 (Ker.) . The learned Special Government Pleader also would contend that the sale by the petitioner's are to unregistered dealers whose resultant turnover would not be taxed for reas....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....emand of security deposit is also for adjusting it towards the penalty imposed. What is attempted by the notices at Exts.P4 & P5 is to ferret out evasion, on the basis of the floor-rate fixed by the Commissioner, on the ground of undervaluation. This goes against the dictum laid down in U.K.Monu Timbers (supra) : "The circular is only for the purpose of collecting tax in advance and canno....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ale; wherein there is no warrant for advance payment of tax. 7. In such circumstance, this Court is not convinced that the detention made as per the notices impugned hereunder are proper, especially since the security deposit demanded is based on the circular prescribing the floor-rate. If defects are noticed, definitely transport could be detained and security deposit demanded only on the invo....