REMA RAJEEV, PROPRIETRIX, ARUN PRODUCTS Vs. THE DEPUTY COMMISSIONER (LAW) AND THE INTELLIGENCE INSPECTOR, SQUAD NO. III

JUDGEMENT

(1.) Challenge in this writ petition is against Ext.P1 notice issued under Section 47(2) of the Kerala Value Added Tax Act (for short the KVAT Act). Goods, which are described as "Glased Cement Paver Blocks", were transported on the basis of a tax invoice, which revealed collection of tax at 4%. The reason for detention mentioned in Ext.P1 is that for "Glased Cement Paver Tiles" the rate of tax applicable is 12.5% and the value declared by the petitioner is very low when compared with the prevailing market rate. Hence on the basis of valuation arrived at by the 2nd respondent, security deposit was demanded.

(2.) The petitioner submitted Ext.P2, contending that the rate of tax at 12.5% is applicable only with respect to 'Floor & Wall Tiles' and the correct entry with respect to goods in question is one coming under Item 18(5A) of IIIrd Schedule to KVAT Act, which is taxable only at 4%, being "Cement Paver Blocks".

(3.) It is noticed that on receipt of Ext.P2 reply the Intelligence Officer had issued Ext.P3 letter stating that if the legislative intention was to include all varieties of cement blocks, it should have mentioned clearly. Since the goods under transport is a different item than the goods mentioned in entry 18(5A) of IIIrd Schedule, the goods should be reckoned as an "unclassified item" coming within entry 103, taxable at 12.5%.