BASF POLYURETHANES INDIA LTD Vs. INTELLIGENCE INSPECTOR

JUDGEMENT

(1.) Proceedings under Section 47(2) of the Kerala Value Added Tax Act, 2003 (KVAT Act), initiated pursuant to Ext.P10 notice, is under challenge in this writ petition. The second petitioner is the consignment sale agent of the first petitioner. The goods in question are stated to be chemicals imported from the Italy, at the Sea Port at Cochin. According to the petitioner, the goods were transported to the premises of the 2nd petitioner on the strength of valid documents as required under Section 46(3) of the KVAT Act, and the movement of the goods was on consignment basis to the agent of the first petitioner.

(2.) The reason for detention mentioned in Ext.P10 notice is that the transfer of the goods can only be treated as a sale made by the 1st petitioner who is not a registered dealer within the state.

(3.) Contention of the petitioner is that the aspect as to whether an enquiry can be conducted under Section 47 of the KVAT Act in order to decide as to whether the transaction was a local sale or interstate sale, is totally beyond the powers contemplated under Section 47. Petitioner relies on a Division Bench decision of this court in S.T.Rev.No.119/2006 dt.27.8.2008 in support of this contention. It is held in that decision that, the enquiry officer himself has no power to act as though it is an assessing authority in order to look into the question whether the transaction is a consignment sale or interstate sale. While doing so, the enquiry officer will be acting without jurisdiction and without authority of law. The Sales Tax Officer alone is expected to look into the matter as to whether the transaction is mere consignment sale or interstate sale, is the dictum laid therein.