A.N. SANKARAN Vs. INTELLIGENCE OFFICER

JUDGEMENT

(1.) This writ petition is filed challenging Ext.P13, an order passed by the Intelligence Officer imposing penalty on the petitioner for an amount of Rs.11,93,354/- under Section 69(1) of the Kerala Value Added Tax Act, 2003 (hereinafter referred to as 'the KVAT Act').

(2.) The short facts involved in the writ petition would disclose that the petitioner was searched by the police while he was travelling in a vehicle having registration No.KL-08 AH 2424. Gold ornaments weighing 5.0364 Kgs was seized and produced before the Judicial Magistrate of First Class. On receiving information, the Intelligence Officer submitted an application before the Judicial Magistrate of First Class claiming tax and penalty under the KVAT Act, 2003. Petitioner also preferred a claim petition which was allowed by the Court as per order dated 19/03/2012 releasing the confiscated gold on certain conditions including execution of a bond for Rs.15 lakhs with two solvent sureties and the petitioner giving a bank guarantee for Rs.30 lakhs. According to the petitioner, the gold ornaments were handed over to him on 18/02/2012 by M/s.Vattakkuzhy Prince Jewellers and re-polishing and return with impression. These facts were brought to the notice of the respondent authorities as well. It is stated that the petitioner received a notice dated 15/06/2012 under Section 47(5) to conduct enquiry under Section 47(2) of the KVAT Act. Petitioner submitted an argument note on 25/07/2012 in which it is stated that the petitioner was served with an order Ext.P13 dated 25/08/2012 by which the security deposit was converted into penalty under Section 47(6) and imposing a further penalty under Section 69(1) of the KVAT Act. The main contention urged by the petitioner is that Ext.P8 notice under Section 47(2) dated 14/03/2012 is not one issued in the course of transport. It is stated that it was issued only on 14/03/2012 when a miscellaneous petition was filed before the Judicial Magistrate of First Class, Thrissur. Therefore, Ext.P8 is without jurisdiction. It is further contended that petitioner is not a dealer as defined under Section 2(xv) and Section 15 of the KVAT Act nor he is liable to be registered under the KVAT Act. He is only a job worker being a goldsmith. Further contention urged is that the 1st respondent has not issued any notice under Section 69(4) of the KVAT Act prior to an order of penalty being imposed as per Ext.P13. It is contended that though an appeal is provided against an order of penalty under Section 47(6), only a revision will lie against an order of penalty under Section 69(1) of the KVAT Act. Since Ext.P13 order is common, the petitioner has no effective remedy other than approaching this Court. It is, in the said circumstances, that the writ petition is filed seeking to quash Exts.P8 and P13.

(3.) Counter affidavit has been filed on behalf of the respondents wherein it is stated that in terms of Section 15 of the KVAT Act, 2003, the petitioner has to mandatorily obtain registration. It is stated that the dealer has not produced any books of accounts and manufacturing accounts based on the alleged activities The volume of gold seized and the overdraft facility availed by the petitioner from the State Bank of Travancore shows that he is a large scale manufacturer who must possess registration under the Act and must file regular returns. It is further submitted that one Sudheer Chukkoth House and the petitioner carried gold ornaments in a vehicle belonging to the petitioner. They gave a statement that the goods were transported from Chennai to Alappuzha, but no valid documents were produced. It is further stated that with reference to the proceedings under Section 47(5) of the KVAT Act, notice was issued on 15/06/2012 and the petitioner was heard on 25/07/2012 and 03/08/2012. It is further submitted that the hearing note submitted by the petitioner was verified in detail. However, the petitioner failed to produce the books of accounts and manufacturing account of his activities. In the light of the aforesaid facts, he sought for sustaining the impugned order.