Kerala High Court
M/S. Seimens Limited vs The Commercial Tax Inspector on 8 June, 2012
Author: P.R.Ramachandra Menon
Bench: P.R.Ramachandra Menon
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON
FRIDAY, THE 8TH DAY OF JUNE 2012/18TH JYAISHTA 1934
WP(C).No. 13268 of 2012 (G)
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PETITIONER(S):
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M/S. SEIMENS LIMITED
PLOT NO. 2, SECTOR 2, KHARGHAR NODE
NAVI MUMBAI-410201, REPRESENTED BY DAVIDE ALEX K.
EXECUTIVE-SALES.
BY ADV. SRI.JOSE JOSEPH
RESPONDENT(S):
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1. THE COMMERCIAL TAX INSPECTOR
COMMERCIAL TAX CHECK POST, WALAYAR-678624.
2. DESIGANAD MEDICAL LINES (P) LTD.
CHINNAKKADA-ASHRAMAM ROAD, OPP. SANKAR NAGAR
KOLLAM-691001.
BY GOVERNMENT PLEADER SMT.SHOBA ANNAMMA EAPEN
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
08-06-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C).No. 13268 of 2012 (G)
APPENDIX
PETITIONER(S) EXHIBITS :
EXT.P1- TRUE COPY OF THE LETTER OF THE 2ND RESPONDENT.
EXT.P2-TRUE COPY OF PAGES 1 TO 5 OF PETITIONER'S PROFORMA INVOICE.
EXT.P3- TRUE COPY OF PURCHASE ORDER PLACED BY 2ND RESPONDENT.
EXT.P4- TRUE COPY OF PURCHASE ORDER PLACED BY PETITIONER ON
SIEMENS, GERMANY.
EXT.P5- TRUE COPY OF PURCHASE ORDER PLACED BY PETITIONER ON
SIEMENS, GERMANY
EXT.P6- TRUE COPY OF ORDER CONFIRMATION BY SIEMENS, GERMANY.
EXT.P7- TRUE COPY OF ORDER CONFIRMATION BY SIEMENS, GERMANY.
EXT.P8-TRUE COPY OF INVOICE OF SIEMENS, GERMANY.
EXT.P9-TRUE COPY OF AIR WAY BILL.
EXT.P10-TRUE COPY OF INVOICE OF SIEMENS, GERMANY.
EXT.P11-TRUE COPY OF AIR WAY BILL NO.HKGOO1142.
EXT.P12-TRUE COPY OF AIR WAY BILL NO.HKGOO1143
EXT.P13-TRUE COPY OF BILL OF ENTRY.
EXT.P14-TRUE COPY OF BILL OF ENTRY.
EXT.P15-TRUE COPY OF PETITIONER'S DELIVERY CHALAN-CUM-INVOICE.
EXT.P16-TRUE COPY OF L.R.NO.139977
EXT.P17-TRUE COPY OF L.R.NO.139978
EXT.P18-TRUE COPY OF L.R.NO.139979
EXT.P19-TRUE COPY OF L.R NO.139980
EXT.P20-TRUE COPY OF NOTICE U/S.47(2) OF THE KVAT ACT.
EXT.P21-TRUE COPY OF INTERIM ORDER IN WP(C) NO.37411/2010
EXT.P22-TRUE COPY OF INTERIM ORDER IN WP(C) NO.26992/2011
EXT.P23-TRUE COPY OF INTERIM ORDER IN WP(C) NO.1138/2012.
RESPONDENTS' EXHIBITS : NIL
// TRUE COPY //
P.A TO JUDGE
P.R.RAMACHANDRA MENON, J.
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W.P.(C) No.13268 of 2012
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Dated this the 8th day of June, 2012
JUDGMENT
The petitioner imported a medical equipment from Germany (an MRI Scanner) pursuant to the purchase order issued by the 2nd respondent. The scanner was so imported strictly in tune with the terms as contained in Ext.P3 purchase order satisfying the specifications of the consignee that it had to be imported and supplied exclusively for the consignee without effecting the supply either from the stock already held or from elsewhere and such other requirements. It was accordingly that the said item was being transported on the strength of the valid documents in support of the transport. However, it was intercepted at the check post at Walayar on 5.6.2012 issuing Ext.P20 notice under Section 47(2) of the KVAT Act with the following defects:
"(1) The goods under transport is Siemens Magnetom Essenza 1, 5 T MRI System valued Rs.3,29,00,000/- or transported in 4 trucks in 17 packages. The machine is a modern sophisticated W.P.(C) No.13268 of 2012 2 machinery and the installation of which requires technical know how and expertise. There is a works contract portion involved as the goods were transported in dismantled position. (2)As per the accompanied invoice the payment of Rs.1,29,00,000/- is made as advance and balance Rs.2,00,00,000/- after despatch of document through Bank. Hence the ownership of the goods is not transfered at this time as the goods were not delivered to the consignee. Hence the transportation of goods using Form No.16 is invalid. No tax is seen collected in the invoice. (3) No supporting document (Bill of Entry) is attached with the consignment to prove that the "Sale was in the course of import". As per the documents the sale was effected by Siemens Navi Mumbai to Desinganad Medical Lines (p) Ltd, Chinnakkada, Kollam. The consignee is not a registered dealer under KVAT Act 2003. (4) No purchase order is accompanied with the consignment.
(5) As per Lorry Receipt Nos.MBI-139977 to MBI 139980 of M/S.Premier Road Carriers Ltd. The consignor was Siemens Ltd, Navi Mumbai and W.P.(C) No.13268 of 2012 3 the consignee is M/s.Desinganad Medical Lines (p) Ltd, Chinnakkada, Kollam. Hence there is no sale in the course of transport."
In view of the defects noted as above evasion of tax was doubted and security deposit to the extent of Rs.33 lakhs was demanded; which made the petitioner to file this unit petition.
2. The learned counsel for the petitioner submits that in every consignment of the petitioner under similar circumstance, there is an interception and that the petitioner is being harassed merely for no reason at all. It is stated that the petitioner is a registered dealer both under the KVAT Act and CST Act on the rolls of the Assistant Commissioner, Special Circle-II, Ernakulam. It is also stated that the sale effected by the 2nd respondent is in the course of import covered by Section 5(2) of the KCST Act and according to the petitioner, such instance cannot attract any tax under the KVAT Act in view of the law declared by this Court in BPL Telecom Ltd. Vs. State of Kerala (17 KTR 521) and also by the Apex Court in the case of Indure Ltd. & Anr, Vs. The Commercial W.P.(C) No.13268 of 2012 4 Tax Officer & Others (18 KTR 547).
3. The learned Government Pleader appearing for the respondents submits on instructions, that the goods were being transported by the petitioner in 4 different trucks, by way of 17 packages and inevitably there is an installation contract, which in turn, was rightly doubted pointing out the circumstances as given in Ext.P20 notice. It is also stated that the supporting documents were not there with regard to the import and as to the sale in the course of import, so as to accept the version of the petitioner. The learned counsel for the petitioner submits that, exactly similar nature of supply and transport was being pursued earlier and almost on all such occasions, the petitioner had to approach this Court as above by Exts.P21, P22, and P23 judgments, causing the goods to be released on 'simple bond' without prejudice to the adjudication proceedings. When the particular item is not taxable under the local law, there cannot be any sustainable doubt with regard to the possible evasion of tax and hence, no security is liable to be satisfied, submits the learned counsel. W.P.(C) No.13268 of 2012 5
4. But going by the nature of the equipment that was being transported and the necessity to have installation, it cannot but be said that it may involve a 'works contract' as well, though it is not clearly revealed from the invoice produced by the petitioner (which only reflects the cost/value of the materials concerned). But Ext.P3 'purchase order' produced by the petitioner along the writ petition (which however was not accompanying the transport) is a pointer in this regard; the penultimate paragraph of which reads as follows:
" We shall provide a suitable site, proper power supply (As per your specifications), carry out preliminaries connected with the installation, civil and structural alterations required for installation of the equipment at our own cost."
5. In view of the above stipulation recorded and the chance to have an installation contract, necessity to satisfy the local tax on this head cannot be ruled out and as such, the doubt expressed by the 1st respondent finds considerable force. This Court does not find it necessary to deal with each and every item as contained in W.P.(C) No.13268 of 2012 6 Ext.P20; the correctness of which can be brought to light only in the course of adjudication proceedings. However, this Court does not find it necessary to detain the goods any further; more so in view of similar verdicts already passed by this Court vide Ext.P21, P22 and P23 and petitioner being a registered dealer both under the CST Act and KVAT Act. In the above facts and circumstances, the first respondent is directed to release the goods to the petitioner forthwith, on executing a 'simple bond' without sureties and it shall be without prejudice to the rights and liberties to the competent authority to pursue and complete the adjudication proceedings in accordance with law passing final orders under Section 47(6) of the KVAT Act, as expeditiously as possible.
Writ petition is disposed of.
P.R.RAMACHANDRAMENON, Judge.
mns/-