Kerala High Court
M/S.Siemens Limited vs The Inteligence Inspector
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
TUESDAY, THE 26TH DAY OF JUNE 2012/5TH ASHADHA 1934
WP(C).No. 14621 of 2012 (C)
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PETITIONER(S):
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M/S.SIEMENS LIMITED
PLOT NO.2, SECTOR 2, KHARGHAR NODE
NAVI MUMBAI-410 210. REPRESENTED BY VICE SAM JOSEPH
KEY ACCOUNTS MANAGER.
BY ADV. SRI.JOSE JOSEPH
RESPONDENT(S):
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1. THE INTELIGENCE INSPECTOR
SQUAD NO.III
OFFICE OF THE INSPECTING ASST. COMMISSIONER (INT.)
COMMERCIAL TAXES, KOZHIKODE
CAMP AT WALAYAR-678 624.
2. MUTHOOT MEDICARE PRIVATE LIMITED
VADAVATHOOR, K.K.ROAD, KOTTAYAM-686 010.
BY GOVERNMENT PLEADER AMT.SHOBA ANNAMMA EAPEN
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
26-06-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
APPENDIX
PETITIONER'S EXHIBITS:
APPENDIX
PETITIONER(S) EXHIBITS
P1- TRUE COPY OF THE PURCHASE ORDER DATED 12.04.2012 PLACED BY 2ND
RESPONDENT ON THE PETITIONER.
P2- TRUE COPY OF PURCHASE ORDER DATED 07.05.2012 PLACED BY PETITIONER
ON SIEMENS AG, GERMANY.
P3- TRUE COPY OF INVOICE OF SIEMENS HEALTHCARE, CHINA DATED 29.05.2012.
P4- TRUE COPY OF AIR WAY BILL DATED 29.05.2012.
P5- TRUE COPY OF BILL OF ENTRY DATED 29.05.2012.
P6- TRUE COPY OF PETITIONER'S DELIVERY CHALLAN-CUM-INVOICE DATED
15.06.2012.
P7- TRUE COPY OF CONSIGNMENT NOTE ISSUED BY THE CARRIER DATED
15.06.2012.
P8- TRUE COPY OF NOTICE DATED 18.06.2012 ISSUED BY THE IST RESPONDENT
UNDER SEC. 47(2) OF THE KVAT ACT.
P9- TRUE COPY JUDGMENT DATED 18.06.2012 IN WP[C]NO.13268 OF 2012.
P10: TRUE COPY OF THE PETITIONER'S PROFORMA INVOICE FOR SUPPLY OF THE C
T SCANNER.
P11: TRUE COPY OF THE PETITIONER'S PROFORMA INVOICE FOR INSTALLATION OF
THE C T SCANNER.
RESPONDENTS' EXHIBITS: NIL
//TRUE COPY//
P A TO JUDGE
P.R.RAMACHANDRA MENON, J.
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W.P.(C) No.14621 of 2012
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Dated this the 26th day of June, 2012
JUDGMENT
The petitioner imported a medical equipment from Siemens China (C T 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 purchase orders Ext.P1 and P2 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 Commercial Tax check post at Walayar on 18.6.2012 issuing Ext.P8 notice under Section 47(2) of the KVAT Act with the following defects:
"(1) As per the accompanying document, the transaction is shown as a sale by M/s.Siemens Ltd, Navi Mumbai to M/s.Muthoot Medicare Pvt. Ltd, Vadavathoor, K.K.Road, Kottayam.
The commodity is Siemens Somatom spirit C.T.Scanner 1 number and the ownership of the same will be transferred to the consignee W.P.(C) No.14621 of 2012 2 only after installation, creation, testing and successful commissioning at the worksite of the consignee. Therefore the transaction is a work contract taxable under Section 6(1)(e) of the KVAT Act and not an outright sale as disclosed by the document.
2. As per the agreement, the costs related to the movement of the consignment till the site of the consignee has to be borne by the consignor and only the site preparation ie, civil and electrical works are to be carried out by the consignee ie, M/s. Muthoot Medicare Pvt.Ltd, Kottayam. The consignor has also undertaken to impart training for the operator of the consignee after successful installation at the work site of the consignee.
3. The entire cost of transportation till the worksite of the consignee is to be borne by the consignor as per the agreement. Therefore the transfer of property in the goods can stand transferred to the consignee with in the State of Kerala, only after installation and successful commissioning of the equipment.
4. None of the following documents accompanied the consignment at the time of checking.
(a) Special permission from Director General of W.P.(C) No.14621 of 2012 3 Foreign Trade for import.
(b) End use certificate.
(c)Documents for 5(2) sale. "
In view of the defects noted as above evasion of tax was doubted and security deposit to the extent of Rs.1018500/- was demanded; which made the petitioner to file this writ 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(KVAT), Ernakulam. It is also stated that the sale effected is in the course of import, covered by Section 5(2) of the C.S.T 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 Tax Officer & Others (18 KTR 547).
3. The learned Government Pleader appearing for the W.P.(C) No.14621 of 2012 4 respondents submits on instructions, that the goods were being transported by the petitioner in a truck, and inevitably there is an installation contract, which in turn, was rightly doubted pointing out the circumstances as given in Ext.P8 notice. It is also stated that all 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 borne by Ext.P9 judgment, 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.
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 W.P.(C) No.14621 of 2012 5 concerned). But Ext.P10 'Proforma' invoice dated 19.3.2012 along with I.A 8550/2012 refers to installation at the cost of the petitioner; while Ext.P11 proforma invoice dated the same day regarding installation refers to the installation charges of Rs.1,00,000/-.
5. In view of the above stipulations as to the 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 Ext.P8; 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 verdict already passed by this Court vide Ext.P9, and petitioner's branch at Ernakulam being a registered dealer, both under the CST Act and KVAT Act.
6. 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 by the authorised representative of the Branch in charge of the petitioner at Ernakulam who happens to be the registered dealer W.P.(C) No.14621 of 2012 6 under the KVAT and CST Act before the Assistant Commissioner, Special Circle-II(KVAT), Ernakulam and it shall be without prejudice to the rights and liberties of 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/-