FAST AND SAFE TRANSPORTS PVT. LTD. v. STATE OF KERALA & OTHERS

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN** **TUESDAY, THE 17TH DAY OF DECEMBER 2019 / 26TH AGRAHAYANA, 1941** ## **WP(C).No.17751 OF 2008(L)** ## **PETITIONERS :-** - **1 FAST AND SAFE TRANSPORTS PVT. LTD., T.A.B ROAD, ERNAKULAM, KOCHI - 18., REP. BY ITS DEPUTY GENERAL MANAGER - A.NIZAR.** - **2 KERALA ROADWAYS PVT. LTD. CORPORATE OFFICE AT INDIRA GANDHI ROAD, CALICUT-1., REP. BY COCHIN AREA MANAGER - ABDUL KHADER.P.K.** - **3 ABT PARCEL SERVICE KERALA CONTROLLING OFFICE, 4/38, KUNNUMPURAM, DESOM, ALUVA, REP. BY ITS SENIOR MANAGER - C. RAJAGOPAL** - **BY ADVS.SRI.K.I.MAYANKUTTY MATHER SRI.P.P.RAMACHANDRAN** ## **RESPONDENTS :-** - **1 STATE OF KERALA REPRESENTED BY SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM - 695 003.** - **2 THE COMMISSIONER, COMMERCIAL TAXES, THIRUVANANTHAPURAM - 695 003.** - **3 COMMERCIAL TAX OFFICER 2ND CIRCLE, THALASSERY.** - **4 INTELLIGENCE OFFICER SQUAD NO.11, ALAPPUZHA AT CHENGANNUR.** - **5 INTELLIGENCE OFFICER SQUAD NO.11, THODUPUZHA.** - **6 TAHSILDAR REVENUE RECOVERY, THODUPUZHA.** **BY SRI. T.K. GOVINDAN, SR.GP** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 17.12.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** WP(C).No.17751 OF 2008(L) -: 2 :- ## **JUDGMENT** ## **Dated this the 17th day of December 2019** This writ petition is filed seeking the following prayers :- - “(a) Call for the records leading to Exts.P5 and P6 circulars issued by the Commissioner and quash the same by the issuance of a writ of certiorari or other appropriate writ, or order as they are contrary to the provisions of the KVAT Act. - (aa) Declare by means of an appropriate writ or order striking down Rule 17(7B) of the KVAT Rules and Form No.1G prescribed there under as ultra vires and contrary to the KVAT Act. [relief (aa) is added after relief (a) as per order dated 11.7.2008 in I.A.7954/08.] - (b) Call for the records leading to Exts.P7, P8, P9, P10, P10(a), P11, P11(a), P12 and P12(a) and quash the same by the issuance of a writ of certiorari or other appropriate writ, or order. - (c) Issue a writ of mandamus or other appropriate writ or order forbearing the respondents and other officers under the 2[nd] respondent from insisting the petitioners to take out registration under Section 15 of the KVAT Act.” 2. Heard the learned counsel for the petitioners and the learned Government Pleader appearing for the respondents. 3. The learned counsel for the petitioners would submit that Ext.P1 notice, which had been issued on the basis of Circular No.33/06 dated 11.10.2006 of the Commissioner of Commercial Taxes, Thiruvananthapuram is illegal and unsustainable and that the WP(C).No.17751 OF 2008(L) -: 3 :- issue raised is covered by a decision of this Court reported in **Saurashtra Roadways** v. **Commercial Tax Officer, 1[st] Circle, Ernakulam & Ors.** [(2014) 22 KTR 473 (Ker)]. It is submitted that the writ appeal filed as against the said judgment has also been dismissed and that the question whether the respondent therein, who is a transporting agency, is liable to take registration under the Kerala Value Added Tax Act ('KVAT Act' for short) stands covered in favour of the respondent also. It is submitted that this Court in **Saurashtra Roadways' case** supra has, after examining the statutory provisions as well as the precedent law, held that the 'transporting agency' does not come within the definition of 'dealer' under the KVAT Act and that in the absence of any provision requiring such transporting agencies to take out registration under the KVAT Act, the circular as well as the notices and proceedings issued on the basis of the same are bad in law. It is stated that the said judgment had been confirmed by the Division Bench of this Court in W.A. No.1399 of 2014 by judgment dated 26.11.2014. 4. The learned Government Pleader would, on the other hand, contend that de hors the first requirement in Exts.P2, P3 and P4 notices requiring registration numbers and its office with branch specifications, the notices issued to the petitioners under Section WP(C).No.17751 OF 2008(L) -: 4 :- 67(1)(J) of the KVAT Act required the petitioners to give further details with regard to address of the dealers with TIN numbers and value of readymade garments, electric and electronic goods consigned by them through the parcel service and required the petitioners to state whether returns have been filed correctly and the name of the office in which they have been filed. 5. The learned Government Pleader places reliance on the provisions of Section 52 of the KVAT Act, 2003. Section 52 reads as follows :- **“52. Forwarding agency, etc., to submit returns.-** Every clearing or forwarding house or agency, transporting agency, shipping agency, shipping out agency, railway authorities, operators of leased railway wagons, air cargo authorities or steamer agency in the State shall submit to the assessing authority of the area such returns and information as may be prescribed of all goods cleared, forwarded, transported, or shipped by it. The assessing authority concerned shall have the power to call for and examine the books of account or other documents in the possession of such agency with a view to verify the correctness of the returns submitted and the agency shall be bound to furnish the books of account or other documents when so called for.” The learned Government Pleader also places reliance on the provisions of Section 82 of the KVAT Act, which reads as follows :- **“82. Notice to obtain information.-** (1) Any officer, not below the rank of an assessing authority, by notice in writing, require any person, whether or not liable to pay tax under the Act, - WP(C).No.17751 OF 2008(L) -: 5 :- - (a) to furnish any information that may be required by the notice, or - (b) to attend at the time and place designated in the notice, for the purpose of being examined on oath by such officer, concerning the tax affairs of that person or any other person and for that purpose such officer may require the person examined to produce any book, record or information stored in computer in the control of that person.” 6. Reliance is also placed on Rule 30 of the KVAT Rules, which provides for filing of return by forwarding agency, clearing house, etc. in Form No.11A every month, so as to reach the assessing authority of the area on or before the 10[th] day of the month following that to which it relates. It is contended that where the KVAT Act provided for furnishing of returns by forwarding agencies in Form No.11A, the petitioners could not have relied on the quashing of a circular with regard to taking of registration by transporting agency to contend that the action taken against them on the basis of Section 82 and Rule 30 was not tenable. The learned Government Pleader also places reliance on the decisions of the Apex Court in **Tripura Goods Transport Association and another** v. **Commissioner of Taxes and others** [(1999) 2 SCC 253], **Commercial Tax Officer and others** v. **Swastik Roadways and another** [(2004) 3 SCC 640] and **A.B.C.(India) Ltd.** v. **State of Assam and another** [(2005) 6 SCC WP(C).No.17751 OF 2008(L) -: 6 :- 424] in support of the contention that where there is a provision requiring transport agencies to file returns in forms prescribed by the Rules, the challenge raised with regard to penalty orders issued for non-disclosure of details are not maintainable. It is contended that in the instant case, notice was issued specifically requiring details which were liable to be given in terms of Section 82 and also requiring the petitioners to state whether returns have been filed as provided under Section 52. It is submitted that the proceedings issued would show that no reply had been forthcoming from the petitioners and the petitioners did not appear before the respondents and submit any explanation. 7. Having considered the contentions advanced on either side and taking note of the provisions of Section 52, Section 82 and Rule 30, I am of the opinion that even if the first item in the notices cannot survive in the light of the decision of this Court in **Saurashtra Roadways' case** supra, the proceedings taken against the petitioners on the basis of non-supply of information as called for in serial Nos.2 and 3 of the notices cannot be assailed. The notices required the petitioners to furnish details of consignee dealers, which was admittedly not provided by the petitioners. Since the Act specified the filing of return by transporting agency as prescribed in Rule 30 of WP(C).No.17751 OF 2008(L) -: 7 :- the KVAT Rules and in view of Section 82 of the KVAT Act, the petitioners were duty bound to provide the information as sought for in the notice at serial Nos.2 and 3. The penalty was imposed for non-compliance with the requirement of filing of return and for non-production of the information sought. The orders of penalty are issued for non-compliance with Section 82. In the above view of the matter, I am of the opinion that the challenge raised against the penalty proceedings are not sustainable. The writ petition fails and the same is dismissed. **Sd/ANU SIVARAMAN JUDGE** Jvt/1.1.2020 WP(C).No.17751 OF 2008(L) ## -: 8 :- ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE NOTICE ISSUED BY THE 3RD RESPONDENT TO THE 1ST PETITIONER. EXHIBIT P1(a) TRUE COPY OF THE NOTICE ISSUED BY THE 4TH RESPONDENT TO THE 1ST PETITIONER. EXHIBIT P2 TRUE COPY OF THE NOTICE ISSUED BY THE 5TH RESPONDENT TO THE 1ST PETITIONER. EXHIBIT P3 TRUE COPY OF THE NOTICE ISSUED BY THE 5TH RESPONDENT TO THE 2ND PETITIONER. EXHIBIT P4 TRUE COPY OF THE NOTICE ISSUED BY THE 5TH RESPONDENT TO THE 3RD PETITIONER. EXHIBIT P5 TRUE COPY OF CIRCULAR NO.33/06/CT. EXHIBIT P6 TRUE COPY OF CIRCULAR NO.32 OF 2007 EXHIBIT P7 TRUE COPY OF THE PROCEEDINGS OF 5TH RESPONDENT ISSUED TO THE 1ST PETITIONER. EXHIBIT P8 TRUE COPY OF THE PROCEEDINGS OF 5TH RESPONDENT ISSUED TO THE 2ND PETITIONER. EXHIBIT P9 TRUE COPY OF THE PROCEEDINGS OF 5TH RESPONDENT ISSUED TO THE 3RD PETITIONER. EXHIBIT P10 TRUE COPY OF THE REVENUE RECOVERY NOTICE ISSUED BY THE 6TH RESPONDENT TO 1ST PETITIONER UNDER SECTION 7 OF THE REVENUE RECOVERY ACT. EXHIBIT P10(a) TRUE COPY OF THE REVENUE RECOVERY NOTICE ISSUED BY THE 6TH RESPONDENT TO 1ST PETITIONER UNDER SECTION 32 THE REVENUE RECOVERY ACT. EXHIBIT P11 TRUE COPY OF THE REVENUE RECOVERY NOTICE ISSUED BY THE 6TH RESPONDENT TO 2ND PETITIONER UNDER SECTION 32 THE REVENUE RECOVERY ACT.** **EXHIBIT P11(a) TRUE COPY OF THE REVENUE RECOVERY NOTICE ISSUED BY THE 6TH RESPONDENT TO 2ND PETITIONER UNDER SECTION 32 THE REVENUE RECOVERY ACT.** WP(C).No.17751 OF 2008(L) -: 9 :- **EXHIBIT P12 TRUE COPY OF THE REVENUE RECOVERY NOTICE ISSUED BY THE 6TH RESPONDENT TO 3RD PETITIONER UNDER SECTION 32 THE REVENUE RECOVERY ACT.** **EXHIBIT P12(a) TRUE COPY OF THE REVENUE RECOVERY NOTICE ISSUED BY THE 6TH RESPONDENT TO 3RD PETITIONER UNDER SECTION 32 THE REVENUE RECOVERY ACT.** //TRUE COPY// P.A. TO JUDGE