Case Law Details
N.V.K. Mohammed Sulthan Rawther And Sons Vs UOI (Kerala High Court)
The first petitioner consigned a load of Roja betel nut to the second petitioner, at Kerala. It entrusted the consignment to the ABT Parcel Service for transportation. In the invoice, the first petitioner described the commodity with “HSN 0802”, and paid the tax at 5%. The first petitioner also raised the e-way bill.
On 26.09.2018, the Assistant State Tax Officer (ASTO), intercepted the lorry when it reached Palakkad. The lorry had been carrying other goods, too. The ASTO detained the goods, alleging that the first petitioner’s product fits the description “HSN 2106” and attracts 18% tax-not 5%. In other words, the ASTO detained the goods because the petitioners had allegedly been trying to evade tax by mis-describing the product.
Decision of the High Court
The HC held that if the records he seizes truly reflect the transaction and the assessee’s explanation accords with his past conduct, for example, the returns he has filed earlier, the detention is not the answer. At best the inspecting authority can alert the assessing authority to initiate the proceedings “for assessment of any alleged sale, at which the petitioner will have all his opportunities to put forward his pleas on law and on fact.” The process of detention of the goods cannot be resorted to when the dispute is bona fide, especially, concerning the exigibility of tax and, more particularly, the rate of that tax.
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