TMI Blog2012 (12) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... as a guideline, proceedings under the KVAT Act can be initiated. - WP(C) No. 3097 of 2012 (J) - - - Dated:- 22-3-2012 - Antony Dominic, J Aswin Gopakumar, H. Praveen, Anwin Gopakumar, Kala G. Nambiar and R. Arun for the Petitioner Sobha Annamma Eappen, Sr. Government Pleader for the Respondent JUDGEMENT Antony Dominic, J:- First petitioner is an association of processors, manufacturers, traders and exporters of cashew nuts and cashew kernels, which is registered under the Travancore Cochin Literary, Scientific and Charitable Societies Registration Act, 1955. The second petitioner is a member of the first petitioner and is also engaged in the business of trade and exporting of cashew nuts. The petitioners have filed this writ petition seeking to quash exhibits P2 and P3 circulars issued by the second respondent fixing the floor rates for various grades of cashew nuts and cashew kernels on the basis that raw cashew nuts and cashew kernels are evasion prone commodities. On this basis, the second respondent has directed that the officials shall ensure that cashew consignments are not valued at lower value than what is shown in the circulars. According t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 vide circular No. 28 of 2011, subsequently when it was brought to the notice that market rates were low. The price is so fixed to have uniform pattern throughout the State and to avoid arbitrary fixation of rates by field staff. So there is nothing unconstitutional about it and the price fixed are only floor rates and subjected to periodical revision." The statement concludes by relying on section 3(2) of the KVAT Act as enabling the second respondent to issue the circulars impugned. According to the petitioners, exhibits P2 and P3 circulars fixing the floor value for various grades of cashew nuts and cashew kernels are ultra vires the provisions of the Kerala Value Added Tax Act and it is also contended that even if it is held that the circulars are intra vires the Act, the circulars are unconstitutional for violation of article 14 of the Constitution of India. I shall first examine the legality of the circulars. According to the second respondent, the circular has been issued as empowered under section 3(2) and section 47(16A) of the Act and these sections, being relevant, are extracted below for reference:- "3. (2) The Commissioner shall have superintendence over a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings pursued by the officers under him, while calculating the estimated sale price for collecting the advance tax at the check-post/entry point, is very much within the four walls of the law and cannot be assailed under any circumstances, especially when the dealers are provided with an alternative course to have actual assessment at the hands of the 'assessing authority' and to secure a certificate to cross the border as provided in circular 53 of 2006, validity of which circular has been upheld by this court in Fantacy Sales Corporation v. Sales Tax inspector [2007] 7 VST 323 (Ker) ; [2007] 2 KLT 174. This is more so, when fixation of the sale price by the Commissioner is after a market study, as stated in paragraph No. 5 of the counter-affidavit and further that the dealers can very well claim the refund, if they sell the commodities for a lesser price and file necessary return. Even otherwise, the dealers need not wait till the sale of the commodities materialises, as the advance tax paid can very well be adjusted/set off against the output tax to be paid along with the filing of the return in respect of the transaction in the very same month. The alleged loss, hardship ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioners that on the strength of the circulars, consignments of cashew are being detained for purposes other than collection of advance tax or proceedings in cases of under-valuation, such action of the respondents will certainly be ultra vires and illegal. The petitioners have a further case that circular No. 50 of 2006 was issued by the second respondent in exercise of his powers under section 47(16A), for collection of advance tax on various commodities and that in respect of those commodities, floor price was not fixed. Therefore, according to them, fixing of floor price only for cashew nuts and cashew kernels is discriminatory. I am unable to accept this contention. First of all, this court has already upheld the power of the second respondent to fix floor value for evasion prone commodities. Therefore, the fact that in respect of a particular commodity or group of commodities, floor value has not been fixed, is no ground to hold that the floor value fixed in respect of another commodity is unconstitutional That apart, each commodity stand apart as a separate class and unless it is established that all the commodities form one class, the petitioners cannot sustain th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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