IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C) No. 33006 of 2006(D)
1. V.N.AJAYAN, S/O.LATE V.S.NATESAN ACHARY,
... Petitioner
Vs
1. SALES TAX OFFICER,
... Respondent
2. DEPUTY COMMISSIONER OF COMMERCIAL
For Petitioner :SRI.ARIKKAT VIJAYAN MENON
For Respondent : No Appearance
The Hon'ble MR. Justice P.R.RAMAN
Dated :15/12/2006
O R D E R
P.R.RAMAN, J.
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W.P.(C) NO.33006 OF 2006
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Dated this the 15th day of December, 2006
J U D G M E N T
The petitioner challenges Exhibit P4 order passed by the 1st
respondent. Exhibit P4 is the order passed against interim
application filed by the petitioner in appeal filed against the
assessment order. The contention of the petitioner is that he is
the son of late Sri. Natesan Achari and Natesan Achari was
engaged in the running of one gold jewellery and one silver
jewellery. Due to old age, petitioner’s father sold the gold
jewellery as he was not able to manage the same in favour of his
son Sri.V.N.Rajeev, for a consideration of Rs.25,00,000/-. Exhibit
P1 is a copy of the agreement dated 01/04/2003. Thereafter
Sri.Rajeev was running the jewellery business at K.K.Road,
Kottayam. Subsequently, petitioner’s father died. The assessment
was later taken up by the 1st respondent and by order dated
25/01/2006, the assessment was completed raising a demand of
Rs.90,367/- towards tax and interest Rs.27,110/-. Exhibit P2 is the
order produced in the case. It is against that order petitioner filed
an appeal in his capacity as legal heir of Natesan Achari.
WPC 33006/2006
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2. It is the specific contention of the petitioner that while
determining taxable turnover all amounts realised by the dealer
by the sale of business as a whole is entitled to be deducted.
Reliance was placed on Rule 9(g) of the Kerala Sales Tax Rules.
Petitioner also placed reliance on the Full Bench decision of this
court in Deputy Commissioner of Sales Tax v. Dat Pathe
[(1985) 59 STC 374] wherein similar issue was considered and
the claim for exemption under Rule 9(g) was held as entitled.
3. The appellate authority while passing the impugned
order Exhibit P4, even after being satisfied with the prima facie
case, imposed a condition to pay 50% of the balance amount for
granting a stay for recovery of the balance. According to the
petitioner, the order is passed in a mechanical way. If only the
statutory entitlement for deduction under Rule 9(g) is allowed in
this case, it is contended that no tax is due. Petitioner during the
course also produced Exhibit P7, which is the return filed by the
son named Rajeev for the year 2003-04 to show that the goods
were purchased by him which is also shown in the return. In
Exhibit P5, which is produced to show the details of the stock of
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gold, it clearly shows that the transfer is from Bhagya Lakshmi
Jewellery to V.S.Natesan Achary. Therefore, once it is found that
the jewellery was purchased by son Rajeev and he has also shown
the said gold purchased by him in the stock register and in view
of Rule 9(g), contention of the petitioner that while determining
the taxable turn over, the assessee is entitled for deduction of
such transferred gold, prima facie satisfies a strong case in the
appeal and if finally accepted, there will not be any liability also.
However, these additional documents were also not placed before
the appellate authority at the time of passing orders.
4. In the light of the Full Bench decision of this court and
in the light of the specific rule contained in Rule 9(g) and after
considering the additional documents produced, I am satisfied
that the order passed by the appellate authority is vitiated on
being passed in a mechanical way.
5. Accordingly, the same is set aside. The appellate
authority shall reconsider the matter and pass fresh orders.
Petitioner shall produce additional documents produced in this
case before the appellate authority. The appellate authority shall
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accordingly pass order after hearing the petitioner within a period
of one month. Till such time, further recovery pursuant to the
assessment order as against the petitioner will stand stayed.
Writ petition is disposed of as above.
P.R.RAMAN, JUDGE
Rp