IN THE HIGH COURT OF KERALA AT ERNAKULAM
WA.No. 1604 of 2008()
1. TOJO MATHEW, AGED 35, S/O. MATHEW,
... Petitioner
Vs
1. THE DEPUTY COMMISSIONER APPEAL,
... Respondent
2. THE COMMERCIAL TAX OFFICER,
3. THE STATE OF KERALA,
4. THE INSPECTING ASSISTANT COMMISSIONER,
For Petitioner :SRI.G.SREEKUMAR (CHELUR)
For Respondent : No Appearance
The Hon'ble the Chief Justice MR.H.L.DATTU
The Hon'ble MR. Justice A.K.BASHEER
Dated :05/08/2008
O R D E R
H.L.DATTU, C.J. & A.K.BASHEER, J.
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W.A.No.1604 of 2008
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Dated, this the 5th day of August, 2008
JUDGMENT
H.L.Dattu, C.J.
This writ appeal is directed against the order passed by the
learned Single Judge in W.P.(C) No.14246 of 2008 dated 26.5.2008. By the
impugned order, the learned Single Judge has sustained the interlocutory
order passed by the first appellate authority dated 19.3.2008.
2. The impugned order passed by the first appellate authority on the
interlocutory application filed by the assessee along with the memorandum of
appeal reads as under:-
“This appeal is filed by M/s. Hi mech Vending Services,
Civil Lines Road, Ayyanthole, Thrissur and is directed against
the orders of assessment under section 24(1) of the KVAT Act,
2003 passed by the Commercial Tax Officer (A.A.),
Commercial Taxes, Thrissur for the year 2005-06.
Appellant filed petition for stay and as per orders of the
Hon’ble High Court of Kerala in WP(C) No.36357/2007
dt.10.12.2007 stay petition was posted for hearing. When the
case was posted for hearing Sri.S.Ramakrishnan, Sales Tax
Practitioner appeared and heard. It was contended that the
assessing authority went wrong in levying 12.5% tax on the
sales of Tea making machine and premix as against 4% tax
disclosed. The monthly addition made by the assessing
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authority was also unwarranted and excessive.
Examination of the contentions and verification of the
records revealed that there is a prima facie case for
granting conditional stay and hence the following orders:-
Order No.S.P.162/08 in KVATA 1721/2007 dated 19.3.2008.
Collection of Balance demand for the year 2005-06
under KVAT Act is stayed till the disposal of appeal on
condition that the petitioner remits 50% (Fifty percent) of
the Balance amount due on or before 28.3.2008 and furnish
security before the assessing authority for the balance
amount to the satisfaction of the assessing authority within
One month from receipt of this order .
If the conditions are not fulfilled the stay order
passed will stand vacated automatically”.
3. We have heard Sri.Sreekumar.G.(Chelur), learned counsel for
the assessee and Sri.Muhammed Rafiq, learned counsel for the revenue.
4. The assessee being aggrieved by the order passed by the
assessing authority for the assessment year 2005-06 has filed the first
appeal before the first appellate authority as provided in the statute. Along
with the appeal, the assessee has also filed an application for grant of
interim stay of the order passed by the assessing authority and the demand
notice issued pursuant thereto.
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5. The first appellate authority while considering the application
filed by the assessee, has directed the assessee to deposit 50% of the tax
payable and to furnish security for the balance amount to the satisfaction
of the assessing authority.
6. We were not interfering with the discretionary order passed by
the first appellate authority though at times we felt that the appellate
authorities are not justified in signing the “Tailor made order”. The reason
was, that, the Sales Tax Act is an indirect tax and the assessee is expected
to collect the tax as provided in the Schedule to the Act from the
purchasers and remit it to the State Government within the time prescribed
under the Act and the Rules framed thereunder. We had also kept in our
view, that, the State’s economy which primarily depends on the sales tax
collections, which is required for the developmental activities of the State
though on several. occasions, we had orally directed the learned
Government Advocate to inform the appellate authority to pass a reasoned
order while considering the interlocutory application filed by the assessee.
To say the least, the things have not improved. Therefore, we have no
other alternative, but to interfere with the mechanical orders passed by the
first appellate authorities.
7. In the instant case, a perusal of the order passed by the first
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appellate authority while considering the interlocutory application filed by
the assessee would only show, that, it has narrated the facts and arguments
advanced by the assessee’s representative and without expressing its
tentative opinion on the controversy involved in the case, has disposed of
the application in a cursory manner only by saying: “Examination of the
contentions and verification of the records revealed that there is prima
facie case for granting conditional stay and hence the following orders”.
8. In our considered view, the first appellate authority while
considering the interlocutory application filed along with the memorandum
of appeal, should apply its mind to the facts of the case and pass a
reasoned order. When we say this, we do not mean that elaborate
consideration on each one of the issues raised in the memorandum of
appeal. The first appellate authority is expected to express his tentative
opinion, why the assessee is entitled for only conditional stay and why not
absolute stay. If this consideration is not reflected in the order itself, the
only inference that the superior forum would draw is, that, there is total
non-application of mind by the first appellate authority while considering
the application filed by the assessee. Therefore, it is incumbent upon the
appellate authority to give reasons. The order as such must be a speaking
order and the decision must be supported by reasons, so that the superior
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court is assured that it is in accordance with law. A laconic order
unsupported by reasons cannot be upheld.
9. In view of the above, the assessee has to succeed. Accordingly,
we allow the appeal and set aside the order passed by the learned Single
Judge in the writ petition and the order passed by the first appellate
authority in Order No.S.P.162/08 in KVATA 1721/2007 dated
19.3.2008. A direction is issued to the first appellate authority to restore
the application filed by the assessee dated 29.10.2007 on its board and
dispose of the same in accordance with law and in the light of the
observations made by in the course of our order.
(H.L.DATTU)
CHIEF JUSTICE
(A.K.BASHEER)
JUDGE
vns/dk