IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 34968 of 2009(M)
1. JOSEPH KURIAKOSE, PROPRIETOR,
... Petitioner
Vs
1. ASST.COMMISSIONER (AUDIT ASSESSMENT),
... Respondent
2. DEPUTY COMMISSIONER (APPEALS),
3. DEPUTY TAHSILDAR (REVENUE RECOVERY),
For Petitioner :SRI.HARISANKAR V. MENON
For Respondent : No Appearance
The Hon'ble MR. Justice C.K.ABDUL REHIM
Dated :07/12/2009
O R D E R
C.K.ABDUL RAHIM J.
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W.P(C) No. 34968 of 2009-M
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Dated this the 7th day of December, 2009.
J U D G M E N T
1. Challenge in this writ petition is against Ext.P5 order
passed by the second respondent on a stay petition which is filed
along with the appeal filed against Ext.P1 order of assessment made
under Section 25 of the Kerala Value Added Tax Act (KVAT Act). On
an earlier occasion, the second respondent issued an interim order
as per Ext.P3, wherein stay was granted imposing a condition for
payment of 50% of the balance tax in dispute. The petitioner
challenged that order before this Court and this Court in Ext.P4
judgment set aside the order and remitted the matter to the second
respondent for reconsideration. In Ext.P4 judgment this Court
observed that the appellate authority, having referred to the
contentions in the appeal had recorded satisfaction about prima-
facie case being made out, but for imposing condition for payment
of 50%, no reason was stated. This Court referred to the settled
legal position in the decision in Supreme Electrical Engineering (P)
Ltd. Vs. Commissioner of Income Tax Officer (2008(3) KLT 805),
wherein it is held that the authorities will have to specify reasons for
W.P(C) No. 34968 of 2009-M 2
imposing conditions while passing interim orders.
2. On a perusal of the order impugned herein, it is noticed
that the appellate authority has not even referred to the judgment of
this Court nor had it referred to the decision cited above. The
contentions in the appeal were narrated once again. It is stated that
the contentions were verified by the appellate authority and that the
appellate authority became convinced that credit has not been given
by the assessing authority with respect to an amount of
Rs.3,25,126/-, which is the input tax claim made. Thereafter
without mentioning any reason, the appellate authority observed
that the petitioner had made out a prima-facie case for conditional
stay and imposed a condition for payment of 40%.
3. Contention in the appeal is mainly pertaining to
eligibility of the petitioner for compounding of tax, under Section 8
of the Kerala Value Added Tax Act. According to the petitioner with
respect to the assessment year 2005-06, he was permitted to pay
compounded tax calculated at 140% of the value of purchase of
liquor. But in Ext.P1 assessment order it is held that the dealer is
liable to pay tax on the actual turn over conceded in the entire year.
The above stand is taken based on the provisions contained in SRO
W.P(C) No. 34968 of 2009-M 3
No.1122/2005 dated 31.12.2005. The legal question in dispute is
as to whether the above said notification can have retrospectivity.
Contention of the petitioner is that the amendment to Section 92 of
the Kerala Value Added Tax Act which permits bringing of
notifications with retrospective effect, came into force only with
effect from 1.7.2006, and therefore the notification in question
could not have any retrospectivity as on the date of its
promulgation, ie. on 31.12.2005.
4. While adverting to the above contentions, I am of the
opinion that the issue raised in the appeal is purely a legal in
question, which has to be considered elaborately while disposing of
the appeal. Further it is evident from Ext.P5 that the appellate
authority was convinced about non-credit of considerable amount
under the input tax claim. However it is evident that even after
specific directions issued under Ext.P4 judgment, the appellate
authority had failed to issue an order on proper application of mind
with reasonings set forth therein. Hence the challenge against
Ext.P5 has to be upheld on the basis that the order itself is non-
explanatory and will not reveal proper application of mind.
5. Under the above circumstances, considering the fact that
W.P(C) No. 34968 of 2009-M 4
the main dispute is pertaining to a legal aspect, I am of the opinion
that ends of justice will be achieved by directing the appellate
authority to have an earlier disposal of the appeal. At the same
time, I am of the opinion that a lesser condition can be imposed,
especially taking note of the admitted non-credit of input tax claim.
6. In the result, the writ petition is disposed of directing the
second respondent to consider and pass orders on Ext.P2, appeal
after affording an opportunity of hearing to the petitioner, as early
as possible and at any rate within a period of one month from the
date of receipt of a copy of this judgment.
7. Ext.P5 order is hereby set aside and the respondents are
directed to keep in abeyance realization of the amounts covered
under Ext.P1 on condition of the petitioner remitting a sum of
Rs.2,00,000/- within two weeks from today.
Sd/-
C.K.ABDUL RAHIM
JUDGE
//True Copy//
ab PA TO JUDGE