IN THE HIGH COURT OF KERALA AT ERNAKULAM
WA.No. 1473 of 2008()
1. M/S SHWAS HOME WORKS
... Petitioner
Vs
1. THE COMMERCIAL TAX OFFICER (AA) & 2 ORS
... Respondent
For Petitioner :SRI.DALE P.KURIEN
For Respondent : No Appearance
The Hon'ble the Chief Justice MR.H.L.DATTU
The Hon'ble MR. Justice A.K.BASHEER
Dated :15/07/2008
O R D E R
H.L.DATTU, C.J. & A.K.BASHEER, J.
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W.A.No.1473 of 2008
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Dated, this the 15th day of July, 2008
JUDGMENT
H.L.Dattu, C.J.
This writ appeal is directed against the orders passed by
the learned Single Judge in W.P.(C) No.19659 of 2008 dated 2nd July,
2008. By the impugned order, the learned Judge has rejected the writ
petition and thereby has confirmed the interim orders passed by the first
appellate authority dated 13-5-2008.
2. The assessing authority has quantified the tax liability
payable by the petitioner/appellant under the provisions of Kerala Value
Added Tax Act, 2003.
3. Aggrieved by such quantification of the tax liability, the
assessee has filed an appeal before the first appellate authority. Along
with the appeal, the assessee has also filed an application for grant of
interim order. The appellate authority after considering the request
made in the application for grant of stay, has passed the following
orders:
“These appeals were filed by M/s.Shwas Home Works,
Vyttila P.O., Kochi-19 and are directed against the ordersW.A.No.1473/2008 -2-
of the Commercial Tax Officer (AA), Ernakulam for the
years 2005-06 & 2006-07. Appellant filed petitions for
stay and Sri.T.S.Ramaswamy, Chartered Accountant was
heard.
It was contended that the Audit Officer went
wrong in not considering the fact that the appellant had
given sub contract for all the work and the levy of tax at
12.5% is not correct and the proof for the same is
available.
Examination of the contentions and
verification of records revealed that there is prima facie
case for granting conditional stay and hence the following
orders are passed:-
ORDER NO.SP 265/08 IN KVAT-564/08 & 565/08 DATED
13-05-2008Payments of balance amount for the above years are
stayed till the disposal of appeals on condition that the
petitioner remits 50% each for both the year and furnishes
security for the balance amount to the satisfaction of the
assessing authority within a period of one month from the
date of this order.
If the conditions are not fulfilled the stay
order passed will stand vacated automatically.”
4. Aggrieved by the said order, the assessee was before
this Court in the aforesaid writ petition.
5. The learned Single Judge, in our opinion, has rightly
rejected the writ petition filed by the petitioner/appellant and thereby
W.A.No.1473/2008 -3-
has confirmed the orders passed by the first appellate authority. It is the
correctness or otherwise of the orders passed by the learned Single Judge
is the subject matter of this writ appeal.
6. We have heard Sri. Dale P.Kurian, learned counsel
appearing for the appellant.
7. The orders passed by the first appellate authority is a
discretionary order. The said discretionary order passed by the appellate
authority can be interfered by this Court, only if the order so passed is
either arbitrary, capricious, whimsical or contrary to statutory
provisions .
8. Time and again the Apex Court has observed, that, in
indirect tax matters there cannot be absolute interim orders. Reference
can be made to the decisions in Assistant Collector of Central Excise
Vs. Dunlop India Ltd. {1985 (154) ITR 172} and Empire Industries
Limited Vs. Union of India {1987 (64) STC 42}. In the last paragraph of
the judgment in Empire Industries Limited Vs. Union of India {1987 (64)
STC 42} it is stated as under:
“If we may venture to suggest, in fiscal
matters specially in cases involving indirect taxes
where normally taxes have been realised from the
consumers but have not been paid over to the
exchequer or where taxes are to be realised from
consumers by the dealers or others who are parties
before the court, interim orders staying the payment
W.A.No.1473/2008 -4-
of such taxes until final disposal of the matters
should not be passed. It is a matter of balance of
public convenience. Large amounts of taxes are
involved in these types of litigations. Final disposal
of matters unfortunately in the present state of affairs
in our courts takes enormously long time and
non-realisation of taxes for long time creates an
upsetting effect on industry and economic life
causing great inconvenience to ordinary people.
Governments are run on public funds and if large
amounts all over the country are held up during the
pendency of litigations, it becomes difficult for the
Governments to run and becomes oppressive to the
people. Governments’ expenditures cannot be made
on bank guarantees or securities. In that view of the
matter as we said before, if we may venture to
suggest for consideration by our learned brethren
that this Court should refrain from passing any
interim orders staying the realisations of indirect
taxes or passing such orders which have the effect
of non-realisation of indirect taxes. This will be
healthy for the country and for the courts.”
9. In view of what has been stated by the Apex Court, in
our opinion, the first appellate authority was justified in putting the
appellant on terms for granting the interim order.
10. The main prayer in the writ petition was for a direction
to the first appellate authority to dispose of the appeal filed by the
petitioner which is dated 6-3-2008. The second prayer was to direct the
assessing authority not to resort to recovery proceedings till the appeal
filed by the assessee is decided by the first appellate authority.
11. One way or the other, both the prayers cannot be
granted by this Court. The appeal that is filed by the petitioner is of the
W.A.No.1473/2008 -5-
year 2008. We cannot be expecting the appellate authority to give an out
of turn hearing to a matter which is recent. In that view of the matter,
even the first prayer cannot be granted by this Court.
12. So long as the orders passed by the assessing authority
is not disturbed by the superior forum, this Court is not expected to pass
a negative order asking the authority not to recover the quantified tax
liability pursuant to an order of assessment passed. In that view of the
matter, the second prayer also cannot be granted by this Court. Keeping
all these aspects of the matter in view, in our opinion, the learned Single
Judge was justified in rejecting the writ petition against the interim
orders passed by the first appellate authority.
13. We do not see any error in the orders passed by the
learned Single Judge which would call for our interference. Therefore,
the writ appeal requires to be rejected and it rejected.
Ordered accordingly.
(H.L.DATTU)
CHIEF JUSTICE
(A.K.BASHEER)
JUDGE
MS/dk