IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 32448 of 2009(A)
1. M/S.TRACO CABLE COMPANY LTD.
... Petitioner
Vs
1. THE ASST.COMMISSIONR,DEPT. OF
... Respondent
2. FAST TRACK TEAM, DEPT. OF COMMERCIAL
3. THE COMMISSIONR DEPT.OF COMMERCIAL TAXES
For Petitioner :SMT.S.K.DEVI
For Respondent : No Appearance
The Hon'ble MR. Justice C.K.ABDUL REHIM
Dated :20/11/2009
O R D E R
C.K. ABDUL REHIM, J.
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W.P.(C)No. 32448 of 2009
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Dated this the 20th day of November, 2009
J U D G M E N T
1. Petitioner is a company fully owned by the
Government of Kerala. Assessment under the Kerala
General Sales Tax Act, 1963 (KGST Act) for the years
2002-03, 2003-04 were completed as per Exts.P3 & P5. So
also assessment under the Central Sales Tax Act (CST Act)
with respect to the same years were completed as per
Exts.P4 & P6. The said assessments were completed by
invoking Section 17 D of the KGST Act, by the 2nd
respondent. The petitioner submitted applications under
Section 23 B for payment of amounts due under the
Amnesty Scheme and those applications were allowed as
evidenced by Ext.P7 to P10. It is submitted that the
petitioner had already remitted the first installment which
pertains to 25% covered under Exts.P7 to P10 orders. Now
the petitioner is challenging Exts.P3 to P6 orders of
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assessment issued under Section 17 D on the ground that
those assessment orders are issued in total violation of the
procedure contemplated under Section 17 D.
2. A Division Bench of this court in a batch of writ
petitions considered challenge against the validity of
Section 17 D of the KGST Act. Eventhough validity of
Section was upheld, the impugned assessment therein were
quashed with the following observations.
“Even though we have upheld the validity of
the statutory provisions, we are unable to uphold
the impugned assessments for the simple reason
that the none of the assessments challenged in
the Writ appeals or in the Writ petitions was
completed in accordance with the procedure
contemplated under section 17D. It is clear from
clause (g) of Section 17 D(2) that the team
constituted under section 17 (D) should fix the
venue and date of hearing and hold sitting to hear
the parties after issuing notice in advance to
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regard should be published in local media as well.
It is provided in Sub section (3)o f Section 17 D
that all assessments under Fast Track Method
should be unanimous decision signed by all team
members. It is very clear from the scheme that all
the team members should sit together, consider
the returns filed, accounts and records produced,
hear the parties or their representatives and
suggest proposal for assessment. If an
assessment by consent can be passed, then
assessment order should be passed in accordance
with the terms agreed in first sitting itself. The
assessments that could be completed in the first
sitting are cases where team of Assessing Officers
accept the returns filed or with such additions
which the party agrees. On the other hand, if
assessment is proposed in deviation with turnover
returned or against additions over and above if
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any agreed by the parties, then it is for the very
same team to issue pre-assessment notice
containing proposal for assessment and the same
should be signed by all of them. The party should
be given sufficient time to file objections and the
next date of public hearing by the committee
should be informed to the party. Assessment has
to be complete after hearing the party by team on
the objection filed to the pre-assessment notice
and in order to have a binding assessment, the
assessment should be one completed with
unanimous agreement of all the team members,
In fact, ex-parte assessment is contemplated only
when parties who are served notice informing the
venue and date of hearing fail to appear. Here
again, we are of the view that there is no harm in
giving one more opportunity, if the team of
officers feel that the party is not absenting
deliberately. Since in all these cases assessments
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are completed by issuing pre-assessment notice
by individual officers, we feel that the procedure
contemplated and stated by us above is not
strictly followed and so much so, orders passed
cannot be sustained under the provision of
Section 17 D. We, therefore allow the writ
appeals and writ petitions in part by vacating the
impugned assessment orders, but with direction
to the assessment team to complete the
assessment afresh under section 17 D within a
period of three months from the date of receipt of
copy of this judgment after issuing notice to all
parties and after hearing their objections. We
make it clear that each and every objection raised
by the parties in the reply to pre-assessment
notice should be considered and unanimous
decision should be taken by the team members.
We do not want to examine the other issues
raised in some of the cases like challenge against
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other statutory provisions, challenge against
penalty orders etc. These issues are left open. We
leave freedom to the parties to challenge the
penalty orders before statutory authorities
because those are not issued under section 17 D.
So far as challenge against other statutory
provision are concerned, we leave it open to the
parties to raise any such challenge, if required,
after completion of assessments afresh as stated
above”.
3. In view of the observations contained in the
Judgment of the Division Bench, which is quoted above, I
am of the opinion that the orders impugned in this writ
petition, Ext.P2 to P6, are unsustainable and they are liable
to be quashed. Accordingly I quash Exts.P2 to P6 orders.
The 2nd respondent is directed to issue fresh orders strictly
in compliance with the directions contained in the judgment
of the Division Bench as early as possible, at any rate within
a period of three months from the date of receipt of copy of
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this judgment.
4. Needless to say that the amount already paid by
the petitioner by virtue of Exts.P7 to P10 orders shall be
appropriated in accordance with the outcome of the fresh
assessment to be issued.
C.K. ABDUL REHIM
JUDGE
shg/