IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 22ND DECEMBER 2010 / 1ST POUSHA 1932 WP(C).No. 38030 of 2010(C) ----------------------------------------- PETITIONER(S): ------------------------- 1. C.GOPINATHAN NAIR,AGED 69 YEARS, S/O.LATE A.K.NAIR,C-18/27,SAISADAN, KULUWATHURMEDU,PALAKKA-678 013. 2. KRISHNAKUMAR NAIR,AGED 43 YEARS, S/O.C.GOPINATHAN NAIR,C-18/27,SAISADAN, KULUWATHURMEDU,PALAKKAD-678 013. BY ADVS. SRI.SHAJI P.CHALY, SMT. JASMIN ABY MATHEWS, SRI.SANJITH R., SMT. ROSHNI.H., SMT. LIJITTA.G.MATHEWS. RESPONDENT(S): ---------------------------- 1. STATE OF KERALA REPRESENTED BY ITS SECRETARY,TAXES DEPARTMENT,SECRETARIAT, THIRUVANANTHAPURAM-1. 2. THE COMMERCIAL TAX OFFICER,II CIRCLE, PALAKKAD. R1 & R2 BY SR. GOVERNMENT PLEADER SRI. C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 22/12/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.38030 of 2010 ------------------------------------------- Dated this the 22nd day of December, 2010 J U D G M E N T ---------------------- The petitioners were Directors of a company incorporated, M/s. Malanad Cements and Allied Products (Pvt.) Ltd. According to them they resigned from directorship of the company with effect from 1.2.2004 and thereafter that they have no connection at all with the activities of the company. Ext.P1 is the statutory intimation filed in the prescribed form before the Registrar of Companies with respect to change of Directors. It is stated that the transfer of shares of the company was duly intimated to the 2nd respondent, who is the assessing authority under the Kerala Value Added Tax Act, 2003 (KVAT Act) as well as under the Kerala General Sales Tax Act (KGST Act). But the petitioners were issued with Ext.P3 to P5 notices under Section 19C of the KGST Act and 26(a) of the KVAT Act, proposing assessment against them. Ext.P6 to P8 are the objections filed by the petitioners to the above said notices. Subsequently, fresh notices were issued by the W.P.(C).38030/10 -2- 2nd respondent as per Ext.P9 to P11 proposing assessment under Section 19C & 17(3) of the KGST Act and Section 26(a) of the KVAT Act. On receipt of such notices the petitioner had again submitted Ext.P12 common reply, stating that the petitioners have no liability in view of transfer of shares of the company. According to the petitioners, assessment against the company, with respect to the years 2000-'01 to 2002-'03, stand completed as evidenced from Ext.P13. It is further submitted that the petitioners came to understand that the 2nd respondent had already initiated action against the present Directors of the company under the aforesaid provisions to complete the assessments. Under such circumstances the impugned notices are unsustainable, is the contention. 2. I do not find any lack of jurisdiction with respect to issuance of the impugned notices. The sustainability of such notices need be appreciated on the basis of objections filed by the petitioners taking note of various factual aspects. Under such circumstances, I am of the opinion that it is highly premature for this court to interfere with the steps initiated by issuing the impugned notices. It is pertinent to note that the petitioners had already submitted objections against the W.P.(C).38030/10 -3- proposal, as evidenced from Ext.P12. Apprehension of the petitioners is that the 2nd respondent may finalise the assessment without considering such objections and without affording any reasonable opportunity to the petitioners. I do not find any basis for such an apprehension. It goes without saying that the 2nd respondent is at an obligation to consider the objections and to afford adequate opportunity to the petitioners to substantiate the contentions raised through such objections. It is incumbent on the part of the 2nd respondent to afford proper opportunity to the petitioners for production of documents if any in support of such contentions and also for personal hearing. Needless to say that a decision on the basis of the impugned notices will be taken by the 2nd respondent, only after proper compliance of the procedural requirements as stated above. 3. Under the above circumstances the writ petition is disposed of reserving liberty to the petitioners to pursue the objections submitted against the proposal notices, before the 2nd respondent. C.K.ABDUL REHIM, JUDGE. okb