IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 3RD DECEMBER 2009 / 12TH AGRAHAYANA 1931 WP(C).No. 34721 of 2009(I) -------------------------- PETITIONER(S): --------------- JYOTHY LABORATORIES LIMITED, KADANASSERRY P.O., THRISSUR REPRESENTED BY ITS SENIOR OFFICER (ACCOUNTS)-T.V.THILAKAN. BY ADV. SRI.P.RAGHUNATH SRI.PREMJIT NAGENDRAN RESPONDENT(S): --------------- 1. ASSISTANT COMMISSIONER (ASSESSMENT), COMMERCIAL TAXES, SPECIAL CIRCLE, THRISSUR. 2. THE INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, THRISSUR. 3. DEPUTY COMMISSIONER (APPEALS), COMMERCIAL TAXES, ERNAKULAM. GOVERNMENT PLEADER SRI. V.K. SHAMSUDHEEN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03/12/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K.ABDUL REHIM, J. ------------------------------ W.P.(C).No.34721 OF 2009 ------------------------------ Dated this the 3rd day of December, 2009 J U D G M E N T ---------------------- 1. Challenge in this writ petition is against Ext.P5 order of the 3rd respondent by which the interim stay petition filed along with a statutory appeal was dismissed. With respect to the assessment pertaining to August 2009 the petitioner had filed Ext.P2 appeal before the 3rd respondent. Ext.P3 is the stay petition filed along with that appeal. The 3rd respondent had issued interim order granting stay, imposing condition for payment of 50% of the tax amount in dispute. The petitioner had challenged the said order in a writ petition before this court. This court had set aside the order and directed the 3rd respondent to reconsider the matter in the light of a decision rendered by the Sales Tax Appellate Tribunal in relation to assessment for the previous periods, and also in the light of the judgment of this court in OTA.9/07. Ext.P5 is the fresh order passed in compliance with the above said judgment. 2. In Ext.P5, interim stay was declined on finding that, a Division Bench of this court in the judgment in OTA.9/07 dt.6.4.2009 had declared that the commodity manufactured and W.P.(C).34721/09-I 2 marketed by the petitioner, “Ujala Supreme” and “Ujala Stiff and Shine” are classified under the residuary entry No:103 of SRO 82/2006, taxable @ 12.5%, on upholding clarification issued by the Commissioner of Commercial Taxes. Therefore it is found that the appeals deserve no merit. 3. The main dispute with respect to the assessments relates to the rate of tax applicable to the commodities dealt with by the petitioner. According to the petitioner the product will fall under Entry 155(8) (d) and Entry 118 of List A of the 3rd schedule of the KVAT Act and the rate of tax is only 4%. But according to the respondents the product will fall only under residuary entry No: 103 of SRO. 82/2006, and therefore taxable at 12.5%. The appellate Tribunal as per order in T.A.No:272 and 314 of 2008, dt.23.12.2008 held that the products are taxable only at 4%. A tax revision case filed by the State against the said decision is pending disposal before this court. At the same time the Commissioner of Commercial Taxes had issued clarification under Section 94 of the KVAT Act to the effect that the product is taxable at 12.5%. Challenge against the clarification issued by the Commissioner was negatived by a Division Bench of this court in the judgment in OTA.9/07. But that Judgment is now pending challenge before the Hon'ble Supreme Court in SLP W.P.(C).34721/09-I 3 filed by the petitioner. 4. It is submitted by the petitioner that there is no stay granted by the Hon'ble Supreme Court in the SLP pending, as well as there is no stay order issued by this court in the tax revision case filed against the order of Tribunal. Therefore, according to the petitioner, the order issued by the appellate Tribunal is holding the field at present. On the other hand learned Government Pleader contended that since the clarification issued under Section 94 has already been upheld by a Division Bench of this court, the dictum laid down therein is governing the field. 5. On an active consideration of the rival contentions, I am convinced that the dispute with respect to rate of tax still remains unsettled, pending consideration in various litigations. Eventhough a Division Bench of this court upheld the view adopted in the clarification order, the same is pending consideration in SLP before the Hon'ble Supreme Court. At the same time the decision of the appellate Tribunal taking a contrary view is also under challenge in a tax revision case. 6. However, without arriving at any finding regarding the dispute relating to the rate of tax, I am of the opinion that the appeal pending before the 3rd respondent can be directed to W.P.(C).34721/09-I 4 be disposed of, keeping in abeyance realisation of the tax amount due, on insisting condition for part payment. 7. Under the above circumstances Ext.P5 order is hereby quashed. The writ petition is disposed of directing the 3rd respondent to consider and pass orders on Ext.P2 appeal as early as possible, after affording an opportunity of hearing to the petitioner. The respondents are restrained from proceeding with recovery of the amounts covered under Ext.P1 order of assessment, till the disposal of the appeal, on condition of the petitioner remitting 1/3rd of the amount of tax in dispute within six weeks from today and on furnishing security for the balance amount. C.K.ABDUL REHIM, JUDGE. okb