IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON TUESDAY, THE 8TH JUNE 2010 / 18TH JYAISTHA 1932 WP(C).No. 15700 of 2010(J) -------------------------- PETITIONER: --------------- BEENA BALAN, PROPRIETOR, UNIVERSAL TYRES & DISTRIBUTORS, KUNNAMPURAM, THIRUVANANTHAPURAM. BY ADV. MR.PREMJIT NAGENDRAN SMT.K.B.SUBHAGAMANI RESPONDENTS: --------------- 1. THE INTELLIGENCE OFFICER, SQUAD NO.III, COMMERCIAL TAXES, THIRUVANANTHAPURAM AT NEYYATINKARA. 2. THE DEPUTY COMMISSIONER (APPEALS), COMMERCIAL TAXES, THIRUVANANTHAPURAM. R1 &2 BY GOVERNMENT PLEADER MR.C.K. GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08/06/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R.RAMACHANDRA MENON, J -------------------------------------------- WP(C) NO. 15700 OF 2010 -------------------------------------------- Dated this the 8th day of June, 2010 JUDGMENT The petitioner is challenging the correctness and sustainability of Ext.P7 interim order passed by the 2nd respondent, whereby the petitioner has been directed to satisfy 50% of the disputed liability towards the penalty imposed, so as to avail the benefit of interim stay during the pendency of the appeal. 2. The sequence of events as narrated in the Writ Petition shows that the petitioner being aggrieved of the penalty imposed under Section 67 of the Kerala Value Added Tax Act, has preferred Ext.P5 appeal before the 2nd respondent mainly contending that, the concerned officer who passed the assessment order had not actually heard the petitioner, nor had he verified the books of accounts. The petitioner in fact had appeared, in response of the notice, before some other officer and this being the position, there is total violation of all the known principles of natural justice, which accordingly has been highlighted in paragraph 2 of the Ext.P5 memorandum of appeal. The learned counsel for the petitioner also brought it to the notice of this Court, that the challenge raised as above, has been specifically taken note of by the second respondent while passing Ext.P7, but absolutely no discussion has been made as to the merits of the case or as to the consequences, but for simply observing that the petitioner had made a request to satisfy the 2 WP(C) No. 15700/2010 'compounding fee' not exceeding Rs.1 lakh and that she has not challenged the fixation of the tax liability which made the said authority to direct the petitioner to deposit 50% of the disputed penalty. 3. The learned Government Pleader for the respondents, with reference to the contents of the statement submits that the discrepancy pointed out from the part of the petitioner as to the date and the proceedings contained in the order imposing the penalty are only trivial clerical errors. However, it is admitted that the concerned officer by name 'Mathew Samuel' who was holding the office of the Commercial Tax Officer (Audit and Assessment) on deputation of the Intelligence Wing had processed the crime file of the petitioner. Later, when he was subsequently transferred from the said office, the crime file was left in the disposal of the Intelligence officer squad No. 3, Thiruvananthapuram. This by itself shows that, there is some force in the submissions/contentions raised in the part of the petitioner. However, it is pointed out from the part of the learned Government Pleader that the petitioner was never prepared to have the offence compounded in accordance with relevant provisions of law, particularly under Section 17 (4) and that the petitioner was insisting that the request to have the offence compounded for an amount not exceeding one lakh be sent to higher authority for getting permission; which cannot be the proper course under any circumstance. However, the fact remains that the 2nd respondent passed Ext.P7 order fixing the liability to the extent of 50% without proper discussion as to be course and consequences projected from the part 3 WP(C) No. 15700/2010 of the petitioner as mentioned hereinbefore. 4. Now the only question is whether the 2nd respondent is to be directed to consider the interlocutory application for stay (Ext.P6) afresh or whether the appellate authority could be directed to finalise and consider the appeal in accordance with law, particularly in the light of the nature of the contentions raised from either side. After going through the materials on record and after hearing both the sides, this Court finds it fit and proper to direct the 2nd respondent to consider Ext.P5 appeal on merits and to have it finalized in accordance with law, and it is ordered accordingly. This shall be done as expeditiously as possible, at any rate, within two months from the date of receipt of a copy of this judgment. 5. Considering the facts and circumstances, this Court also finds that the petitioner can be given the benefit of interim stay till the finalization of the proceedings as above, on condition that the petitioner satisfies a total sum of Rs.2,00,000/- (Rupees Two lakhs only) and furnishes security for the balance disputed liability within three weeks. Subject to this, the recovery proceedings, if any, shall stand kept in abeyance. The Writ Petition is disposed of accordingly. P.R.RAMACHANDRA MENON JUDGE dnc