IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 15TH SEPTEMBER 2010 / 24TH BHADRA 1932 WP(C).No. 28456 of 2010(F) -------------------------- PETITIONER(S): --------------- ALANNA ENTERPRISES, SYED MOHAMMED COMPLEX, EASWARA IYER ROAD, PULLEPPADY, ERNAKULAM, REPRESENTED BY ITS MANAGING PARTNER, SAJID RAHMAN THEKKAKKAM. BY ADV. SRI.R.MURALIDHARAN (AROOR) RESPONDENTS: --------------- 1. THE COMMERCIAL TAX OFFICER, 2ND CIRCLE, DEPARTMENT OF COMMERCIAL TAXES, ERNAKULAM, KOCHI - 15. 2. THE DEPUTY COMMISSIONER (APPEALS) COMMERCIAL TAXES, ERNAKULAM, KOCHI-15. 3. THE INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, ERNAKULAM, KOCHI-15. GOVERNMENT PLEADER SRI.C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 15/09/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K.ABDUL REHIM, J. W.P.C.NO.28456 of 2010 Dated this the 15th day of September 2010 J U D G M E N T Challenge in this writ petition is against Ext.P5 interim order issued by the second respondent on a stay petition filed along with an appeal which was filed against Ext.P3 order imposing penalty under Section 67 r/w 25(3) of the Kerala Value Added Taxes Act (KVAT Act). During pendency of the appeal and the stay petition, the petitioner had approached this Court on an earlier occasion. In Ext.P4 judgment, this Court directed the appellate authority to consider the stay petition and to pass orders thereon, and till then the recovery steps were stayed. 2. It is revealed from Ext.P5 that, eventhough the matter was posted for hearing on two occasions, pursuant to Ext.P4 judgment, the petitioner failed to appear. However, the second respondent had elaborately considered all the contentions raised in the appeal and after being satisfied that the petitioner could establish a prima facie case, the interim stay was granted. The petitioner is mainly aggrieved by the condition imposed in Ext.P5 for payment of 60% of the total amount of penalty. W.P.C.No.28456/10 2 3. With respect to interlocutory orders passed by statutory appellate authorities, this Court may not be justified in interfering, unless such orders are highly cryptic or unsustainable for lack of total advertence to the contentions or non-application of mind by the appellate authority. In the case at hand, on a perusal of the impugned order it is evident that, inspite of non- appearance of the petitioner, the appellate authority had elaborately considered the contentions. After proper application of mind to such contentions, the appellate authority found that a prima facie case for granting stay has been made out by the petitioner. 4. It is also not proper for this Court to interfere with conditions imposed, which is a matter coming within the discretion of the appellate authority. However, in the case at hand, there is no specific reason mentioned by the appellate authority to impose payment of 60%, which according to the petitioner, is highly onerous and unworkable. Going by the dictum laid by this Court in Supreme Electrical Engg. (P) Ltd. vs. Commercial Tax Officer (2008(3)KLT 805) it is necessary that the interim should reflect proper reasoning for imposing the W.P.C.No.28456/10 3 condition and reason as to why the assessee is not entitled for an absolute stay. 5. Having regard the fact that the amount in dispute is penalty imposed under Section 67 of the KVAT Act and also having regard to the fact that the appellate authority had arrived at a finding that there is a prima facie case established by the petitioner, I am inclined to interfere with the impugned order to the extent of reducing the rigor of the condition imposed. 6. In the result, the writ petition is disposed of modifying Ext.P5 to the extent of permitting the petitioner to pay 1/3rd of the amount in dispute, pending disposal of the appeal. It is made clear that if the petitioner makes payment of 1/3rd of the amount and furnishes security bond with respect to the balance amount within a period of two months from today, all further recovery steps shall be kept in abeyance till the disposal of the appeal pending before the second respondent. (C.K.ABDUL REHIM, JUDGE) jsr // True Copy// PA to Judge W.P.C.No.28456/10 4 W.P.C.No.28456/10 5 W.P.C.No.28456/10 6