IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 21ST MARCH 2011 / 30TH PHALGUNA 1932 WP(C).No. 8701 of 2011(K) ------------------------- PETITIONER(S): --------------- M/S. S.M.S.BUILDERS, 28/103, SABARI GIRI, MAIN AVENUE ROAD, KOCHI-682 036, REPRESENTED BY ITS PARTNER SMT. SMITHA GUPTA. BY ADV. SRI.VIJAYAN. K.U. SRI.K.N.SREEKUMARAN RESPONDENT(S): --------------- 1. INTELLIGENCE OFFICER, SQUAD NO.VIII, COMMERCIAL TAXES, ERNAKULAM – 682 015. 2. ASSISTANT COMMISSIONER (APPEALS), O/O THE DEPUTY COMMISSIONER (APPEALS), COMMERCIAL TAXES, ERNAKULAM - 682 015. 3. INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, ERNAKULAM AT KAKKANAD – 682 030 . 4. STATE OF KERALA, REPRESENTED BY THE SECRETARY (TAXES), GOVT. SECRETARIAT, THIRUVANANTHAPURAM – 695 001. BY GOVT. PLEADER SRI.V.K.SHAMSUDHEEN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21/03/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K.ABDUL REHIM, J --------------------------------------- W.P(C) No.8701 of 2011-K ---------------------------------------- Dated this the 21st day of March, 2011. J U D G M E N T Ext.P12 interim order issued by the 2nd respondent appellate authority is under challenge in this writ petition. Against the order imposing penalty under Section 47(6) of the Kerala Value Added Tax Act (KVAT Act), the petitioner had preferred statutory appeal before the 2nd respondent. Ext.P12 is the interim order passed on the stay petition filed along with the appeal. The appellate authority had granted interim stay subject to condition of the petitioner remitting 50% of the total amount due and on furnishing security for the balance amount. 2. Contention of the petitioner is that the interim order was issued in a mechanical manner without advertance to any of the grounds raised in the appeal and without considering contentions raised by the petitioner in its real perspective. It is complaint that the appellate authority had failed in noticing merits of any such W.P(C) No.8701 of 2011-K 2 contentions and the condition was imposed in a mechanical manner without application of mind. It is the case of the petitioner that the penalty was imposed in a totally unsustainable manner and there was absolutely no proof regarding any attempt in evasion of payment of tax. 3. On a perusal of Ext.P12 it is evident that the appellate authority has not adverted to any of the grounds raised in the appeal memorandum nor any contention urged at the time of hearing. The appellate authority merely observed that the rival issue can be appreciated only on detailed verification of records. However, observing that the appellant could establish a prima facie case, the conditional stay was issued. 4. It is well settled legal position by this time that, the appellate authorities while granting interim relief are expected to issue reasoned orders enumerating consideration of the contentions and prima facie sustainability of such contentions. The appellate authorities are also expected to mention reasons for imposing W.P(C) No.8701 of 2011-K 3 conditions and also reasons as to why the appellants are not entitled for an absolute stay. 5. Going by the parameters as stated above, Ext.P12 order, in my opinion, is highly cryptic and non-speaking. No application of mind is reflected in the order and therefore the same is unsustainable in the eye of law, and is liable to be quashed. 6. However, considering the fact that the appeal itself is pending disposal before the authority, in order to avoid multiplicity of the proceedings, inspite of remitting the matter to the appellate authority for passing fresh orders, I am proposing to impose a condition of less rigorous nature with a direction to the appellate authority to have an early disposal of the appeal. 7. Accordingly, the writ petition is disposed of directing the 2nd respondent herein to consider and dispose of Ext.P10 appeal, after affording an opportunity of hearing to the petitioner as early as possible, at any rate, within a period of two months from the date of receipt of a copy of W.P(C) No.8701 of 2011-K 4 this judgment. 8. Till such time the appeal is disposed of, in modification of Ext.P12 order, the respondents are restrained from proceeding with recovery of amounts covered under the order imposing penalty, subject to condition of the petitioner remitting 1/4th of the amount covered thereunder and on furnishing security bond for the balance, within two weeks from the date of receipt of a copy of this judgment. C.K.ABDUL REHIM JUDGE ab