IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 9TH NOVEMBER 2010 / 18TH KARTHIKA 1932 WP(C).No. 33586 of 2010(W) -------------------------- PETITIONER: ------------------ WHIRPOOL OF INDIA LTD, 23/61A., HN 47,SOUTH KALAMASSERRY,683104,COCHIN, REPRESENTED BY ITS BRANCH COMMERCIAL MANAGER MR.ASHOK P. BY ADV. SMT.K.LATHA RESPONDENTS: ---------------------- 1. THE STATE OF KERALA,REP.BY CHIEF SECRETARY,SECRETARIAT,THIRUVANANTHAPURAM-1 2. ASSISTANT COMMISSIONER(ASSMT) COMMERCIAL TAXES,SPECIAL CIRCLE-II ERNAKULAM - 682019 3. INTELLIGENCE INSPECTOR, SAUAD NO.1,COMMERCIAL TAXES, ERNAKULAM- 682021. 4. DEPUTY COMMISSIONER(APPEALS) COMMERCIAL TAXES, ERNAKULAM- 682021. BY SENIOR GOVERNMENT PLEADER, SRI.C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09/11/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: VK C.K. ABDUL REHIM, J ------------------------------ WP(C) NO. 33586 OF 2010 --------------------------------------- Dated this the 9th day of November, 2010 JUDGMENT Aggrieved by Ext.P5 order imposing penalty under Section 47 (6) of the Kerala Value Added Tax Act, 2003 (KVAT Act), the petitioner had preferred appeal before the 4th respondent as evidenced from Ext.P6. Along with the appeal, the petitioner had filed Ext.P7 interlocutory application seeking stay of realisation of the amount of penalty, pending disposal of the appeal. It is stated that 50% of the amount was furnished as Bank Guarantee at the time of release of the detained transport and the petitioner is seeking stay only with respect to the balance 50%. Through Ext.P8 order issued by the 4th respondent the application for interim stay was dismissed. This Writ Petition is filed challenging by Ext.P8 order. 2. According to the petitioner, dismissal of the interlocutory application was totally unreasonable and 2 WP(C) No. 33586/2010 unjustified. It is contended that the petitioner had made out a prima facie case regarding un-sustainability of the order of penalty. According to the petitioner there is a far chance of the appeal being allowed. Under the above circumstances, dismissal of the stay petition and insistence for payment of the entire amount is highly unjustifiable, is the contention. It is contended that the order was issued in a mechanical manner without proper application of mind and proper advertance to the ground raised in the appeal. 3. On a perusal of Ext.P8 order, it is revealed that the 4th respondent had illustrated all the grounds raised in the appeal, and on consideration of such contentions that authority had arrived at a conclusion that the transport in question was not accompanied by valid documents and in the absence of relevant records in support of the transaction there was an attempt on the part of the petitioner in evasion of payment of tax. Hence it is observed that the petitioner had failed to establish prima 3 WP(C) No. 33586/2010 facie case for granting conditional stay. 4. I am of the opinion that the question whether there was any attempt at evasion of payment of tax is a matter which need be considered elaborately on the basis of documents and other evidences to be pursued at the time of disposal of the appeal. It is not proper for the authority to arrive at a final conclusion regarding merits of the appeal at the time of disposal of the interim application. I find merit in the contention of the petitioner that if they are compelled to make payment of the entire amount of penalty, the proceedings in the appeal itself will become virtually ineffective, and the purpose of the appeal will be defeated. 5. Having considered the fact that 50% of the amount has already been recovered, I am of the view that a direction for an early disposal of the appeal by the 4th respondent keeping the recovery steps in abeyance, will only be reasonable in order to meet the ends of justice. 6. Therefore the Writ Petition is disposed of 4 WP(C) No. 33586/2010 directing the 4th respondent to consider and pass orders on Ext.P6 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 this judgment. 7. Till such time orders are passed on the appeal, recovery of the balance 50% of the penalty imposed, shall be kept in abeyance, provided the petitioner furnishes security bond without sureties for the said amount, within a period of two weeks from the date of receipt of a copy of this judgment. C.K. ABDUL REHIM JUDGE dnc