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. 7945 of 2011(P) ------------------------- PETITIONER(S): --------------- M/S.NEW EMERALD AGENCIES, BASIN ROAD, ERNAKULAM, REPRESENTED BY A.C. ABDUL RASHEED, MANAGING PARTNER. BY ADV. SRI.HARISANKAR V. MENON, SMT.MEERA V.MENON, SRI.MAHESH V.MENON. RESPONDENT(S): -------------------------- 1. COMMERCIAL TAX OFFICER, 2ND CIRCLE, ERNAKULAM. PIN-682 013. 2. DEPUTY COMMISSIONER (APPEALS), DEPARTMENT OF COMMERCIAL TAXES, ERNAKULAM, PIN-682 013. 3. INSPECTING ASST. COMMISSIONER, DEPARTMENT OF COMMERCIAL TAXES, KAKKANAD, ERNAKULAM, PIN-682 030. R1 TO R3 BY GOVT. PLEADER MR.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: rs C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.7945 of 2011 ------------------------------------------- Dated this the 21st day of March, 2011 J U D G M E N T ---------------------- Ext.P8 interlocutory order passed by the 2nd respondent on a stay petition filed along with Ext.P4 appeal, is under challenge in this writ petition. The appellate authority insisted upon the petitioner to make payment of 50% of the total amount due as per the demand and also to furnish Security Bond for the balance amount. It is revealed that, the assessment was completed based on an enquiry report received from the Intelligence Officer, in which suppression of turnover was detected. It is also noticed that the offence alleged was compounded under Section 74 of the Kerala Value Added Tax Act, 2003 (KVAT Act) and the petitioner was permitted to make payment of the compounding fee, to the tune of Rs.4 lakhs. However, the order of compounding was subsequently challenged in a revision, which is stated to be pending disposal before the 2nd respondent. While finalising the assessment the assessing authority had added equal amount of the suppressed turnover detected, towards probable omissions and suppressions. 2. Contention of the petitioner is that, the condition W.P.(C).7945/11 -2- imposed by the appellate authority for payment of 50% is highly arbitrary and unreasonable. Such a condition was imposed without proper application of mind and without due advertence to the grounds raised in the appeal, is the contention. It is contended that the appellate authority had failed to take note of the fact that the petitioner had challenged the order of compounding and a revision filed in this regard is pending disposal. Further contention of the petitioner is that the impugned interim order was issued without affording a reasonable opportunity of hearing to the petitioner. It is stated that eventhough there is mention to the effect that the appellant was heard, in fact no such hearing was conducted. Therefore the petitioner seeks interference of this court in setting aside the condition stipulated in Ext.P8. 3. On a perusal of the impugned interim order of the appellate authority, it is revealed that there is proper advertence made with respect to the main grounds raised in the appeal. After considering those contentions the appellate authority found that the assessment is prima facie sustainable under law and the additions made by the assessing authority in accordance with the suppression of turnover detected, is in no way excessive. However, considering the contention that the further addition over and above the suppressed turnover was not warranted, the W.P.(C).7945/11 -3- appellate authority found that there is a prima facie case established for granting conditional stay. While evaluating contents of the impugned order, I am of the considered opinion that the order could not be termed as one issued without application of mind or without advertence to the grounds raised. 4. However, it is noticed that no specific reasoning is mentioned by the appellate authority for insisting payment of 50% of the amount due. Going by the dictum laid by this court in Supreme Electrical Engg. (P) Ltd. Vs. Commercial Tax Officer (2008 (3) KLT 805) the appellate authority is at an obligation to mention proper reasoning as to why the appellant is not entitled for an absolute stay. However, contention of the petitioner is that the insistence for payment of 50% is highly rigorous and it causes onerous liability on the petitioner, putting the same as unworkable to comply with. 5. While considering the facts and circumstances I am of the considered opinion that interest of justice will be served if the appellate authority is directed to have an expeditious disposal of the appeal itself, subject to imposition of a less rigorous condition, in the meanwhile. This is mainly intended to avoid multiplicity of proceedings. 6. Therefore the writ petition is disposed of directing the 2nd respondent to consider and dispose of Ext.P4 appeal, after W.P.(C).7945/11 -4- 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 the appeal is disposed of, in modification of Ext.P8 order, recovery of the amounts in dispute shall be kept in abeyance subject to condition of the petitioner remitting 1/3rd of the total amount due and on furnishing Security Bond for the balance amount, within two weeks from the date of receipt of a copy of this judgment. C.K.ABDUL REHIM, JUDGE. okb