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. 8295 of 2011(J) -------------------------------------- PETITIONER(S): ------------------------ M/S. ST. JOHNS UMBRELLA MART, THATHAMPALLY.P.O., ALAPPUZHA, REPRESENTED BY MANAGING PARTNER, DR. ABRAHAM THAYYIL, THAYYIL HOUSE, THATHAMPALLY.P.O., ALAPPUZHA. BY DR.K.B.MUHAMED KUTTY, SENIOR ADVOCATE, BY ADV. SRI.K.M.FIROZ. RESPONDENT(S): --------------------------- 1. THE COMMERCIAL TAX OFFICER I, FIRST CIRCLE, ALAPPUZHA - 687 001. 2. THE ASSISTANT COMMISSIONER(APPEALS), COMMERCIAL TAXES, KOLLAM - 693 001. R1 & R2 BY GOVERNMENT 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: Kss WPC.NO.8295/2011 J APPENDIX PETITIONER'S EXHIBITS: P1: COPY OF THE PENALTY ORDER AND DEMAND NOTICE ACCOMPANYING THE ORDER DTD. 30/12/2010. P2: COPY OF THE APPEAL PETITION DTD. 15/01/2011. P3: COPY OF THE STAY PETITION DTD. 15/01/2011. P4: COPY OF THE ORDER DTD. 28/02/2011. P5: COPY OF THE OBJECTION DTD. 11/12/2010 FILED BY THE PETITIONER BEFORE THE FIRST RESPONDENT. RESPONDENT'S EXHIBITS: N I L /TRUE COPY/ P.A.TO JUDGE Kss C.K.ABDUL REHIM, J. ------------------------------- W.P.(C).No. 8295 of 2011 ------------------------------- Dated this the 21st day of March, 2011. J U D G M E N T With respect to the assessment years 2005-06, the petitioner was imposed with penalty under section 67 of the Kerala Value Added Tax Act (KVAT Act). Aggrieved by the order imposing penalty, the petitioner had approached the statutory authority in appeal and pending disposal of the said appeal, the appellate authority had passed interim order insisting payment of 35% of the amount in dispute, and to furnish security for the balance. The said order was challenged before this Court in W.P.(C)No.6672 of 2011. This Court after considering merits of the contentions, directed the appellate authority for an early disposal of the appeal and the conditions stipulated in the interim order was modified to the extent of reducing the payment insisted to 25%. 2. Through Ext.P1 order, the 1st respondent had finalised assessment with respect to the above said years, 2 W.P.(C).No. 8295 of 2011 mainly based on the penalty imposed and the order of assessment was challenged in appeal before the 2nd respondent as evidenced from Ext.P2. Ext.P3 is the interlocutory application filed along with the appeal, seeking stay. It was disposed of by the 2nd respondent through Ext.P4 order. In Ext.P4, the second respondent had granted interim stay, subject to condition of the petitioner remitting 50% of the balance tax and on furnishing adequate security for the remaining amount. 3. According to the petitioner, Ext.P4 order is issued in a highly cryptic manner without proper application of mind and without due advertence to the grounds raised. It is contended that, the conditions stipulated is highly rigorous and is causing onerous liability on the petitioner. Hence the petitioner seeks interference of this Court to quash Ext.P4. 4. On a perusal of Ext.P4 it is evident that, the appellate authority had issued the interim order in a highly cryptic manner. Even though the main points urged at the 3 W.P.(C).No. 8295 of 2011 time of hearing were illustrated, the appellate authority had failed to consider the merits of those contentions. The interim order does not reflect any application of mind or any prima facie consideration of the merits of the grounds raised. It is settled law by this time that the appellate authorities are exercising quasi-judicial functions and they are expected to mention reasoning for granting interim reliefs. Under the above circumstances, I am of the view that, Ext.P4 is totally unsustainable in the eye of law. However, considering the fact that the appeal itself is pending consideration and disposal, in order to reduce multiplicity of proceedings, I am of the view that, interest of justice will be served if a direction is issued to the appellate authority to have disposal of the appeal on an early basis and till then to stay the recovery subject to condition to be imposed, which is of a less rigorous nature. 5. Therefore, the writ petition is allowed and Ext.P4 is hereby quashed. The 2nd respondent is directed to consider and pass orders on Ext.P2 appeal, after affording an 4 W.P.(C).No. 8295 of 2011 opportunity of hearing to the petitioner, as early as possible, at any rate within a period of 2 months from the date of receipt of a copy of this judgment. 6. Till such time, the appeal is disposed as directed above, recovery of amounts covered under Ext.P1 shall be kept in abeyance, subject to condition of the petitioner remitting 1/3rd of the tax amount and on furnishing security bond for the balance amount, within 2 weeks from the date of receipt of a copy of this judgment. C.K.ABDUL REHIM, Judge ami/