IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON THURSDAY, THE 20TH AUGUST 2009 / 29TH SRAVANA 1931 WP(C).No. 22153 of 2009(L) -------------------------- PETITIONER: --------------- KURUVITHADAM AGENCIES (P) LTD., MUVATTUPUZHA, REPRESENTED MATHEW GEORGE, DIRECTOR. BY ADV. MR. VIJAYAN. K.U. MR. K.N.SREEKUMARAN RESPONDENTS: --------------- 1. ASSISTANT COMMISSIONER, COMMERCIAL TAXES SPECIAL CIRCLE, PERUMBAVOOR, ERNAKULAM DIST. 2. STATE OF KERALA REPRESENTED BY SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, GOVERNMENT SECETARIAT, THIRUVANANTHAPURAM. BY GOVERNMENT PLEADER MR. C.K. GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20/08/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R. RAMACHANDRA MENON J. ~~~~~~~~~~~~~~~~~~~~~~~ W.P. (C) No. 22153 of 2009 ~~~~~~~~~~~~~~~~~~~~~~~ Dated, this the 20th day of August, 2009 JUDGMENT Ext. P5 order passed by the first respondent fixing the tax liability, disallowing the claim for trade discount and adding the escaped turn over, so as to fix the extent of tax, simultaneously imposing penalty under Section 67 by way of a 'composite order' has been subjected to challenge in the present Writ Petition. 2. Heard the learned Government Pleader as well, who, with reference to the statement filed on behalf of the first respondent submits that, the petitioner was given sufficient opportunity to file necessary statement of objections to the pre assessment notice, as well as the notice stated as issued with regard to the imposition of penalty under Section 67. In paragraph 2 of the said statement, it is stated that the notice was very much served on the petitioner and that they filed a reply objecting to the proposal. On the very next breath, the first respondent has added that the petitioner has not raised any objection with regard to the imposing of penalty. 3. Obviously Ext.P5 order only refers to a notice issued under Section 25 and no reference is made to any notice stated as issued under Section 67. That apart, sustainability of the proceedings has been brought under serious challenge, also stating that it is contrary to WP (C) No. 22153 of 2003 : 2 : the decision rendered by this Court in Priya Agencies Vs. CTO (2008) 14 VST 293 (Ker.). 3. Considering the facts and circumstances, this Court does not require any second thought to hold that Ext.P5 order passed by the first respondent, as a 'Composite Order' is not correct or sustainable. More so, in view of the fact that the penalty has been simply added as a matter of course. It has been made clear in binding judicial precedents that penalty cannot be imposed as a matter of course and that a specific finding has to be rendered, before imposing the same, as to the conscious act stated as pursued by the assessee, involving the violation. 4. In the above facts and circumstances, Ext.P5 order is set aside and the first respondent is directed to finalize the proceedings afresh; only after proper notice to the petitioner in accordance with law. As such, all further coercive steps stated as being pursued against petitioner, shall be kept in abeyance for the time being. The Writ Petition is disposed of accordingly. P. R. RAMACHANDRA MENON, JUDGE kmd