IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 9TH SEPTEMBER 2010 / 18TH BHADRA 1932 WP(C).No. 27032 of 2010(D) ----------------------------------------- PETITIONER(S): ------------------------- M/S.SREECHAKRA LIVING SPACE, "GOVIND" THRIPUNITHURA, REPRESENTING BY MANAGING PARTNER K.R.SATHEESAN. BY ADVS. SRI.V.A.SASIDHARAN, SRI.T.M.CHANDRAN, SRI.JOSEPH ALBIN NEDUNTHALLY. RESPONDENT(S): ----------------------------- 1. THE INTELLIGENCE OFFICER, SQUAD V., OFFICE OF THE IAC (INTELLIGENCE) COMMERCIAL TAXES, ERNAKULAM - 31. 2. THE INTELLIGENCE OFFICER, SQUAD I, OFFICE OF THE IAC (INTELLIGENCE), COMMERCIAL TAXES, ERNAKULAM - 31. R1 & R2 BY GOVERNMENT PLEADER SRI. C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09/09/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss C.K.ABDUL REHIM, J. -------------------------------------- W.P.(C).No.27032 of 2010 -------------------------------------- Dated this the 9th day of September, 2010 J U D G M E N T ---------------------- The petitioner is challenging Ext.P6 notice issued by the 1st respondent proposing to impose penalty on the petitioner under Section 67 of the Kerala Value Added Tax Act, 2003, on the basis of an allegation regarding violation of Section 67(a)(b)(c) and (j) of the KVAT Act and consequential evasion of tax to the tune of Rs.1,03,125/- and Rs.1,96,875/- for the years 2005-06 and 2006-07 respectively. The proposal for imposing penalty was issued consequent to an inspection conducted at the place of business of the petitioner on 16.3.2007 and on recovery of some incriminating records relating to business transactions of the petitioner. 2. Contention of the petitioner is that Ext.P6 is totally unsustainable. The petitioner points out that on an earlier occasion proposal for imposing penalty was issued based on an inspection conducted on 5.12.2006, for W.P.(C).27032/10 -2- imposing the very same amount of penalty based on the very same set of allegations. When Ext.P4 notice was issued, the petitioner submitted Ext.P5 objection, as early as on 7.4.2007. But thereafter the matter was not pursued further, presumably because the 2nd respondent was convinced of the explanations. According to the petitioner, issuance of a further notice on the very same set of allegations by another officer is highly irregular and the same will put the petitioner to irreparable legal injuries and prejudices. 3. Learned Government Pleader appearing for the respondents submitted that pursuant to an administrative order issued by the Deputy Commissioner having jurisdiction, the files pertaining to Ext.P4 notice was transferred to the 1st respondent and Ext.P6 notice was issued afresh by the 1st respondent since that authority is now in seisin of the matter. 4. Learned counsel for the petitioner submits that the inspection was on 5.12.2006 and there was no inspection conducted on 16.3.2007, as mentioned in Ext.P6. It is further contended that at the time when the inspection was conducted on 5.12.2006 the petitioner had only started the business and applied for registration. Even the building permit with respect W.P.(C).27032/10 -3- to construction of the residential flats was not obtained at that time. The Books of Accounts revealed only receipts of some advances from proposed buyers. The petitioner was not at all liable for payment of any tax at that time, is the contention. It is further submitted that, subsequently the registration was granted and the petitioner was permitted to pay tax at the compounded rates as per Section 8. The petitioner had already paid the entire tax amounts due till 30.6.2010 in accordance with the compounding permitted. That being so, the proceedings now being pursued by the 1st respondent is totally unwarranted and there is no circumstance existing for imposition of penalty under Section 67(1), is the contention. 5. It is pertinent to note that, the impugned notice is only a proposal for imposing penalty, alleging certain offences committed by the petitioner. It is for the petitioner to submit proper objections against such proposal and to produce documents if any in support of contentions raised against such allegations. It is for the authority concerned to take a decision on the basis of such objections after adverting to the Books of Accounts and other documents, at the first instance. In exercise of jurisdiction under Article 226 this court is not supposed to W.P.(C).27032/10 -4- venture upon any such adjudication which involve appreciation of disputed factual aspects, for arriving at any conclusions on the merits of the allegations. Further, the scheme of the statute contemplates a hierarchy of officials to consider such aspects. 6. Therefore, I am of the opinion that the challenge against Ext.P6 at this stage need not be entertained. Only because Ext.P4 notice was issued on an earlier occasion and only because the petitioner had submitted objections to such proposals the 1st respondent could not be restrained from finalising the matter on issuing fresh notice, since it is evident that the files were transferred to another authority in the administrative exigencies of the department. 7. Under the above circumstances the writ petition is dismissed reserving liberty to the petitioner to approach the 1st respondent by filing objections to Ext.P6 proposal. If any objection is filed to Ext.P6 within a period of two weeks from the date of receipt of a copy of this Judgment, the same shall be considered by the 1st respondent and the petitioner shall be afforded with a reasonable opportunity for production of records as well as for personal hearing, before finalising the matter. 8. Needless to say that the 1st respondent shall also take W.P.(C).27032/10 -5- note of the circumstances under which Ext.P4 notice was issued and Ext.P5 objections were filed by the petitioner on an earlier occasion. It is further observed that if any order prejudicial to the petitioner is issued, the same shall be communicated and the petitioner shall be afforded with reasonable time to invoke appellate remedies against such order, before proceeding with recovery of amount if any imposed. C.K.ABDUL REHIM, JUDGE. okb