IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 16TH DECEMBER 2009 / 25TH AGRAHAYANA 1931 WP(C).No. 36381 of 2009(P) ------------------------------------- PETITIONER(S): ----------------------- E.FAIZAL (PROPRIETOR), EDAPPAYIL SANITATIONS, H.S.ROAD, KOPPAM, PALAKKAD DISTRICT. BY ADVS.MR.V.P.SUKUMAR MR.KURYAN THOMAS RESPONDENT(S): -------------------------- 1. THE INTELLIGENCE OFFICER, SQUAD NO.1, COMMERCIAL TAXES, PALAKKAD. 2. THE DEPUTY COMMISSIONER (APPEALS), COMMERCIAL TAXES, ERNAKULAM. 3. THE INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, PALAKKAD. BY GOVT. PLEADER MR.C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 16/12/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: tss C.K.ABDUL REHIM, J. ------------------------------ W.P.(C).No.36381 OF 2009 ------------------------------ Dated this the 16th day of December, 2009 J U D G M E N T ---------------------- 1. Ext.P2 order imposing penalty under Section 44(8) read with Section 44 (10) of the Kerala Value Added Tax Act, 2003 (KVAT Act) is under challenge before the 2nd respondent appellate authority, in Ext.P3 appeal filed by the petitioner. Petitioner had also filed Ext.P4 stay petition along with the appeal. Grievance of the petitioner is that without considering pendency of the appeal coercive steps of recovery is now being pursued, on issuing Ext.P5 notice. 2. Contention of the petitioner is that the penalty is imposed on a presumptive manner based on the provisions in Section 44(10) of the KVAT Act, without verification of the books of accounts. It is pointed out that a Division Bench of this court in the decision in Sajeev Vs. Intelligence Officer (2009 (4) KLT 601) observed as follows: “As already stated, eventhough penalty under Section 44(8) read with Section 44(10) is mandatory, by virtue of the above referred discretionary powers conferred on the officer, a dealer is given opportunity to state emergency which led to his keeping the goods in undeclared godown without prior intimation and if he proves it and if such goods were found accounted, then the same should certainly be W.P.(C).36381/09-P 2 taken into account by the Inspecting Officer while levying penalty. In other words, by applying the fiction alone under Section 44(10), the officer cannot levy maximum penalty at half the value of the goods under Section 44(8), if the dealer proves the extreme circumstances that led to his storage of goods in undeclared godown and that the goods are accounted.” Therefore imposition of the maximum penalty was totally unwarranted, since the stock detected was the stock properly accounted by the petitioner, is the contention. 3. Since the statutory appeal along with the stay petition is pending consideration and disposal before the appellate authority, I am not entering upon any fining regarding merits of the contentions against the order of penalty. It is for the appellate authority to consider all such contentions, taking note of the decision of this court cited supra, while dealing with the appeal as well as while disposing the interlocutory application for stay. 4. Under the above circumstances the writ petition is disposed of directing the 2nd respondent to consider and pass orders on Ext.P4 stay petition filed along with the appeal, after affording an opportunity of hearing to the petitioner, as early as possible, at any rate within a period of one month from the date of receipt of a copy of this judgment, taking note of the above observations. W.P.(C).36381/09-P 3 5. The respondents are directed to keep in abeyance realisation of the amounts covered under the impugned order of penalty, which is now sought to be recovered on issuing Ext.P5 revenue recovery notice, till orders are passed by the 2nd respondent as directed above. 6. The 2nd respondent is also directed to dispose of the appeal at the earliest, thereafter. C.K.ABDUL REHIM, JUDGE. okb