IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 24TH FEBRUARY 2011 / 5TH PHALGUNA 1932 WP(C).No. 5182 of 2011(W) --------------------------------------- PETITIONER(S): ----------------------- MOHAMMED HASHIM. A.A, PROPRIETOR, CLASSIC METALS, PUTHIYA ROAD, PALARIVATTOM, KOCHI- 682 025. BY ADV. SRI.B.RAGUNATHAN, SRI.M. SALIM, SRI.R. SRINATH, SRI.K. SURENDRAN (PARASSALA), SRI.VIPIN VARGHESE. RESPONDENT(S): ---------------------------- 1. DEPUTY COMMISSIONER (APPEALS), DEPARTMENT OF COMMERCIAL TAXES, ERNAKULAM, KOCHI- 682 015. 2. INTELLIGENCE OFFICER (IB), OFFICE OF THE DEPUTY COMMISSIONER (INTELLIGENCE) DEPARTMENT OF COMMERCIAL TAXES, EDAPPALLY, ERNAKULAM, KOCHI- 682 024. 3. COMMERCIAL TAX OFFICER, II CIRCLE, KALAMASSERY, ERNAKULAM, KOCHI -683 104. 4. INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, ERNAKULAM, KOCHI -682 030. R1 TO R4 BY GOVT. PLEADER MR.C.K. GOVINDAN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24/02/2011,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs C.K.ABDUL REHIM,J. ------------------------------- WP(C).NO. 5182 of 2011 --------------------------------- Dated this the 24th day of February, 2011 JUDGMENT Aggrieved by Ext.P1 order imposing penalty under section 67 of the KVAT Act, the petitioner had filed statutory appeal before the 1st respondent as per Ext.P2. Along with the appeal the petitioner had filed application seeking stay of the collection of the disputed amount of penalty, pending disposal of the appeal. Through Ext.P9 order the 1st respondent granted interim stay, subject to condition of the petitioner remitting 50% of the amount of penalty and on furnishing security bond for the balance amount. 2. According to the petitioner, the above said condition was imposed in a mechanical manner without proper application of mind. The contentions raised by the petitioner regarding the alleged misclassification has not been property adverted to the appellate authority, is the submission. Eventhough it is mentioned by the appellate authority that sustainability of various contentions can be appreciated only after verification of the books of accounts and other evidence, insistence for WP(C) .5182/2011 2 payment of 50% was made, without mentioning any specific reason. Therefore the petitioner is assigning Ext.P9 order to the extent of the condition stipulated therein. 3. Heard; learned Government Pleader appearing on behalf of the respondents. On a perusal of Ext.P9 it is evident that the appellate authority had illustrated all the main contentions raised in the appeal. After adverting to such contentions it is observed that, the petitioner had established a prima facie case for granting conditional stay. The appellate authority has not discussed about sustainability of the contentions, even on a prima facie basis and there is no reasoning mentioned with respect to imposition of a condition insisting payment of 50% . 4. Learned counsel appearing for the petitioner submits that, the rigorous nature of the condition imposed will work out in causing severe prejudice to the petitioner and there is a fair chance of the appellate authority allowing the appeal if the matter is heard in detail and if the records are produced. 5. While considering merits of the order impugned I notice that imposition of a condition after granting interim stay is a matter coming within the discretion of the appellate authority. WP(C) .5182/2011 3 But in the case at hand the appellate authority had not mentioned any specific reason for imposing payment of 50%. Hence I am of the view that the interim order cannot be sustained. But I am not proposing to remand the matter for fresh disposal of the interim application. On the other hand, interest of justice will be served if the appellate authority is directed to dispose of the appeal on an early basis and till then to stay the recovery subject to imposition of a condition which is less rigorous in nature. 6. Accordingly, the writ petition is disposed of directing the 1st respondent to consider and dispose of Ext.P2 appeal after 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. In modification of Ext.P9 order it is directed that the respondent shall keep in abeyance recovery of amounts covered under Ext.P1 till the disposal of the appeal, subject to condition of the petitioner remitting 1/4th of the amount of penalty imposed and on furnishing security for the balance amount within two weeks from the date of receipt of a copy of this judgment. C.K.ABDUL REHIM,JUDGE pmn/ WP(C) .5182/2011 4