IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 25TH NOVEMBER 2010 / 4TH AGRAHAYANA 1932 WP(C).No. 34306 of 2010(K) ----------------------------------------- PETITIONER(S): ------------------------- A.JAYAKANNAN, 4/14,GANDHI NAGAR JAGIR AMMAPALAYAM, SALEM, TAMILNADU. BY ADVS. SRI.S.SANTHOSH KUMAR, SMT.P.LISSY JOSE. RESPONDENT(S): --------------------------- 1. STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT , TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM. 2. THE INTELLIGENCE INSPECTOR, COMMERCIAL TAXES, SQUAD NO.1, KOLLAM 691 021. R1 & R2 BY SR. GOVERNMENT PLEADER SRI. C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 25/11/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.34306 of 2010 ------------------------------------------- Dated this the 25th day of November, 2010 J U D G M E N T ---------------------- Petitioner claims to be a manufacturer and dealer in silver articles having registration under the provisions of the Tamilnadu Value Added Tax Act as well as the Central Sales Tax Act. On 20.10.2010 the petitioner was taken into custody by the Railway Police at the Railway Station, Kollam, having been found with possession of old silver ornaments. The goods in question were handed over to the 2nd respondent, who in turn had initiated proceedings under Section 47 of the Kerala Value Added Tax Act, 2003 (KVAT Act) on issuing Ext.P5 notice proposing action under Section 47(8) for seizure and confiscation of the silver ornaments. 2. On receipt of Ext.P5 the petitioner submitted Ext.P6 objections. According to the petitioner, the Registration Certificates and PAN card of the petitioner were produced before the 2nd respondent. But the 2nd respondent further issued a revised notice as per Ext.P7 proposing action under Section 47(16) of the KVAT Act, on the basis of an allegation that the petitioner declined to disclose the real owner of the W.P.(C).34306/10- -2- goods, with any supporting evidence. Ext.P8 is the objection filed by the petitioner to Ext.P7 notice. The 2nd respondent had finalised the proceedings and issued Ext.P9 proceedings ordering seizure and confiscation of the silver ornaments. 3. According to the petitioner, Ext.P9 order is unsustainable in the eye of law since it was issued in violation of principles of natural justice. It is specifically contended that after filing of Ext.P8 objections, the petitioner was not heard in the matter and he was not afforded with any opportunity to produce documents in support of the claims. Learned Government Pleader submitted that in fact the petitioner was heard on 26.10.2010 after issuing Ext.P5 notice on the basis of Ext.P6 objections. It is further submitted that a detailed statement of the petitioner was recorded when he appeared in person along with two others. But according to learned counsel for the petitioner, the 2nd respondent had not pursued any action on the basis of Ext.P5. On the other hand, a fresh notice was issued proposing action under Section 47(16). It is contended that if he would have afforded with an opportunity of hearing, he could have produced the registration certificate issued under the Central Sales Tax Act and could have convinced the authority that the articles found in possession belongs to himself and that he was carrying those articles in pursuance of trade conducted. W.P.(C).34306/10- -3- 4. Considering the facts and circumstances, I am of the view that after issuing Ext.P7 notice and after receiving Ext.P8 objections, the 2nd respondent had not afforded any opportunity of hearing to the petitioner. Since the proceedings under Section 47(16) is in the nature of a penal action, for compliance of natural justice, affording of opportunity for personal hearing is mandatory. Since no such opportunity was afforded to the petitioner before finalising the proceedings, I am of the view that such order is unsustainable in the eye of law. Therefore, in my considered opinion the matter need be remitted back to the 2nd respondent, for finalising the matter afresh, after affording opportunity of hearing to the petitioner. 5. In the result Ext.P9 is hereby quashed. The 2nd respondent is directed to pass fresh orders after affording opportunity of personal hearing to the petitioner. Needless to say that the petitioner shall be afforded with an opportunity to produce documents in support of his claims. A decision in this regard shall be taken by the 2nd respondent, as early as possible, at any rate within a period of one month from the date of receipt of a copy of this judgment. C.K.ABDUL REHIM, JUDGE. okb