IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON MONDAY, THE 1ST FEBRUARY 2010 / 12TH MAGHA 1931 WP(C).No. 427 of 2010(C) ------------------------ PETITIONER(S): --------------- M/S.STAR METALS, XIII/7074,ELAPPULLY, KARAMKODE, TENALI, PALAKKAD,REPRESENTED BY MANAGING PARTNER, GEOGY P.L. BY ADV. SRI.C.K.THANU PILLAI SRI.K.P.JOY RESPONDENT(S): --------------- 1. THE INTELLIGENCE OFFICER, SQUAD NO.VII COMMERCIAL TAXES, PALAKKAD. 2. THE COMMERCIAL TAX OFFICER, SECOND CIRCLE, PALAKKAD. 3. THE AUTHRITY TO ISUE CLARIFICATION, REPRESENTED BY THE DEPUTY COMMISSIONR (GENERAL),OFFICE OF THE COMMISSIONR OF COMMERCIAL TAXES, PUBLIC OFFICEBUILDINGS, THIRUVANANTHAPURAM. GOVERNMENT PLEADER SRI.C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 01/02/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R. RAMACHANDRA MENON, J. ----------------------------------------------- WP(C) No. 427 of 2010 ------------------------------------ Dated, this the 1st day of February, 2010 J U D G M E N T The issue involved in this Writ Petition is whether Ext.P6 order passed by the 1st respondent imposing penalty upon the petitioner under Section 67 of the Kerala Value Added Tax Act is correct or sustainable, when the dispute as to the actual rate of tax payable has been sought to be clarified by filing Ext.P4 petition under Section 94 of the Act before the 3rd respondent. 2. The sequence of events shows that the petitioner who is running a metal crusher unit was effecting payment of tax availing the option under Section 8 (b) at the compounded rate in respect of the relevant years, depending upon the size of the machine as stipulated. The three different slabs are provided under Section 8 (b) as follows. S 8 (b): Any dealer producing granite metals with the aid of mechanised crushing machine may, at his option, instead of paying tax in accordance with the provisions of the said sections, pay tax at the following rates, namely:- (i) for each crushing machine of size not exceeding 30.48 cm x 22.86 cm = Rs.50,000 per annum; (ii) for the each crushing machine of size exceeding 30.48 cm x 22.86 cm but not exceeding 40.64 cm and 25.40 cm= Rs.1,60,000 per annum; WP(C) No.427/2010 2 (iii) for the each crushing machine of size exceeding 40.64 cm x 25.40 cm = Rs.3,20,000 per annum (iv) for each cone crusher Rs.7,50,000 per annum. Provided that in the case of dealers, who opted to pay compounded tax under this clause, no separate assessment shall be made in respect of m-sand produced by them. The petitioner's machine is having an admitted size of 55.88 cms x 22.86 cms as shown in Ext.P4 inspection report. This shows that the width of the machine very much tallies with the figures given under clause (i) and (ii) of Section 8 (b); though the length of the machine is higher than the relative entries therein. The petitioner has admittedly remitted tax of Rs.1.6 lakhs as stipulated under Section 8 (b) (ii) even though the machine is having a width of only 22.86 cms, but having a greater length. Observing that the tax paid by the petitioner is not in confirmity with the statutory prescription the petitioner was served with Ext.P2 notice under Section 67(1), to which the petitioner submitted Ext.P3 reply, simultaneously seeking for clarification under Section 94 from the 3rd respondent vide Ext.P4. It is without any regard to the pendency of the said proceedings before the 3rd respondent that the 1st respondent has issued Ext.P6 order imposing penalty upon the petitioner, which in turn is subjected to challenge in this Writ Petition. 2. The learned Government Pleader submits with reference to the statement filed on behalf of the 1st respondent, that the statutory WP(C) No.427/2010 3 prescription is very clear and that there is absolutely no obscurity; more so when the petitioner himself has admitted that the length of the machine is much higher than the entry given under clauses (i) and (ii) of Section 8 (b). It is stated that the order passed by the 1st respondent is perfectly within the four walls of the law and not assailable under any circumstance. 3. This Court finds that there is some relevance for fixing the measurement, stipulating the size, both length wise and width wise as given under Section 8(b) attracting the compounded rate of tax prescribed in separate slabs. Though it is not clearly discernible, the intention might probably be with relation to the 'volume' of 'production capacity' of the machine. The technical aspect in this regard or the requirement is not a matter which could be effectively probed into, by this Court. The reasoning behind fixing the rate of tax with reference to such 'length' and 'width' of the machine, so as to apply the correct rate of tax, very much comes within the scope of the provision for clarification as provided under Section 94 of the Kerala Value Added Tax Act. 4. In the above circumstance, the 3rd respondent is hereby directed to consider Ext.P5 and pass appropriate orders thereon after giving an opportunity of hearing to the petitioner, which exercise shall be pursued and finalized, as expeditiously as possible, at any rate, within two months from the date of receipt of a copy of this judgment. It is made WP(C) No.427/2010 4 clear that till such proceedings are finalized as above, all further coercive proceedings pursuant to Ext.P6 shall be kept in abeyance. All other contentions raised by the petitioner are left open. The Writ Petition is disposed of accordingly. P. R. RAMACHANDRA MENON JUDGE dnc