IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 14TH DECEMBER 2010 / 23RD AGRAHAYANA 1932 WP(C).No. 34665 of 2010(G) -------------------------- PETITIONER: ------------------ M/S.PODDAR PLANTATIONS,RIPPON ESTATE MEPPADI,WAYANAD,REP.BY ITS SENIOR ACCOUNTS OFFICER, PRAKASH.C.K. BY ADV. SRI.ANIL D. NAIR SMT.NIVEDITA A.KAMATH RESPONDENTS: ---------------------- 1. THE INSPECTING ASSISTANT COMMISSIONER, DEPARTMENT OF COMMERCIAL TAXES, WAYANAD. 2. THE ASSISTANT COMMISSIONER, VAT SPECIAL CIRCLE,(PRODUCE),MATTANCHERRY. 3. THE STATE OF KERALA, REP.BY ITS SECRETARY,TAXES,THIRUVANANTHAPURAM. BY SR.GOVT.PLEADER SRI.C.K.GOVINDAN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14/12/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K.ABDUL REHIM, J. = = = = = = = = = = = = = = WP(C).No.34665 of 2010-G. = = = = = = = = = = = = = = Dated this the 14th day of December, 2010. J U D G M E N T Challenge in this writ petition is against Ext.P2 notice issued by the Intelligence Officer, who is subordinate to the first respondent. Through Ext.P2 intimation was given to the petitioner against the proposal to initiate penal action under the provisions of the Kerala Value Added Tax Act, 2003 (KVAT Act) and under the relevant Rules (KVAT Rules). Petitioner was given an opportunity to remit tax as stipulated therein along with interest for delayed payment within 7 days. The demand is on the basis of the finding that the petitioner had violated the provisions of the KVAT Act and Rules, by not reporting the total and taxable turnover to the assessing authority and by not remitting tax due on such turnover. The allegation is regarding evasion of payment of tax due. It is further stated in Ext.P2 that the notice in question was issued on the basis of a report WP(C).No.34665 of 2010-G. 2 submitted by the Inspecting Assistant Commissioner, Wayanad. 2. The contention of the petitioner is that Ext.P2 is not a proposal notice, as contemplated under the Statutes, for initiating any proceedings for assessment or for imposition of penalty. Contention of the petitioner is that the returns filed by the petitioner for the relevant periods have already been inspected by the authorities. According to the petitioner, if the return is to be rejected and if an assessment is to be completed under Section 25(1) of the Act, the assessing authority has to issue prior notice intimating such proposal. On the other hand, if Ext.P2 is a proposal for imposition of any penalty under Sec.67(1) on the basis of any offence being committed by the petitioner, then the authority has to follow procedure contemplated under Sec.67(1) of the Act. It is the specific case that Ext.P2 notice demanding payment of tax along with interest could not be insisted upon without recourse to any of the WP(C).No.34665 of 2010-G. 3 existing procedure provided under the above stated provisions. 3. Per contra, contention of the learned Government Pleader is that, the authority who had issued Ext.P2 is vested with powers of the assessing authority and he is justified in issuing a notice as that of Ext.P2. It is stated that on verification of the returns, the authority found suppression of taxable turnover and the proceedings was initiated on the basis of such deduction. However, it is submitted that, the petitioner is at liberty to file revised return on the basis of Ext.P2. It is further conceded that if the petitioner is not remitting the amount of tax as demanded, the authority will be proceeding further with imposition of the penalty, after complying with all the due procedure contemplated under Sec.67(1). In such case the petitioner will be issued with proposal notice and will be given opportunity to file objections and also opportunity for personal hearing, is the submissions. It is also stated that if WP(C).No.34665 of 2010-G. 4 the assessment is to be completed under Section 25(1) of the Act, all the mandatory procedure contemplated therein will be adhered to. 4. In view of the submissions made as above, I am of the view that there is no basis for the apprehension raised by the petitioner. It is left open to the petitioner either to comply with the demand under Ext.P2 or to file appropriate objections. However, it is made clear that the respondents shall proceed with further steps if any only in accordance with the mandatory procedure contemplated under the relevant provisions and only after affording sufficient opportunity to the petitioner to file objections against the proposals and further opportunity for hearing. The writ petition is disposed of with the above observations. C.K.ABDUL REHIM, (Judge) Kvs/-