IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 24TH MARCH 2011 / 3RD CHAITHRA 1933 WP(C).No. 4586 of 2011(W) ------------------------ PETITIONER : -------------------- M/S.DANDAPANI CEMENTS (PVT) LTD., 69,GANAPATHY NAGAR, THIRUVANAI KOVIL, TRICHY, TAMIL NADU-620 005, A PRIVATE LIMITED COMPANY, REP.BY ITS GENERAL MANAGER SRI.M.MUTHUKARUPPAN. BY ADVS. SRI.E.P.GOVINDAN SMT.G.DEEPA RESPONDENT(S): ------------------------- 1. THE COMMERCIAL TAX OFFICER, SECOND CIRCLE, COMMERCIAL TAXES, PALAKKAD – 678 001. 2. THE COMMISSIONER, COMMERCIAL TAXES, KERALA, VIKAS BHAVAN P.O., TRIVANDRUM – 695 001. 3. THE STATE OF KERALA REPRESENTED BY THE SECRETARY, TAXES DEPARTMENT, GOVERNMENT SECRETARIAT, TRIVANDRUM – 695 001. R1 TO R3 BY GOVT. PLEADER SRI. V.K. SHAMSUDHEEN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24/03/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Mn C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.4586 of 2011 ------------------------------------------- Dated this the 24th day of March, 2011 J U D G M E N T ---------------------- Challenge in this writ petition is against Ext.P1 order of assessment finalised against the petitioner invoking the provisions of Section 19(c) of the Kerala General Sales Tax Act, 1963 (KGST Act). It is noticed that the statute provides effective remedy by way of appeal against Ext.P1. But the petitioner is challenging the order of assessment without resorting to such remedy, on the ground that the authority is lacking jurisdiction in issuing such an order and also on the ground that the ingredients essential for invoking Section 19(c) has not been established. 2. The petitioner relies on a Division Bench decision of this court in Finimole Vs. Assistant Commissioner (2008 (3) KLT 794) wherein it is held that in order to invoke Section 26 of the Kerala Value Added Tax Act, 2003 (KVAT Act), which according to the petitioner is in pari materia with S.19(c), the assessing authority should have some rational basis to form a belief that the petitioner was carrying on the business in the name of or in association with any other person either directly or indirectly, as an agent, employee etc. The decision further says that this should be reflected in the order passed under S.26 of W.P.(C).4586/11 -2- the Act. Further it is observed that any non-compliance of such a requirement would be fatal to the proceedings. 3. On a perusal of the impugned order of assessment, it is evident that the allegation is to the effect that the petitioner had transported cement loads consigned to M/s.Malanad Cements and Allied Products (P) Ltd., during the year 2004-05 and sold out the same in the State of Kerala without accounting and without paying any tax due to the State Government. Allegation is that, it was by virtue of a clandestine business transaction done by the above said company and the petitioner by bringing cement from the petitioner during the relevant year. Further allegation is to the effect that the petitioner has transported the goods by underbilling and manipulation of C- Form No.357927K, which was already received by them for transportations conducted during the year 2000-01. It is alleged that the petitioner has used the C-form fraudulently for the purpose of the sale effected during the year 2004-05, as evident from the records. The allegation is that, the check post copies of the particular C-form available in the assessment records had revealed usage of the C-form during the year 2000-01. Hence there is an allegation that the petitioner had manipulated the C- form for the supply effected during the year 2004-05. It is also alleged that the records of the concerned assessing authority of the petitioner revealed that the petitioner has not declared any W.P.(C).4586/11 -3- sales to the above said company during the year 2000-01. Therefore there is an allegation to the effect that the petitioner was in the habit of practicing suppression of interstate sale and effecting illegal transaction and thereby the petitioner was involved in clandestine business transaction with the above said company and thereby caused loss to the Revenue of the State Government. 4. From the allegations as narrated above, it is evident that the assessment was completed based on the above said allegations, which constitutes ingredients of S.19(c). Whether those allegations are correct or not, is a matter which needs evaluation on the basis of factual aspects. Merely disputing veracity of those allegations the petitioner could not raise a contention that there is lack of jurisdiction. Whether the veracity of the allegation made for the purpose of completing the assessment can be examined in a proceedings under Article 226, is the crucial question. I am of the considered opinion that such an exercise is not at all contemplated under the jurisdiction vested on this court, especially when the statute provides an effective remedy of appeal. 5. Under the above circumstances I am of the considered opinion that there is no special circumstances existing for this court to interfere with the assessment, bypassing the remedy of appeal. However, I make it clear that this court is not entering W.P.(C).4586/11 -4- on any findings regarding merits of the contentions against sustainability of the assessment. It is left open to the petitioner to invoke appellate remedy by approaching the appropriate authority. 6. Confronted with the above situation, learned counsel for the petitioner sought indulgence of this court for directing the appellate authority to entertain appeal against Ext.P1, on the premise that the statutory appeal will be filed immediately. 7. Under the above mentioned circumstances, the writ petition is disposed of directing the appellate authority concerned to entertain appeal if any filed against Ext.P1, within a period of two weeks from the date of receipt of a copy of this judgment, and to dispose of the same on merits, as if it is an appeal filed within the time prescribed. C.K.ABDUL REHIM, JUDGE. okb