IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE A.K.BASHEER WEDNESDAY, THE 27TH AUGUST 2008 / 5TH BHADRA 1930 W.A.No.1518 of 2008 ------------------------------------ AGAINST THE JUDGEMENT IN WP(C).11050/2008 DATED 01/04/2008 .................... APPELLANT/PETITIONER:- -------------------------------------- P.K. KADERMON, KAIRALI INTERNATIONAL FURNITURE, WEST GATE APARTMENT, POONKUNNAM, TRICHUR. BY ADV. SRI.V.V.ASOKAN SRI.V.A.SASIDHARAN SRI.T.M.CHANDRAN RESPONDENTS/RESPONDENTS:- ------------------------------------------------ 1. INTELLIGENCE OFFICER, SQUAD NO.I, COMMERCIAL TAXES, TRICHUR. 2. INTELLIGENCE OFFICER, SQUAD II, COMMERCIAL TAXES, TRICHUR. 3. STATE OF KERALA, REPRESENTED BY CHIEF SECRETARY TO GOVERNMENT, SECRETARIAT, THIRUVANANTHAPURAM. BY SENIOR GOVERNMENT PLEADER SRI.MUHAMMED RAFIQ. THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 27/08/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:- H.L.Dattu, C.J. & A.K.Basheer, J. --------------------------------------------- W.A.No.1518 of 2008 --------------------------------------------- Dated, this the 27th day of August, 2008 JUDGMENT H.L.Dattu,C.J. Appellant, being aggrieved by the orders passed by the learned Single Judge in W.P.(C).No.11050 of 2008 dated 1st April, 2008, is before us in this appeal. 2. Petitioner had filed W.P.(C).No.11050 of 2008, inter alia, questioning the correctness or otherwise of the orders passed by the Intelligence Officer, Squad No.II, Thrissur dated 29.02.2008, under Section 67(1)(6) of the Kerala Value Added Tax Act (“KVAT Act” for short) and Section 45A of the Kerala General Sales Tax Act (“KGST Act” for short) . The Intelligence Officer had imposed, by Exhibit P8 order [No.ITC 3/07-08(1)/2006-07 dated 29.02.2008], a penalty Rs.94,54,188/- for the assessment year 2006-07 under the KVAT Act; by Exhibit P9 order [No.ITC3/07-08(2)/2005-06 dated 29.02.2008] a penalty of Rs.44,13,764/- for the assessment year 2005-06 under the KVAT Act and by Exhibit P10 order [No.ITC 3/07-08(3)/2004-05 dated 29.02.2008] a penalty of Rs.17,35,726/- for the assessment year 2004-05 under the KGST Act. 3. The primary contention that was canvassed by the learned counsel before the learned Single Judge was that the respondent-authority, without returning the seized documents seized from the business premises of W.A.No.1518 of 2008 - 2 - the assessee, could not have directed the petitioner to file his objections, if any, to the notices issued under Section 67 of the KVAT Act and 45A of the KGST Act. This contention has not found favour with the learned Single Judge. The learned Single Judge has only observed, that, if, for any reason, the petitioner is aggrieved by the orders passed by the Intelligence Officer of the Department under Section 67(1)(6) of the KVAT Act and Section 45A of the KGST Act, he has to file an appropriate revision petition as provided under the statute. However, has directed the respondents in the writ petition to make available the photostat copies of the seized documents to the petitioner. It is the correctness or otherwise of the order passed by the learned Single Judge, the subject matter of this Writ Appeal. 4. The brief facts are: The petitioner is an importer, manufacturer and trader in all kinds of furniture. The Head Office, its branches, the factory and godowns were inspected simultaneously by the Intelligence Officers of the Department on 29.11.2006. It is stated in the petition, that, the seized documents includes the sales bills/invoices, purchase bills, stock book of raw materials and finished goods, books relating to partly carried out estimated sales, partly finalized quotation for supply of local as well as imported furniture. It is further stated that even after the lapse of one year and more, the seized documents were not returned by the Department. 5. The Intelligence Officer had issued a notice directing the petitioner to produce the books of accounts on 26.06.2007. After receipt of the notice, petitioner had expressed his inability to produce the current account W.A.No.1518 of 2008 - 3 - books without making it up to date in the absence of the seized documents, seized on 29.11.2006. 6. The Intelligence Officer, inter alia, alleging non-maintenance of records, like books of accounts, etc., had passed orders imposing penalties under Section 67(1)(6) of the KVAT Act and Section 45A of the KGST Act for the assessment years in question. Immediately after receipt of the notice and even prior to that also, petitioner had requested the respondent-authorities to return the seized books, seized on 29.11.2006, to file effective reply to the notices issued under Section 67 of the KVAT Act and Section 45A of the KGST Act for the assessment years in question. However, this request of the petitioner was not granted by the Intelligence Officer of the Department and has proceeded to complete the proceedings under Section 67(1)(6) of the KVAT Act and Section 45A of the KGST Act . Therefore, the petitioner was before this Court inter alia alleging that without complying with the rules of natural justice, the authorities under the respective Acts could not have passed the impugned orders. 7. Sri.V.V.Asokan, learned counsel appearing for the appellant, would submit that the orders passed by the respondents is without jurisdiction, void ab initio and in violation of the rules of natural justice and, therefore, the orders passed by the respondent-authorities require to be annulled by this Court. 8. Per contra, Sri.Muhammed Rafiq, learned counsel appearing for the Revenue, sought to justify the orders passed by the authorities under the respective Acts. W.A.No.1518 of 2008 - 4 - 9. The only question for our consideration is, whether the respondents are justified in passing the impugned orders without returning either the seized documents, seized on 29.11.2006, or the photostat copies of the seized documents. 10. In the instant case, a request was made by the assessee for return of the seized documents, for him to effectively reply to the notices issued, both under Section 45A of the KGST Act for the assessment year 2004-2005 and under Section 67 of the KVAT Act for the assessment years 2005-2006 and 2006-2007. It was expected of by the respondents either to have returned the seized books of accounts or at least make available the photostat copies of all the seized materials for the assessee to file an effective reply to the notices issued. In the present case, such a thing has not been done by the respondent-authorities. This action of the respondents, in our opinion, is not only contrary to the statutory provisions and also in violation of the rules of natural justice. Therefore, it is difficult for us to sustain the orders passed by the authorities under Section 45A of the KGST Act and 67(1)(6) of the KVAT Act for the assessment years in question. 11. Accordingly, we pass the following: Order (i) The Writ Appeal is allowed. (ii) The orders passed by the learned Single Judge is set aside. (iii) The impugned orders passed by the 2nd respondent in W.A.No.1518 of 2008 - 5 - No.ITC 3/07-08(1)/2006-07 dated 29.02.2008, No.ITC3/07-08(2)/2005-06 dated 29.02.2008 and No.ITC 3/07-08(3)/2004-05 dated 29.02.2008 are set aside. (iv) A direction is issued to the respondents to furnish to the appellant/petitioner the photostat copies of the seized documents, seized on 29.11.2006, from the business premises/branches/factories/godowns of the petitioner within a months time from today. (v) After receipt of the photostat copies of the seized documents, the appellant will file reply to the show cause notices issued under Section 45A of the KGST Act and Section 67 of the KVAT Act within fifteen days thereafter. (vi) The respondents will complete the entire proceedings within three months thereafter. All other contentions of both the parties are left open. Ordered accordingly. H.L.Dattu Chief Justice A.K.Basheer Judge vku/dk