IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM FRIDAY, THE 20TH NOVEMBER 2009 / 29TH KARTHIKA 1931 WP(C).No. 32448 of 2009(A) -------------------------- PETITIONER(S): --------------- M/S.TRACO CABLE COMPANY LTD. IVTH FLOOR, KSHB OFFICE COMPLEX, PANAMPILLY NAGAR, ERNAKULAM, KOCHI-36 REPRESENTED BY ITS MANAGING DIRECTOR CDR.(RETD).K.SHAMSUDDIN BY ADVS. SMT.S.K.DEVI SRI.SANTHOSH P.ABRAHAM SRI.ASHOK SURESH RESPONDENT(S): --------------- 1. THE ASST.COMMISSIONER, DEPT. OF COMMERCIAL TAXES, SPL.CIRCLE III, ERNAKULAM. 2. FAST TRACK TEAM, DEPT. OF COMMERCIAL TAXES, ERNAKULAM,REPRESENTED BY THE ASST.COMMISSIONER, CT, SPL,CIRCLE III,ERNAKULAM. 3. THE COMMISSIONER DEPT.OF COMMERCIAL TAXES VIKHAS BHAVAN P.O., THIRUVANANTHAPURAM. BY GOVT. PLEADER SRI. C.K. GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20/11/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: shg/ C.K. ABDUL REHIM, J. - - - - - - - - - - - - - - - - - - - - - - - W.P.(C)No. 32448 of 2009 - - - - - - - - - - - - - - - - - - - - - - - Dated this the 20th day of November, 2009 J U D G M E N T 1. Petitioner is a company fully owned by the Government of Kerala. Assessment under the Kerala General Sales Tax Act, 1963 (KGST Act) for the years 2002-03, 2003-04 were completed as per Exts.P3 & P5. So also assessment under the Central Sales Tax Act (CST Act) with respect to the same years were completed as per Exts.P4 & P6. The said assessments were completed by invoking Section 17 D of the KGST Act, by the 2nd respondent. The petitioner submitted applications under Section 23 B for payment of amounts due under the Amnesty Scheme and those applications were allowed as evidenced by Ext.P7 to P10. It is submitted that the petitioner had already remitted the first installment which pertains to 25% covered under Exts.P7 to P10 orders. Now the petitioner is challenging Exts.P3 to P6 orders of W.P.(C)No. 32448 of 2009 -2- assessment issued under Section 17 D on the ground that those assessment orders are issued in total violation of the procedure contemplated under Section 17 D. 2. A Division Bench of this court in a batch of writ petitions considered challenge against the validity of Section 17 D of the KGST Act. Eventhough validity of Section was upheld, the impugned assessment therein were quashed with the following observations. “Even though we have upheld the validity of the statutory provisions, we are unable to uphold the impugned assessments for the simple reason that the none of the assessments challenged in the Writ appeals or in the Writ petitions was completed in accordance with the procedure contemplated under section 17D. It is clear from clause (g) of Section 17 D(2) that the team constituted under section 17 (D) should fix the venue and date of hearing and hold sitting to hear the parties after issuing notice in advance to W.P.(C)No. 32448 of 2009 -3- dealers concerned. Further, information in this regard should be published in local media as well. It is provided in Sub section (3)o f Section 17 D that all assessments under Fast Track Method should be unanimous decision signed by all team members. It is very clear from the scheme that all the team members should sit together, consider the returns filed, accounts and records produced, hear the parties or their representatives and suggest proposal for assessment. If an assessment by consent can be passed, then assessment order should be passed in accordance with the terms agreed in first sitting itself. The assessments that could be completed in the first sitting are cases where team of Assessing Officers accept the returns filed or with such additions which the party agrees. On the other hand, if assessment is proposed in deviation with turnover returned or against additions over and above if W.P.(C)No. 32448 of 2009 -4- any agreed by the parties, then it is for the very same team to issue pre-assessment notice containing proposal for assessment and the same should be signed by all of them. The party should be given sufficient time to file objections and the next date of public hearing by the committee should be informed to the party. Assessment has to be complete after hearing the party by team on the objection filed to the pre-assessment notice and in order to have a binding assessment, the assessment should be one completed with unanimous agreement of all the team members, In fact, ex-parte assessment is contemplated only when parties who are served notice informing the venue and date of hearing fail to appear. Here again, we are of the view that there is no harm in giving one more opportunity, if the team of officers feel that the party is not absenting deliberately. Since in all these cases assessments W.P.(C)No. 32448 of 2009 -5- are completed by issuing pre-assessment notice by individual officers, we feel that the procedure contemplated and stated by us above is not strictly followed and so much so, orders passed cannot be sustained under the provision of Section 17 D. We, therefore allow the writ appeals and writ petitions in part by vacating the impugned assessment orders, but with direction to the assessment team to complete the assessment afresh under section 17 D within a period of three months from the date of receipt of copy of this judgment after issuing notice to all parties and after hearing their objections. We make it clear that each and every objection raised by the parties in the reply to pre-assessment notice should be considered and unanimous decision should be taken by the team members. We do not want to examine the other issues raised in some of the cases like challenge against W.P.(C)No. 32448 of 2009 -6- other statutory provisions, challenge against penalty orders etc. These issues are left open. We leave freedom to the parties to challenge the penalty orders before statutory authorities because those are not issued under section 17 D. So far as challenge against other statutory provision are concerned, we leave it open to the parties to raise any such challenge, if required, after completion of assessments afresh as stated above”. 3. In view of the observations contained in the Judgment of the Division Bench, which is quoted above, I am of the opinion that the orders impugned in this writ petition, Ext.P2 to P6, are unsustainable and they are liable to be quashed. Accordingly I quash Exts.P2 to P6 orders. The 2nd respondent is directed to issue fresh orders strictly in compliance with the directions contained in the judgment of the Division Bench as early as possible, at any rate within a period of three months from the date of receipt of copy of W.P.(C)No. 32448 of 2009 -7- this judgment. 4. Needless to say that the amount already paid by the petitioner by virtue of Exts.P7 to P10 orders shall be appropriated in accordance with the outcome of the fresh assessment to be issued. C.K. ABDUL REHIM JUDGE shg/