IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH TUESDAY, THE 8TH JULY 2008 / 17TH ASHADHA 1930 WP(C).No. 20178 of 2008(B) -------------------------- PETITIONER: ------------ M/S.LAL STEELS(P) LTD., VIII/627, NIDA, KANJIKODE WEST, PALAKKAD-678623 REP. BY ITS DIRECTOR, SHRI.BHARAT S.TANTIA BY ADV. SRI.T.M.SREEDHARAN SRI.V.P.NARAYANAN RESPONDENTS: ------------- 1. THE INTELLIGENCE OFFICER, (SPECIAL TEAM) SQUAD NO.1, ERNAKULAM 2. THE DEPUTY COMMISSIONER(APPEALS) COMMERCIAL TAXES, ERNAKULAM 3. THE INSPECTING ASSISTANT COMMISSIONER COMMERCIAL TAXES, PALAKKAD(RR) 4. THE ASST.COMMISSIONER, (SPECIAL CIRCLE) COMERCIAL TAXES, PALAKKAD 5. KERALA STATE INDUSTRIAL DEVELOPMENT CORPORATION LTD., KESTON ROAD, KAWDIAR, THIRUVANANTHAPURAM-3, REP. BY MANAGING DIRECTOR/GENERAL MANAGER BY GOVERNMENT PLEADER ADV.SRI.C.K.GOVINDAN FOR R1 TO 4 SRI.SAJI VARGHESE, SC, FOR R5 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.M. JOSEPH, J. ```````````````````````````````````````````````````` W.P.(C) No. 20178 OF 2008 B ```````````````````````````````````````````````````` Dated this the 8th day of July, 2008 J U D G M E N T Petitioner challenges Exts.P3, P7 and P10. Ext.P3 is the order imposing penalty. Ext.P7 is the revenue recovery notice. Ext.P10 is the stay order passed in the appeal filed by the petitioner against Ext.P3 order of penalty. 2. I heard learned counsel for petitioner Sri.T.M.Sreedharan and learned Government Pleader. 3. In Ext.P3, penalty has been imposed by the Intelligence Officer on an appreciation of the records after giving an opportunity of filing objections against the proposal. Penalty in a sum of Rs.1,01,23,000/- has been imposed. There is a stock variation also. It is found that there was difference in stock of all commodities. There were discrepancies also noted. Apart from that, the officer also found on the basis of the norms set by KSIDC, the electric power required for production of one Tonne M.S. Ingots is 100 WPC.20178/08 : 2 : units. With reference to the power consumption as per data collected from the KSEB, it is found that there is a total suppression of 4528.590 MT. On the strength of the same, suppression was worked out on the basis of electric power consumption up to 30.10.2007 in a sum of Rs.12,22,71,930/-. A total sum of Rs.12,65,49,529/- was detected. Calculating at the rate of 4% a penalty at twice the rate of tax was thus imposed by Ext.P1. By Ext.P10 interim order in the appeal filed, collection of penalty was stayed on payment of 50% of the penalty due and on furnishing security for the balance amount. 4. Learned counsel for the petitioner would point out that it may not be safe to estimate production and consequently suppression of production and payment of tax and therefore penalty on the basis of consumption of electricity on the basis of figures furnished by the KSIDC. He has also referred to the cross examination of the officer of the KSIDC in an attempt to convince this Court that it is unsafe to conclude that one Tonne can be produced from 100 units of WPC.20178/08 : 3 : electricity. The learned counsel for the petitioner also contended that the petitioner has been assessed to pay central excise duty. It is also submitted that the petitioner has already paid Rs.4 lakhs. 5. Learned Government Pleader submits that the contention of the petitioner may not be accepted. 6. Having regard to all facts and also the material which is made available, namely the cross examination in the other case, and also as it relates to imposition of penalty, Ext.P10 is modified and it is ordered that if the petitioner remits a sum of Rs.25 lakhs within two weeks from today and furnishes security to the satisfaction of the officer for the balance amount, recovery proceedings initiated against the petitioner will be kept in abeyance till disposal of the appeal filed by the petitioner. Writ petition is disposed of as above. Sd/- (K.M.JOSEPH, JUDGE) aks /TRUE COPY/ P.A.TO JUDGE