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 TUESDAY, THE 7TH OCTOBER 2008 / 15TH ASWINA 1930 W.A.No. 2022 of 2008 ------------------------------------ AGAINST THE JUDGEMENT IN WPC.27907/2008 Dated 19/09/2008 .................... APPELLANT/PETITIONER: ------------------------------------ M/S.KAIRALI AYURVEDIC HEALTH RESORT PVT.LTD., OLASSERY P.O., KODUMBU, PALAKKAD DISTRICT, REPRESENTED BY ITS MANAGER (OPERATIONS), SHRI ARUN R.S. BY ADV. SRI.T.M.SREEDHARAN & SRI.V.P.NARAYANAN RESPONDENTS/RESPONDENTS: ---------------------------------------------- 1. THE INTELLIGENCE OFFICER (IB), COMMERCIAL TAXES, PALAKKAD. 2. THE DEPUTY COMMISSIONER (APPEALS), COMMERCIAL TAXES, ERNAKULAM. BY SENIOR GOVERNMENT PLEADER SRI.MUHAMMED RAFIQ. THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 07/10/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: H.L.DATTU, C.J. & A.K.BASHEER, J. ----------------------------------------------------- W.A.No.2022 of 2008 ---------------------------------------------- Dated, this the 7th day of October, 2008 JUDGMENT H.L.Dattu, C.J. Questioning the correctness or otherwise of the interim orders passed by the first appellate authority in KVAT.1475/2008, 1476/2008 and 1477/2008 dated 29.08.2008, the appellant/petitioner was before this Court in W.P.(C) No. 27907/2008. The learned Single Judge while disposing of the writ petition has modified the interim orders passed by the first appellate authority. 2. The Intelligence Officer of the Department has passed orders under Section 67 of the Kerala Value Added Tax Act, 2003 (“KVAT Act” for short), imposing penalty for violation of certain provisions of Section 67 of the KVAT Act. 3. The penalty imposed relates to the the assessment years 2005-2006 to 2007-2008. 4. Aggrieved by the imposition of the penalty under Section 67 of the KVAT Act, the assessee has filed appeals before the first appellate authority as provided under Section 55 of the KVAT Act. Along with the memorandum of appeals, the assessee has also filed applications for grant of interim relief. The first appellate authority in W.A.No.2022/2008 -2- his detailed and a speaking order, has directed the appellant/petitioner to pay 50% of the amount demanded by the Intelligence Officer and to furnish adequate security for the balance amount. 5. Before doing so, the first appellate authority in his order has observed as under: “I have gone through the records. It is seen that the Appellate Authority's intervention in quantifying the amount of penalty is possible after verifying the whole records. A detailed hearing is therefore required. It is seen that there is a prima facie case for granting conditional stay. In the circumstances the following orders are issued”. 6. Section 55 (4) of the Act provides for consideration of application for grant of interim order filed along with the memorandum of appeal. Sub section 4 of Section 55 of the KVAT Act reads as under: “(4). Notwithstanding that an appeal has been preferred under sub-section (1), the tax or other amounts shall be paid in accordance with the order against which the appeal has been preferred: Provided that the Deputy Commissioner (Appeals) may, at his discretion, give such directions as he thinks fit in regard to the payment of the tax before the disposal of the appeal, if the appellant furnishes W.A.No.2022/2008 -3- sufficient security to his satisfaction in such form and in such manner as may be prescribed.” 7. The proviso appended to Section authorises the Deputy Commissioner (Appeals) to grant such interim order as he thinks fit in regard to the payment of tax before the disposal of the appeal. In the present case, the first appellate authority, while exercising his discretion as provided in the proviso to sub section 4 of Section 55 of the KVAT Act has directed the assessee to pay 50% of the amount demanded by the Intelligence Officer in his order passed under Section 67 of the KVAT Act by passing a speaking order and by assigning cogent reasons. 8. May be taking into consideration the hardship pleaded by the assessee, the learned Single Judge has thought it fit to modify the orders passed by the first appellate authority by directing the assessee to pay 30% of the amount demanded by the Intelligence Officer of the Department. 9. Since the orders passed by the first appellate authority and the orders passed by the learned Single Judge are discretionary orders in exercise of their powers under sub section (4) of Section 55 of the KVAT Act and the extraordinary jurisdiction under Article 226 of the Constitution of India, unless the said orders are either arbitrary or W.A.No.2022/2008 -4- contrary to the statutory provision, we are not expected to interfere with the said orders. 10. The learned counsel for the appellant except arguing on the merits of the appeal which is pending consideration before the appellate authority, is not in a position to demonstrate how the orders passed by the learned Single Judge is either perverse or contrary to the statutory provision. 11. In that view of the matter, we do not see any good ground to interfere with the order passed by the learned Single Judge. Therefore, the writ appeal requires to be rejected and it is rejected. The appellant/assessee is granted another two weeks' time from today to comply with the orders and directions issued by the learned Single Judge while disposing of the writ petition. Ordered accordingly. (H.L.DATTU) CHIEF JUSTICE (A.K.BASHEER) JUDGE MS