IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM FRIDAY, THE 6TH NOVEMBER 2009 / 15TH KARTHIKA 1931 WP(C).No. 13125 of 2009(I) -------------------------- PETITIONER(S): --------------- M/S LARSEN & TOUBRO LIMITED, REGISTERED OFFICE AT L & T HOUSE, BALLARD ESTATE, PO BOX 278, MUMBAI-400 001 AND BRANCH AT "SKYBRIGHT" BUILDINGS RAVIPURAM JUNCTION, M.G.ROAD, KOCHI-682 016 REPRESENTED BY ITS SR.DY GENERAL MANAGER (INDIRECT TAXES) MR.SATHISH SANGAMESWARAN. BY ADV. SRI.A.KUMAR RESPONDENT(S): --------------- 1. STATE OF KERALA REPRESENTED BY THE SECRETARY TO GOVERNMENT, FINANCE DEPARTMENT, THIRUVANANTHAPURAM. 2. FAST TRACK TEAM, COMMERCIAL TAXES DEPARTMENT, ERNAKULAM. 3. THE ASST.COMMISSIONER, COMMERCIAL TAXES, SPECIAL CIRCLE-II, ERNAKULAM. **ADDITIONAL R4 IS IMPLEADED: R4. INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, ERNAKULAM, KAKKANAD, KOCHI. (ADDL.R4 IS IMPLEADED AS PER ORDER DATED 08.05.09 IN I.A.NO.5692/09 ) BY GOVT. PLEADER SRI.C.K. GOVINDAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 06/11/2009 ALONG WITH W.P.(C) NOS.28969 & 29148 OF 2009. THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: shg/ WP(C).No. 13125 of 2009(I) APPENDIX PETITIONER'S EXHIBITS: P1. COPY OF THE NOTICE ISSUED BY 3RD RESPONDENT CALLING FOR BOOKS OF ACCOUNTS DATED 14.11.2006. P2. COPY OF THE NOTICE ISSUED BY THE 2ND RESPONDENT DATED 19.11.08. P3. COPY OF THE REPLY DATED 15.12.2008. P3 (a). COPY OF THE REPLY DATED 26.02.09. P3 (b). COPY OF THE REPLY DATED 03.03.09. P4. COPY OF THE ORDER OF THE 2ND RESPONDENT DATED 15.03.09. P5. COPY OF THE STATEMENT FURNISHED BY THE PETITIONER INDICATING DETAILS OF WORK DONE, ETC. P5(a). COPY OF THE REGISTRATION CERTIFICATE OF SOME OF THE SUB CONTRACTORS DATED 08.06.2000. P5 (b). COPY OF THE DECLARATION OF THE SUB CONTRACTORS THAT THEY HAVE DECLARED THE TURNOVER AND DISCHARGE THE TAX LIABILITY DATED 22.02.06. P5(c). COPY OF THE CERTIFICATE ISSUED BY THE ASSESSING AUTHORITY OF SUB CONTRACTOR DATED 21.03.2001. P6. COPY OF B1 SCHEDULE OF LUMP SUM PRICE. P6 (a). COPY OF THE INVOICE RAISED INDICATING THE CHARGES. P6 (b). COPY OF THE INVOICE NO.CRL/0228 DATED 31.8.99. P7. COPY OF THE COVERING LETTER WITH THE INVOICE CONTAINING SPLIT UP OF THE CLAIM AND THE CONTRACT TERMS DATED 31.03.2000. P8. COPY OF THE LETTER DATED 17.06.08. P8 (a). COPY OF THE STATEMENT SHOWING THE BREAK UP OF FIGURES ON WHICH UNIFORM TAX IS APPLIED. P9. COPY OF THE STATEMENT FILED ALONG WITH EXHIBIT P-3. P10. COPY OF THE JUDGMENT REPORTED IN 2008 16 KTR 206 (Ker) P11. COPY OF THE JDUGMENT IN W.P.(C) NO.15659 OF 2008. P12. COPY OF THE REVENUE RECOVERY NOTICE ISSUED BY THE INSPECTING ASST.COMMISSIONER , IRINJALAKUDA DATED 05.05.09. RESPONDENTS' EXHIBITS: NIL //TRUE COPY// shg/ P.A. TO JUDGE C.K. ABDUL REHIM, J. - - - - - - - - - - - - - - - - - - - - - - - W.P.(C)Nos.13125, 28969 and 29418 of 2009 - - - - - - - - - - - - - - - - - - - - - - - Dated this the 6th day of November, 2009 J U D G M E N T 1. Challenge in these writ petitions are against assessments completed under the provision of Section 17D of the Kerala General Sales Tax Act 1963 (KGST Act). A Division Bench of this court in a batch of cases filed challenging validity of Section 17 D, observed that if exorbitant demand of tax is as a result of arbitrary orders issued, which according to the petitioners are issued in violation of natural justice and without following the mandatory procedure provided under section 17D, it is not as if petitioners are totally without remedy. The constitutional remedy under Article 226 is available in such cases and it will be open to the parties seeking relief against such orders to approach this court and in such cases it is within the power of this court to mould W.P.(C)Nos.13125, 28969 and 29418 of 2009 -2- appropriate reliefs. 2. With respect to the procedure to be followed while passing assessments under section 17 D, the Division Bench observed as follows:- “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 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 W.P.(C)Nos.13125, 28969 and 29418 of 2009 -3- 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 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 W.P.(C)Nos.13125, 28969 and 29418 of 2009 -4- 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 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 W.P.(C)Nos.13125, 28969 and 29418 of 2009 -5- 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 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 W.P.(C)Nos.13125, 28969 and 29418 of 2009 -6- 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 directions contained in the Division Bench Judgment cited supra (Hindustan Petroleum Corporation Ltd. V. Assistant Commissioner and others: Writ Appeal No.1714/2009 and connected cases Jt:dt:8/10/ 2009), I am of the opinion that the impugned assessment in these writ petitions are not sustainable and hence matters need fresh disposal by the authority concerned. 4. Therefore the writ petitions are allowed quashing the impugned assessments finalised under section 17 D and also the consequential demands raised, if any for realisation of amounts covered under such assessments. The respondent concerned, (The Fast Track Team) is directed to take fresh steps necessary for completing assessment W.P.(C)Nos.13125, 28969 and 29418 of 2009 -7- taking note of the directions contained in the Division Bench judgment. The fresh assessment as directed above shall be complete as early as possible, at any rate within a period of three months from the date of receipt of the copy of this judgment, after affording adequate opportunities to the petitioner as directed above. C.K. ABDUL REHIM JUDGE shg/