IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON MONDAY, THE 29TH NOVEMBER 2010 / 8TH AGRAHAYANA 1932 WP(C).No. 7525 of 2008(U) ------------------------- PETITIONER: ------------------- M.S.JASMI, PROPRIETRESS, M/S.KAROTHUKUZHI POLYMERS, EDATHALA P.O., ALUVA. BY ADV. SRI.C.K.THANU PILLAI SRI.JINU K MOHAN RESPONDENT(S): ------------------------ 1. THE INTELLIGENCE OFFICER, COMMERCIAL TAXES, SQUAD NO.I, MATTANCHERY, MINI CIVIL STATION, ALUVA. 2. THE DEPUTY COMMISSIONER, COMMERCIAL TAXES, MATTANCHERY. BY GOVERNMENT PLEADER SRI.K.P.PRADEEP THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 29/11/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: dmb WP(C).No. 7525 of 2008 APPENDIX PETITIONER'S EXHIBITS:- P1:- COPY OF NOTICE NO.ISM.92/2001-02 DAATED 30.01.2006 ISSUED BY THE 1ST RESPONDENT P2:- COPY OF REPLY DATED 02.05.2006 PRESENTED BEFORE THE 1ST RESPONDENT P3:- COPY OF THE ORDER NO.ISM.92/2001-02 DATED 30.5.2002 ISSUED BY THE 1ST RESPONDENT P4:- COPY OF APPLICATION IN FORM NO.31A DATED 30.08.2006 FILED BEFORE THE 2ND RESPONDENT P5:- COPY OF ORDER NO.STRP.60/06 DAATED 18.11.2006 ISSUED BY THE 2ND RESPONDENT P6:- COPY OF NOTICE NO.ISM.92/01-02 DATED 11.2.2008 ISSUED BY THE 1ST RESPONDENT RESPONDENTS' EXHIBITS:- NIL //TRUE COPY// P.A TO JUDGE P.R. RAMACHANDRA MENON J. ~~~~~~~~~~~~~~~~~~~~~~~ W.P (C) No. 7525 OF 2008 ~~~~~~~~~~~~~~~~~~~~~~~ Dated, this the 29th day of November, 2010 JUDGMENT The petitioner is challenging Ext. P6 notice issued by the first respondent under Section 45 (A) of the KGST Act, seeking to impose penalty upon the petitioner, notwithstanding the fact that the proceedings initiated earlier by the very same respondent have attained finality when Ext. P3 order passed by the said respondent has been set aside by the Deputy Commissioner as per Ext. P5 order dated 18.11.06. 2. The gist of factual matrix shows that, the petitioner, who is a manufacturer of plastic granules, was confronted with some incriminating circumstances during the inspection conducted by the Intelligence Officer on 22.01.2002. In the course of such inspection, much suppression was detected, pursuant to which Ext. P1 notice was issued calling for explanation. In response of this, the petitioner submitted Ext. P2 reply, contending that there was no suppression or short accounting under any circumstances and further that the petitioner was only a manufacturer of 'plastic granules', while no plastic consumer goods were being manufactured or sold by the petitioner. 3. The explanation offered from the part of the petitioner was held as not satisfactory and accordingly, Ext. P3 order was passed by the first W.P. (C) No. 7525 of 2008 2 respondent, which in turn was subjected to challenge by filing a revision petition under sub Section 3 of Section 45 (A) of the KGST Act. After considering the facts and circumstances, Ext. P3 was set aside by the revisional authority as per Ext. P5 order and according to the petitioner, the proceedings have become final. It is without any regard to the finalization of the proceedings as above, that Ext. P6 notice has been issued by the first respondent, reopening the proceedings and proposing to impose a huge penalty under Section 45 (A); which in turn is sought to be challenged in this Writ Petition. 4. The learned Government Pleader appearing for the respondents submits that. Ext. P5 order passed by the revisional authority does not give a “Mr. Clean” certificate to the petitioner and on the other hand, it specifically says in the 'top most' paragraph of the second page, that the contentions of the petitioner (that the alleged stock difference was only a rough estimate and that the stock difference was not established) were found as not correct and contrary to the actual facts; which hence was rejected, making it clear that the stock difference of 358 Kgs. valued ` 3,580/- stood established and upheld. 5. With regard to the other contentions raised by the petitioner that the alleged unaccounted sales of plastic goods has not been established, it has been observed by the revisional authority that, no opportunity was W.P. (C) No. 7525 of 2008 3 given to the petitioner to explain the entries in the books seized and that the processing of seized records was done unilaterally. The revisional authority also observed that substantiating the 'mens rea' is an essential ingredient for imposing penalty and held that the suppression of sales turn of plastic goods worth ` 39,59,865/- was not clearly established. In the said circumstances, the revisional authority ordered as follows. “In the circumstances, the suppression of sales turnover of plastic goods worth Rs.39,59,865/- is not clearly established. Therefore, the above order of the Intelligence Officer stating suppression of sales of plastic goods valued Rs. 39,59,865/- is set aside. Reading Ext. P5 order passed by the revisional authority as a whole, it remains that the guilt on the part of the petitioner stands established at least to some extent, though the fixation of the alleged suppressed turn over as of ` 39,59,865/- was found as not acceptable to the said authority, mainly for the reason that, the petitioner was never given an opportunity of hearing before the finalization of the figures as above. It was in the said circumstance, that the matter was sought to be pursued by the first respondent, by issuing a notice as borne by Ext. P6. 6. The learned Government Pleader submits that there was also a proposal before the Commissioner seeking for further steps, so as to protect the revenue and the further course to be followed. The outcome of W.P. (C) No. 7525 of 2008 4 which is not discernible from the materials on record. However, this Court finds that there is no specific observation in the order passed by the revisional authority that, by virtue of the inference arrived at by the said authority, the first respondent would stand permitted to proceed with the course of issuing a fresh notice to the petitioner. In the absence of any such direction, what was intended by the said revisional authority while passing Ext. P5 is not clear; more so, when no counter affidavit has been filed by the respondents. For the time being, this Court declares that no further proceedings shall be pursued on the basis of Ext. P6, unless and until the first respondent is justified in doing so, on the basis of appropriate orders/directions to be passed by the competent authorities concerned, in accordance with relevant provisions of law. Reserving the rights and liberties of the parties as above, the Writ Petition is disposed of. P. R. RAMACHANDRA MENON, JUDGE kmd