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 MONDAY, THE 10TH NOVEMBER 2008 / 19TH KARTHIKA 1930 W.A.No. 2189 of 2008 ------------------------------------ AGAINST THE JUDGEMENT IN WPC.29607/2008 DATED 21/10/2008 .................... APPELLANT/PETITIONER: ------------------------------------ O.M.MATHEW, S/O.O.E.MATHEW, AGED 45 YEARS, ORUMPIKKUNNEL VEEDU, THURUTHICAD, MALLAPPALLY, PATHANAMTHITTA DISTRICT. BY ADV. SRI.T.S.JOHN RESPONDENTS/RESPONDENTS: ----------------------------------------------- 1. THE GOVERNMENT OF KERALA, REPRESENTED BY THE SECRETARY TO GOVT. FINANCE DEPT., THIRUVANANTHAPURAM. 2. INTELLIGENCE OFFICER, SQUAD NO.1, COMMERCIAL TAXES, PATHANAMTHITTA. 3. THE DISTRICT COLLECTOR, PATHANAMTHITTA. 4. THE TAHSILDAR, MALLAPPALLY. 5. THE DEPUTY COMMISSIONER (APPEAL) COMMERCIAL TAXES, KOLLAM. BY SR.GOVERNMENT PLEADER SRI.MUHAMMED RAFIQ THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 10/11/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: H.L.DATTU, C.J. & A.K.BASHEER, J. ------------------------------------------- W.A.No.2189 of 2008 ------------------------------------------ Dated, this the 10th day of November, 2008 JUDGMENT H.L.Dattu, C.J. Being aggrieved by the orders passed by the learned Single Judge in W.P.(C) No.29607 of 2008 dated 21st October, 2008, the petitioner in the writ petition has presented this writ appeal. (2) In the writ petition filed, the petitioner had primarily questioned Ext.P6 order passed by the first appellate authority. By the impugned order, the first appellate authority had directed the petitioner to pay 40% of the penalty imposed by the Intelligence Officer of the Department for the assessment years 2005-06 and 2006-07. (3) The Intelligence Officer of the Department has imposed a penalty of Rs.1,56,996/- in exercise of his powers under Section 67(1) of the Kerala Value Added Tax Act, 2003 ('the Act' for short) for the return periods 2005-06 and 2006-07. (4) Aggrieved by the penalty so imposed by the Intelligence Officer of the Department, the assessee has filed appeal before the first appellate authority. Along with the appeal an application for stay was also filed. W.A.No.2189 of 2008 2 (5) The first appellate authority has disposed of the application for stay by its order dated 24.9.2008 and in that the first appellate authority has stated as under: “I have examined the contentions raised by the learned counsel and perused the impugned order. The Investigation branch, Commercial Taxes, Pathanamthitta gathered certain work details of the appellant and verified the details with the returns of the appellant and found that the work executed for Rs.6,50,000.00 awarded by the Anicadu Service co.op. Bank Ltd. was not included in the return filed. Hence tax due was worked out at Rs.60,938.00 by adopting 12.5% rate and double the tax was imposed as penalty. The main argument of the learned counsel is that the rate of tax applicable is 4% only as a compounded dealer and tax due was remitted by the bank but no documents produced in support of the contention. But considering the fact that the penalty imposed was double the tax due fixed at the rate of 12.5%. The following orders are passed. ORDER NO.KVATA 4095 & 4093/08 DATED 24-9-2008 Steps for collection of penalty u/s 67(1) of the KVAT Act for the return periods 2005-06 & 2006-07 are stayed till the disposal of appeal subject to the condition that the appellant pays 40% of the penalty imposed u/s 67(1) of the KVAT Act within two weeks from the date of receipt of this order. The appellant should also furnish adequate security for the balance amount to W.A.No.2189 of 2008 3 the satisfaction of the assessing authority. If any of the condition is not fulfilled stay granted will automatically vacate.” (6) It is the correctness or otherwise of that discretionary order passed by the first appellate authority that is called in question by the petitioner in the writ petition. The learned Single Judge, being of the opinion, that the order passed by the first appellate authority is a speaking order, in the sense the order contains reasons, has thought it fit to reject the writ petition. That is how the petitioner in the writ petition has presented this writ appeal. (7) The order passed by the first appellate authority is a discretionary order. The said discretionary order passed by the first appellate authority can be interfered with by this Court only if the order so passed is either arbitrary, illegal or irregular, or if it does not contain any reasons. (8) In the instant case, the first appellate authority while disposing of the application filed by the petitioner for grant of an interim order, in our opinion, has assigned sufficient reasons and thereafter has directed the petitioner to deposit 40% of the penalty imposed by the Intelligence Officer of the Department for the return periods 2005-06 and 2006-07. (9) After carefully perusing the order passed by the first appellate authority, we are of the opinion that the order passed by the first appellate authority cannot be characterised as either arbitrary or capricious. W.A.No.2189 of 2008 4 (10) In that view of the matter, we decline to entertain this writ appeal. Accordingly the writ appeal requires to be rejected and it is rejected. Ordered accordingly. (H.L.DATTU) CHIEF JUSTICE (A.K.BASHEER) JUDGE vns