IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 1ST FEBRUARY 2011 / 12TH MAGHA 1932 WP(C).No. 1271 of 2011(H) ------------------------------------- PETITIONER: ------------------- M/S. MARIA METALS, XXXIII/12, PALARIVATTOM JN., KOCHI - 25, REPRESENTED BY ITS MANAGING PARTNER MRS. ANNAMMA PETER. BY ADV. SRI.P.N.DAMODARAN NAMBOODIRI. RESPONDENTS: ------------------------ 1. THE INTELLIGENCE OFFICER, SQUAD NO.VIII, COMMERCIAL TAXES, ERNAKULAM - 682 015. 2. THE COMMERCIAL TAX OFFICER, DEPT. OF COMMERCIAL TAXES, SECOND CIRCLE, KALAMASSERY, AT PALARIVATTOM - 682 025. R1 & R2 BY SR. GOVT. PLEADER SRI. C.K. GOVINDAN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 01/02/2011,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: prv. C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.1271 of 2011 ------------------------------------------- Dated this the 1st day of February, 2011 J U D G M E N T ---------------------- Ext.P7 order imposing penalty under Section 67(1) of the Kerala Value Added Tax Act, 2003 (KVAT Act) is challenged in this writ petition. The proceedings was initiated on the basis of an inspection conducted at the business premises of the petitioner, on 16.12.2010, and on the basis of recovery of certain records from the business place. The penalty was imposed based on the allegation that the petitioner was not keeping true, correct and complete accounts with respect to the business transactions and he had also failed to remit tax legitimately due to the Government. 2. Normally, the petitioner has to resort to the statutory remedy of appeal against Ext.P7. But the petitioner is challenging Ext.P7 in this writ petition, on the premise that the order was finalised without affording proper opportunity to the petitioner to object the proposal and further the penalty was imposed without affording proper opportunity to produce Books of Accounts. 3. Contention of the petitioner is that, when the W.P.(C).1271/11 -2- proposal notice as evidenced from Ext.P5 was issued, the petitioner submitted an adjournment application as per Ext.P6, on the ground that the dealer is out of station. In Ext.P6, specific request was made to supply the purchase bills and sales bills which forms part of the records recovered at the time of inspection. It is the contention of the petitioner that, without returning the recovered records and without affording a further opportunity to file detailed objections, the penalty proceedings was finalised, even without affording opportunity of personal hearing. The petitioner had also raised a further contention that the order imposing penalty was purposefully pre-dated, in order to deny such opportunity. 4. On a perusal of the impugned order as well as copies of other documents produced, it is evident that subsequent to the inspection the authority had called for production of Books of Accounts, on two occasions. But the petitioner had failed to produce the Books of Accounts. After issuance of the proposal notice dt.25.9.2010, no Books of Accounts were produced by the petitioner. 5. On the other hand, specific request in Ext.P6 is to the effect that, since the purchase bills and sale bills were recovered at the time of inspection, the petitioner is not in a position to produce the accounts unless details of the purchase bills and W.P.(C).1271/11 -3- sale bills are supplied or the documents were not returned back to the petitioner. Learned Government Pleader appearing on behalf of respondents specifically pointed out that the above fact will reveal that the petitioner was not keeping true and correct Books of Accounts. But from the request it is evident that the the attempt of the petitioner is only to create such accounts out of the records recovered, is the contention. 6. However, I notice that, inspite of adjournment sought for through Ext.P6 letter, the 1st respondent had finalised the proceedings without affording any opportunity to the petitioner to file objections nor any opportunity of personal hearing was afforded before finalising the proceedings. It is also pertinent to note that, inspite of specific request the petitioner was not afforded with an opportunity to peruse the recovered records or she was not supplied with copies of such records. Hence I am of the view that the proceedings imposing penalty was finalised in a hasty manner which had resulted in non compliance of principles of natural justice. It is evident that the date of the order noticed in Ext.P7 is not correct and it is not discernible as to when the order was issued. 7. In view of the above facts, I am of the view that, even if the petitioner is relegated to remedy by way of appeal, there is every chance of the matter being remanded. Hence it is found W.P.(C).1271/11 -4- that, interest of justice will be served if the 1st respondent is directed to reconsider the matter and to pass fresh orders after affording proper opportunity to the petitioner. 8. Accordingly the writ petition is disposed of quashing Ext.P7. The 1st respondent will either return the recovered documents or will make arrangements for furnishing copies of relevant details to the petitioner , if any approach is made in this regard, on usual terms. The petitioner should take necessary steps for the above purpose within two weeks from the date of receipt of a copy of this Judgment. The petitioner is given a further opportunity to file objections against Ext.P5 proposal within two weeks thereafter. The 1st respondent shall finalise the matter afresh on the basis of objections if any filed as stipulated above, after affording an opportunity of personal hearing, at the earliest possible, at any rate within two months from the date of receipt of a copy of this judgment. C.K.ABDUL REHIM, JUDGE. okb