IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM FRIDAY, THE 30TH OCTOBER 2009 / 8TH KARTHIKA 1931 WP(C).No. 30956 of 2009(L) -------------------------- PETITIONER(S): --------------- JYOTHY LABORATORIES LIMITED: KADANASSERRY P.O., THRISSUR, REPRESENTED BY ITS SENIOR OFFICER (ACCOUNTS)-T.V. TILAKAN BY ADVS. SRI.P.RAGHUNATH SRI.PREMJIT NAGENDRAN RESPONDENT(S): --------------- 1. ASSISTANT COMMISSIONER (ASSESSMENT) COMMERCIAL TAXES, SPECIAL CIRCLE, THRISSUR. 2. THE INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, THRISSUR. 3. KERALA VAT APPELLATE TRIBUNAL, ERNAKULAM 4. MANAGER, FEDERAL BANK, CHOWALLURPADY R1 & R2 BY GOVT. PLEADER SRI. C.K. GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 30/10/2009 , THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: shg/ C.K. ABDUL REHIM, J. - - - - - - - - - - - - - - - - - - - - - - - W.P.(C)No. 30956 of 2009 - - - - - - - - - - - - - - - - - - - - - - - Dated this the 30th day of October, 2009 J U D G M E N T 1. Assessment of the petitioner with respect to the period from April 2008 to October 2008 was finalised as per Ext.P1 order by the 1st respondent. The matter is now pending in second appeal as evidenced by Ext.P3, before the 3rd respondent Tribunal. The petitioner had also filed stay petition as evidenced by Ext.P4, along with the appeal. It is submitted that Ext.P3 appeal and Ext.P4 stay petition are pending consideration and disposal before the 3rd respondent Tribunal. 2. The main dispute against the assessment pertains to rate of tax applicable to the products, “Ujala Supreme” and “Ujala Stiff and Shine”. According to the petitioner the products are falling within Entry No.155 (8) (d) & Entry No.118 of List A of the Third Schedule to the Kerala Value Added Tax Act, 2003 (KVAT Act) and the rate of tax W.P.(C)No. 30956 of 2009 -2- applicable is 4%. But according to the assessing authority the product in question will fall only under the Residual Entry 103 of SRO 82/2006 in the Schedule to the Act and therefore taxable at 12.5%. With respect to the period prior to the present order of assessment, the 3rd respondent Tribunal as per order in T.A. No.272 & 314/2008 dated 23.12.2008 held that the products are taxable only at 4%. A Tax Revision Case filed by the State against the said order is pending disposal before this court. At the same time on the basis of clarification sought by another dealer an order under Section 94 was issued by the Commissioner of Commercial Taxes, holding that the product in question is taxable at 12.5%. It is submitted that said order of the Commissioner was upheld by this court and the matter is now pending disposal before the Hon'ble Supreme Court. However it is submitted that either in the Tax Revision Case pending before this court or in the SLP pending before the Hon'ble Supreme Court, there is no interim orders. Therefore, according to the petitioner, the finding in the W.P.(C)No. 30956 of 2009 -3- order of the 3rd respondent Tribunal with respect to the previous periods is holding the field at present. 3. Grievance voiced in this writ petition is that, without taking into consideration of pendency of Ext.P3 appeal & P4 stay petition, the 1st respondent has initiated steps for recovery and Ext.P5 prohibitory order has already been issued to the 4th respondent Bank, directing realisation of amounts standing credit in the Bank account of the petitioner. It is submitted that approximately an amount of Rs.25 lakhs is pending credit in the Bank account, and due to Ext.P5 notice the petitioner is precluded from conducting operation in the account. Under the above circumstances the petitioner is praying for a direction for early disposal of the appeal and till then to stay the recovery steps. 4. Heard learned counsel appearing for the petitioner and Government Pleader appearing for respondents 1 & 2. Having considered the fact that the second appeal and stay petition are pending consideration before the statutory Tribunal, the normal course ought to W.P.(C)No. 30956 of 2009 -4- have adopted is to direct that Tribunal to deal with the matter and to dispose the stay petition within a time frame. But in the case at hand due to the peculiar circumstances that the Bank account of the petitioner stands freezed and the petitioner had expressed great concern about the prejudice being caused in their business transactions, and on considering the fact that the issue now stands covered by a decision of the appellate tribunal, eventhough pending under challenge before this court, I am adopting a different cause. Therefore, I am of the opinion that the writ petition can be disposed of directing the 3rd respondent Tribunal to consider and dispose of the appeal itself at the earliest and directing recovery steps to be kept in abeyance in terms of conditions to be imposed. 5. In the result the writ petition is disposed of directing the 3rd respondent Tribunal to consider and pass orders on Ext.P3 appeal, after affording opportunity to the petitioner, as early as possible, at any rate within a period of two months from the date of receipt of copy of this W.P.(C)No. 30956 of 2009 -5- judgment. The respondents are directed to keep in abeyance all further steps for realisation of the amounts covered under Ext.P1, on condition that the 4th respondent will transfer amounts standing credit in the Bank account of the petitioner to the 2nd respondent, in compliance with Ext.P5 order. The petitioner will make further payment of an amount of Rs.50 lakhs as reduced by the amount thus transferred by the 4th respondent Bank, within a period of six weeks. 6. It is made clear that on transferring the amount standing credit in the Bank account of the petitioner, Ext.P5 order will be treated as recalled and the petitioner shall be permitted to operate the Bank account as usual. C.K. ABDUL REHIM JUDGE shg/