IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 10TH DECEMBER 2009 / 19TH AGRAHAYANA 1931 WP(C).No. 35637 of 2009(Y) -------------------------- PETITIONER(S): --------------- C.HANEEFA, PROPRIETOR, BROTHERS SAW MILL, THENKURUSSI POST, PALAKKAD DISTRICT. BY ADV. SRI.HARISANKAR V. MENON RESPONDENT(S): --------------- 1. INTELLIGENCE OFFICER (IB), DEPARTMENT OF COMMERCIAL TAXES, PALAKKAD. 2. DEPUTY COMMISSIONER (APPEALS), DEPARTMENT OF COMMERCIAL TAXES, ERNAKULAM. 3. INSPECTING ASST.COMMISSIONER, DEPARTMENT OF COMMERCIAL TAXES, CHITTUR, PALAKKAD DISTRICT. GOVERNMENT PLEADER SRI. V.K. SHAMSUDHEEN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10/12/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K.ABDUL REHIM, J. ------------------------------ W.P.(C).No.35637 OF 2009 ------------------------------ Dated this the 10th day of December, 2009 J U D G M E N T ---------------------- 1. Challenge in this writ petition is against Ext.P9 and P10 interim orders issued by the 2nd respondent, on the stay petitions filed along with Ext.P5 to P8 appeals. The petitioner is aggrieved by the condition imposed while granting stay, for payment of 50% of the amount of penalty imposed. Penalties under Section 45 A of the KGST Act and Section 67 of the KVAT Act were imposed on the petitioner through Ext.P1 to P4 orders with respect to the period from 2004-05 to 2007-08. Penalties were imposed based on the allegation that the petitioner had supplied timber to M/s.Nirmithi Kendra, without taking registration and without remitting tax due thereon. According to the petitioner it was only under a bonafide belief that transaction with M/s. Nirmithi Kendra is liable for exemption from payment of tax, the same being an organisation of the State Government, that tax was not paid. However it is conceded that the petitioner is ready and willing to pay the entire tax amount due under the transaction, along with interest if any liable. 2. Regarding imposition of penalty the main ground W.P.(C).35637/09-Y 2 raised in the appeals are that the default was not due to any purposeful suppression committed with a view to evade payment of tax. There is no element of mens rea attributable with respect to failure in payment of tax. Therefore it is contended that the imposition of the maximum penalty is totally unwarranted. 3. On going through contents of Ext.P9 and P10 orders it is noticed that the appellate authority had adverted to the contentions raised in the appeals. The appellate authority observed that the only aspect which goes to a certain extent in favour of the appellant is that the Intelligence Officer has imposed maximum penalty, which could have been avoided. On the other hand the appellate authority found that the petitioner has not paid tax due to the Government, even after filing of the appeals. However, after adverting to the contentions in the appeal, the appellate authority had granted stay imposing condition for payment of 50%, without mentioning any reasons thereof. It seems that the condition was imposed in quite mechanical manner without proper consideration of the merits of the contentions. According to the petitioner the amount imposed as penalty will work out to a huge amount and payment of 50% will cause severe financial strain to the petitioner. 4. Having considered facts and circumstances of the W.P.(C).35637/09-Y 3 case, I am of the opinion that the petitioner can be directed to make payment of the entire tax amount due and that the 2nd respondent can be directed to consider and pass orders on the appeals on an early date, in modification of the condition imposed, with a lesser burden. 5. Accordingly the writ petition is disposed of directing the 2nd respondent to consider and pass orders on Ext.P5 and P8 appeals, after affording an opportunity of hearing to the petitioner, as early as possible, at any rate within a period of two months from the date of receipt of a copy of this judgment. 6. Ext.P9 and P10 orders are modified to the extent it imposes condition for payment of 50%, on directing the petitioner to make payment of the tax amount due along with interest if any liable, and also to make payment of 25% of the amount of penalty imposed through Ext.P1 to Ext.P4, within a period of one month from today. C.K.ABDUL REHIM, JUDGE. okb