IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 12TH OCTOBER 2010 / 20TH ASWINA 1932 WP(C).No. 30828 of 2010 (C) -------------------------- PETITIONER: ------------------ P.DHARMARAJAN, AYYAPPA TRADERS, THAMARAKULAM, KOLLAM. BY ADVS. SRI.S.SANTHOSH KUMAR SMT.LISSY JOSE.P RESPONDENTS: ---------------------- 1. THE DEPUTY COMMISSIONER (APPEALS) II, COMMERCIAL TAXES, KOLLAM 691001. 2. THE INTELLIGENCE OFFICER, SQUAD NO.1, COMMERCIAL TAXES, KOLLA 691001. BY SENIOR GOVERNMENT PLEADER, SRI.C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12/10/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: VK C.K.ABDUL REHIM, J --------------------------- W.P(C) No.30828 of 2010-C ---------------------------- Dated this the 12th day of October, 2010. J U D G M E N T Ext.P10 order issued by the first respondent on the stay petitions filed along with the appeals, is under challenge in this writ petition. The petitioner was imposed with penalty under Section 44 (8) and (10) of the Kerala Value Added Tax Act (KVAT Act) on the basis of detection of goods stored at undeclared godowns. Exts.P7 and P7(a) are the orders imposing penalty, issued by the second respondent. From Exts.P7 and P7(a) orders, the petitioner had preferred appeals before the first respondent as per Exts.P8 and P8 (a). Along with appeals stay petitions were also filed as per Exts.P9 and P9(a). Through Ext.P10 order the first respondent, after elaborate consideration of the grounds, had dismissed the stay applications. 2. On a perusal of Ext.P10 order it is revealed that the first respondent had considered each and every ground raised in the appeals and had arrived at conclusions regarding merits of those grounds, as if he is disposing the appeals itself. After elaborate W.P(C) No.30828 of 2010-C 2 consideration of the grounds in the appeals, the first respondent had also taken note of settled legal positions with respect to the issue involved, pertaining to Section 44(8) and (10) of the KVAT Act. Ultimately, it was found that violation of the provisions which is binding on the dealer has been established and the petitioner had failed to discharge the statutory obligation of informing about the storage of goods in undeclared places. It is also found that the petitioner had failed in producing proper account regarding storage of such goods. After arriving all such finding, the first respondent observed that there is no primafacie case involved which warrants stay of collection and therefore the stay petitions were dismissed. 3. It is revealed that the statutory appellate authority had proceeded with disposal of the matter, as if he is finally deciding the appeals itself. After considering all the grounds on its merits and after arriving at specific conclusions regarding all such grounds, it was not proper for the appellate authority to confine the orders on the stay petitions. On the other hand, the appeal itself could have been disposed of by the authority. While disposing the interim petitions, the appellate authority was expected only to consider sustainability of the contentions on a primafacie basis, in order to W.P(C) No.30828 of 2010-C 3 arrive at a conclusion as to whether a fit case has been made out for granting stay, with or without imposing any conditions. Further, it is pertinent to note that the denial of interim relief, pending disposal of the appeals, will cause the appeals itself as ineffective. Insistence for payment of the entire amount in dispute during pendency of the appeal, will definitely cause onerous liability on the petitioner. 4. According to the petitioner elaborate consideration of the appeals, on the basis of relevant Books of Accounts and other documents, is essential in order to decide merits regarding imposition of penalty to the maximum extent. Under such circumstances dismissal of the stay petitions is causing severe prejudice to the petitioner, is the contention. 5. Under the above circumstances, I am of the considered opinion that Ext.P10 order warrants interference. The first respondent is directed to consider and pass orders on Exts.P8 and P8(a) appeals at the earliest possible, at any rate within a period of two months from the date of receipt of a copy of this judgment. 6. Ext.P10 order is modified to the extent of granting stay against collection of the amounts of penalty imposed, subject to W.P(C) No.30828 of 2010-C 4 condition of the petitioner remitting 1/4th of the amounts covered under Exts.P7 and P7(a) and on furnishing security for the balance amount. The conditions as above shall be complied with within a period of one month from today. The writ petition is disposed of with the above observations. Sd/- C.K.ABDUL REHIM JUDGE //True Copy// P.A to Judge ab