IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.GIRI FRIDAY, THE 25TH JULY 2008 / 3RD SRAVANA 1930 WP(C).No. 22427 of 2008(T) PETITIONER: --------------------- BATA INDIA LTD, COURT CROSS ROAD KOZHIKODE-673 032,REPRESENTED BY ITS DEPOT MANGER, C.P.PANKAJAKSHAN BY ADV. SRI.E.K.NANDAKUMAR SRI.A.K.JAYASANKAR NAMBIAR SRI.K.JOHN MATHAI SRI.P.BENNY THOMAS SRI.ANIL D. NAIR RESPONDENTS: -------------------------- 1. THE STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, TAXES DEPARTMENT SECRETARIAT, THIRUVANANTHAPURAM 695 001 2. DEPUTY COMMISSIONER ( APPEALS) DEPARTMENT OF COMMERCIAL TAXES KOZHIKODE 673 001 3. INELLIGENCE OFFICER,SQUAD NO. III DEPARTMENT OF COMMERCIAL TAXES, KOZHIKODE 673 006 4. ASSISTANT COMMISSIONER (ASSESSMENT SPECIAL CIRCLE, DEPARTMENT OF COMMERCIAL TAXES, KOZHIKODE 673 006 WP(C).No. 22427 of 2008 :: 2 :: 5. SALES TAX OFFICER (RECOVERY) OFFICE OF THE DEPUTY COMMISSIONER DEPARTMENT OF COMMERCIAL TAXES, KOZHIKODE 673 006 BY GOVERNMENT PLEADER SRI.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 25/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: V.GIRI, J. ------------------------- W.P.(C).No.22427 of 2008 T ------------------------- Dated this the 25th day of July, 2008. JUDGMENT The petitioner is an assessee, registered under the Value Added Tax Act {for short 'the Act'}. It is engaged in the manufacture and sale of goods. It has its Head Office in Kerala at Fort Cross Road, Kozhikode. The petitioner has 32 other retail stores and branches in the State. 2. In terms of Section 20 of the Act, a consolidated return was filed by the petitioner, including the turn over of the Head Office and Branches in Kerala. Ext.P2 is a copy of the return filed by the petitioner. Returns were filed in this regard for the years 2005-06 and 2006-07. 3. The department took the stand that individual returns have to be filed by the branches as well and on the premise that there is a contravention of the provisions of the Rules, proceeded to impose penalty on the petitioner, as evidenced by Ext.P3. Apparently, penalty was imposed at the maximum rate permissible under law. W.P.(C).NO.22427 of 2008 :: 2 :: 4. The petitioner has preferred appeals against the same vide Exts.P4 and P5 and also moved applications for stay. The applications for stay have been disposed of under Ext.P10 and P11 orders, by which the appellate authority has stayed the payment of penalty till the disposal of the appeal, on condition that the petitioner remits 10% of the amount demanded, on or before 31.7.2008. Exts.P10 and P11 are challenged in this writ petition. 5. I heard learned counsel for the petitioner Sri.A.K.Jayasankar and learned Special Government Pleader Sri.Govindan. 6. Learned counsel for the petitioner submits that the assessee did not apply for individual assessment of the branches, as contemplated by Section 20 of the Act nor has it violated any of the provisions of the Act. The assessee is entitled to file a consolidated return and that has been done. The right of the assessee, in that regard and the obligation to do so, is governed by the plenary statute. Apparently, the department has referred to Rule 25(2) of the VAT Rules, 2005 to infer an W.P.(C).NO.22427 of 2008 :: 3 :: obligation on the part of the assessee to file returns relatable to the branches as well. This, Mr.Jayashankar contends, arises from a misreading of the provisions of the statute. 7. There is force in this argument, and at any rate, the question as to whether there is any infraction of the statute, in that regard, by the assessee, so as to attract the penal provisions, merits serious consideration by the appellate authority. I am sure, the appellate authority would refer to the said contention, which has been highlighted by the assessee in the Appeal Memofandum. 8. But this court is rather concerned with the correctness of the orders passed on the applications for stay. The penalty imposed is resultant upon a discretionary exercise and I am not in a position to find that the condition imposed in Exts.P10 and P11, viz., payment of 10% of the disputed penalty can be categorised, as resultant upon an arbitrary exercise of powers. 9. For all these reasons, I am not inclined to interfere with Exts.P10 and P11. But, nevertheless, in the totality of the W.P.(C).NO.22427 of 2008 :: 4 :: circumstances, I make it clear that if the assessee pays the amount as directed in Exts.P10 and P11 within a period of three months from 01.08.2008, the same shall be treated as sufficient compliance with those orders. The assessee is also entitled to seek early disposal of the appeals. 10. The writ petition is disposed of as above. The petitioner shall produce a copy of this judgment, along with a copy of the writ petition, before the 2nd respondent. Sd/- (V.GIRI) JUDGE sk/ //true copy// P.S. To Judge