IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM FRIDAY, THE 18TH SEPTEMBER 2009 / 27TH BHADRA 1931 WP(C).No. 22830 of 2009(W) -------------------------- PETITIONER: ------------------ P.SIDDIQUE S/O.NOORUDHEEN, PARTNER, FEROKE TIMBER TRADERS IX/58, KALLAMPARA, P.O.FEROKE, KOZHIKODE. BY ADV. SRI.R.RAMADAS RESPONDENTS: ---------------------- 1. THE SALES TAX OFFICER 5TH CIRCLE, DEPARTMENT OF COMMERCIAL TAXES KOZHIKODE. 2. THE INTELLIGENCE OFFICER (IB) OFFICE OF THE INSPECTING ASSISTANT COMMISSIONER (INTELLIGENECE) COMMERCIAL TAXES, KOLLAM. R1 & R2 BY GOVERNMENT PLEADER SRI. V.K. SHAMSUDHEEN. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 18/09/2009 , THE COURT ON THE SAME DAY DELIVERED THEj FOLLOWING: WP(C).No. 22830 of 2009(W) APPENDIX PETITIONER'S EXHIBITS: P1 : COPY OF THE ORDER OF THE PROVISIONAL ASSESSMENT FOR THE MONTH OF DECEMBER 2003 DATED 14.7.2004. P2 : COPY OF THE ORDER DATED 15.1.2005 OF THE APPELLATE ASSISTANT COMMISSIONER, COMMERCIAL TAXES, KOZHIKODE. P3 : COPY OF THE ORDER DATED 1.7.2006 OF THE SALES TAX APPELLATE TRIBUNAL, KOZHIKODE. P4 : COPY OF THE ORDER DATED 28.1.2004 IN RESPECT OF THE PROVISIONL ASSESSMENT FOR THE MONTH OF MARCH 2004. P5 : COPY OF THE ORDER DATED 16.5.2004 IN RESPECT OF THE PROVISIONAL ASSESSMENT FOR THE MONTH OF NOVEMBER 2004. P6 : COPY OF THE ORDER DATED 11.6.2009 P7 : COPY OF THE NOTICE DATED 10.7.2009 UNDER SECTION 45A OF THE KGST ACT. P8 : COPY OF THE NOTICE DATED 24.7.2009 FROM THE 2ND RESPONDENT. P9 : COPY OF THE REPLY DATED 8.8.2009. P10 : COPY OF THE ORDER DATED 28.2.2008 IN S.T.R.P. NO.50/2004 PASSED BY THE DEPUTY COMMISSIONER, COMMERCIAL TAXES, KOZHIKODE. P11 : COPY OF THE ORDER DATED 8.5.2009 IN S.T.R.P. NO.350/2008 PASSED BY THE DEPUTY COMMISSIONER, COMMERCIAL TAXES, KOZHIKODE. RESPONDENTS' EXHIBITS: N I L // TRUE COPY // P.A. TO JUDGE. app/- C.K.ABDUL REHIM, J - - - - - - - - - - - - - - - - - - - - - - - W.P.(C) No.22830 Of 2009 - - - - - - - - - - - - - - - - - - - - - - - Dated this the 18th day of September, 2009 J U D G M E N T 1. Petitioner is partner of a firm, which is a registered dealer borne on the files of the first respondent. Monthly provisional assessments with respect to December 2003, January 2004 and February 2004 were completed rejecting the Form 18 Declarations submitted by the assessee, on the ground that those declarations are not genuine as not issued by the alleged declarants to the assessee. Appeals preferred against the provisional assessments were dismissed by the first appellate authority. In second appeals filed before the Tribunal, the assessments were set aside through Ext.P3 common order, based on the finding that the rejection of Form 18 declarations by the lower authorities were not justified. The State preferred revision before this court against Ext.P3 order, and this court through Ext.P6 judgment disposed of the revision petition directing the first respondent, the assessing authority to complete regular W.P.(C) No.22830 Of 2009 2 assessment for the relevant year. The matter is now pending consideration before the first respondent. According to the petitioner the main dispute with respect to the assessment depends on acceptability of the Form 18 declarations and the first respondent has to verify and ascertain genuineness of Form 18 declarations in the process of completing the regular assessments for the year 2003-2004. 2. As things stands above, the petitioner was served with Ext.P7 proposal for imposing penalty, issued by the second respondent. The said proceedings is initiated on the basis of a direction issued by this court in W.P.(C). No. 33646/2005 filed by another dealer at Hosdurg, engaged in the business of timber. In Ext.P7 also the allegation pertain to fraudulent creation of Form 18 declarations. This court in the said judgment had issued directions as follows: “ (The Commissioner of Sales Taxes) will instruct his subordinate authorities concerned to take appropriate action against those who W.P.(C) No.22830 Of 2009 3 have made bogus sales and accounted the same at concessional rate in the name of the petitioner, such as reopening and revision of assessment, levy of penalty, prosecution if any, and cancellation of registration ..........”. On the basis of the above direction, the Commissioner, Commercial Taxes, had issued directions to the second respondent to investigate the matter. 3. It is further pointed out by the petitioner that with respect to the very same assessment years, the first respondent had already imposed penalty against the petitioner under Section 45A of the KGST Act, alleging offence for filing incorrect return for the months of November 2003 and March 2004. It is submitted that those penalty orders were challenged in appeal and the appellate authority had remanded the matter as evidenced by Exts.P10 and 11 for de nova consideration by the first respondent. Therefore the matter relating to genuineness of Form 18 declaration is pending in enquiry before the first W.P.(C) No.22830 Of 2009 4 respondent in that respect also. All the relevant records pertaining to such transactions are now in the custody of the first respondent. Therefore contention of the petitioner is that the proceedings now initiated by the second respondent through Ext.P7 notice is absolutely unwarranted and the same will result in parallel enquiry being proceeded by the two district authorities with respect to the very same allegations regarding genuineness of Form 18 declarations. If both the enquiry are allowed to be proceeded simultaneously the same will put the petitioner to great difficulties and hardships. In such case, the petitioner will be put to unnecessary burden of defending the case before both the authorities and it will leading to multiplicity of proceedings, is the contention. 4. Heard learned counsel for the petitioner and the Government Pleader on behalf of the respondents. According to the learned Government Pleader Ext.P7 is a proceedings initiated by the second respondent on an entirely different and distinct circumstances. The enquiry W.P.(C) No.22830 Of 2009 5 contemplated therein is on a wider basis, initiated pursuant to directions of this Court, and the same is connected with transactions of other dealers also with respect to bogus declarations issued. According to him the proposal for imposition of penalty now issued has no connection with the offence alleged in the penalty orders which had culminated in Exts.P10 and P11 appellate orders. 5. While considering the rival contentions it is noticed that, as far as the petitioner is concerned both the enquiries are relating to Form 18 declarations produced by him before the first respondent with respect to the year 2003-04. All records pertaining to the assessment year is in the custody of the first respondent. The first respondent is in seizing of the matter with respect to finalisation of assessment for the years 2003-2004. The first respondent is also dealing with the matter regarding imposition of penalty based on Exts.P10 and P11 appellate orders. The learned Counsel for the petitioner had drawn my attention to the directions contained in Ext.P6 judgment, wherein it is W.P.(C) No.22830 Of 2009 6 observed that if the Form 18 declarations are found to be bogus, it is open to the officer to conduct investigation, find out actual transactions, identify sellers and buyers liable for tax, and to proceed to levy the tax or penalty in accordance with law. Therefore, the assessing authority is empowered to take appropriate actions for imposing tax or penalty, and therefore there is no necessity for another enquiry simultaneously. At the same time it is noticed that in the proceedings under Ext.P7 the investigation is based on larger canvass connecting so many other dealers. However, as pointed out by the petitioner, parallel proceedings of two district authorities will definitely cause prejudice to the petitioner. Hence I am of the view that the proceedings now pending before the first respondent assessing authority has to be completed first and then only the second respondent need be permitted to proceed further, if it is found necessary based on the findings which may be arrived by the first respondent, that such a wider enquiry is essential. Therefore, I am of the opinion that the W.P.(C) No.22830 Of 2009 7 proceedings now proposed through Ext.P7 need be kept in abeyance till the first respondent finalise the assessment proceedings as per the directions contained in Ext.P6 judgment and the penalty proceedings as per the directions contained in Exts.P10 and P11 appellate orders. 6. In the result the writ petition is disposed of with specific direction to second respondent to keep in abeyance. Proceedings initiated under Ext.P7 notice till finalisation of the assessment proceedings by the first respondent. The first respondent is also directed to expedite the matter in finalising assessment and the penalty proceedings, as early as possible at any rate within a period of three months from the date of receipt of a copy of this judgment. C.K.ABDUL REHIM, JUDGE. app/-