IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE THE CHIEF JUSTICE MR.J.CHELAMESWAR & THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN MONDAY, THE 17TH MAY 2010 / 27TH VAISAKHA 1932 WA.No. 751 of 2010 -------------------- AGAINST THE JUDGEMENT IN WPC.9534/2010 Dated 07/04/2010 .................... APPELLANT/PETITIONER: --------------------------- M/S.KOCHI REFINERIES LTD., AMBALAMUGAL, NOW AMALGAMATED WITH BHARATH PETROLEUM CORPORATION LTD., REP. BY ITS SENIOR FINANCE MANAGER - K.SUNDARESWARA IYER. BY ADV. SRI.V.V.ASOKAN SRI.K.S.SAJEEV KUMAR SMT.RUKHIYABI MOHD KUNHI RESPONDENTS/RESPONDENTS: ---------------------------------- 1. ASSISTANT COMMISSIONER, SPECIAL CIRCLE II, COMMERCIAL TAXES, ERNAKULAM. 2. DEPUTY COMMISSIONER (APPEALS), DEPARTMENT OF COMMERCIAL TAXES, ERNAKULAM. 3. INSPECTING ASSISTANT COMMISSIONER (RECOVERY), DEPARTMENT OF COMMERCIAL TAXES, ERNAKULAM. 4. INDIAN OIL CORPORATION LTD., KERALA STATE OFFICE, PANAMPILLY NAGAR, ERNAKULAM. 5. HINDUSTHAN PETROLEUM CORPORATION LTD., ERNAKULAM. BY GOVT. PLEADER, SRI.K.P. PRADEEP. THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 17/05/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: J.Chelameswar, CJ. & P.N.Ravindran, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - - W.A.No. 751 OF 2010 - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 17th day of May, 2010 JUDGMENT J.Chelameswar, CJ. Aggrieved by the order dated 07.04.2010 in WP(C) No.9534 of 2010, by which a conditional interim order was passed in favour of the petitioner therein, the present writ appeal is filed. 2. The petitioner is a Public Sector Undertaking within the meaning of Section 617 of the Companies Act wherein substantial shares are held by the Union of India. The appellant was assessed to tax under the Kerala General Sales Tax Act/CST with respect to the assessment years 2001-02 and 2002-03. Aggrieved by those assessment orders, the appellant carried the matter in appeal before the Deputy Commissioner(2nd respondent herein). During the pendency of the said appeal, the recovery of tax assessed against the appellant was partially stayed. By four separate orders, Exts.P10 to P13, the appellate authority has passed a WA No.751 of 2010 -:2:- conditional interim order. In three of them, the appellant was called upon to deposit 40% of the tax demanded in the concerned assessment orders, while calling upon the appellant to furnish security bond for the balance of the tax amount and in the other case the stay application was totally rejected. 3. Aggrieved by the same, the appellant approached this court by way of the instant writ petition. The learned Judge by order under appeal modified the conditional order passed by the appellate authority, calling upon the appellant to deposit 20% of the tax demanded and further calling upon the appellant to furnish sufficient security for the balance amount. Not satisfied with the said order, the present appeal is filed. 4. The learned counsel for the appellant, Sri. V.V. Asokan, argued that under Section 34(5) the provisions of Kerala General Sales Tax Act, 1963 directing payment of cash is not one of the options prescribed, and therefore the learned Single Judge was not justified in calling upon the appellant to deposit 20% of the tax demanded. 5. We are of the opinion that the above submission is WA No.751 of 2010 -:3:- wholly misconceived. Section 34(5) reads as follows: “Section 34(5): Notwithstanding that an appeal has been preferred under Sub-section(4) the tax or other amounts shall be paid in accordance with the order against which the appeal has been preferred:- Provided that the appellate Assistant Commissioner may, in his discretion, give such directions as he thinks fit in regard to the payment of the tax before the disposal of the appeal, if the appellant furnishes sufficient security to his satisfaction in such form and in such manner as may be prescribed. On a perusal of the said Section it is clear that mere pendency of the appeal does not operate stay of collection of tax. The proviso only recognizes the authority of the appellate body to give such directions as it thinks fit regarding the payment of the tax. While the appellate authority directs payment of a part of the tax demanded, in substance, the appellate authority is only staying the remaining part of the demand. 6. The learned counsel also relied upon the judgment of Supreme Court in Bharat Petroleum Corporation Ltd., v. Commissioner of Sales Tax and others {[2008] 17 VST 162 WA No.751 of 2010 -:4:- (SC)}. Learned counsel relied the following passage in the said judgment. “Normally, this court does not interfere in interim matters particularly when the matter concerns levy of tax. However, this is a peculiar case for two reasons, i.e., BPCL Ltd., is a public sector company in a priority sector which is obliged to sell kerosene via PDS route. The demand is for Rs.1.34 cores(appox.)and, in the circumstances, we are of the view that to call upon BPCL at this stage to deposit a huge amount of Rs.1.34 crores (approx.) would have a serious effect on the PDS sales. On the other hand, we are satisfied that BPCL is a substantial company. It is in a sound financial position and it can discharge its liability at a later date, if need be.” 7. It may be seen from the above extract that the Supreme Court itself prefaced the order saying that normally the Supreme Court does not interfere in interim matters particularly when the matter concerns levy of tax. The relief was granted in the peculiar circumstances of the case. At any rate, in the instance case the learned Single Judge exercised the discretion by granting some relief to the appellant and we do not find any WA No.751 of 2010 -:5:- reason to interfere with the order. The appeal is without merits and therefore dismissed at the admission stage. In view of the order passed above, the learned counsel prayed that the time fixed for making the payment of the tax and providing security be enlarged. Heard learned Government Pleader. In the circumstances the appellant is permitted to comply with the order under appeal on or before 15th of June, 2010. J.Chelameswar, Chief Justice. P.N.Ravindran, Judge. ttb WA No.751 of 2010 -:6:-