IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE K.M.JOSEPH TUESDAY, THE 5TH FEBRUARY 2008 / 16TH MAGHA 1929 W.A.No.326 of 2008 ---------------------------------------- AGAINST THE JUDGEMENT IN W.P.(C).NO.2919/2008 DATED 24/01/2008 .................... APPELLANT/PETITIONER:- ------------------------------------- SREE VENKITESWARA AGENCIES, T.D. SANNIDHI ROAD, ERNAKULAM, REPRESENTED BY PARTNER, T.G. RAJARAM SHENOY. BY ADV. SRI.VIJAYAN. K.U. SRI.K.N.SREEKUMARAN RESPONDENTS/RESPONDENTS:- ------------------------------------------------ 1. ASSISTANT COMMISSIONER (AA), COMMERCIAL TAXES, SALES TAX COMPLEX, THEVARA, ERNAKULAM. 2. DEPUTY COMMISSIONER (APPEALS), COMMERCIAL TAXES, ERNAKULAM. 3. INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, ERNAKULAM AT KAKKANAD. 4. STATE OF KERALA, REPRESENTED BY THE SECRETARY (TAXES), GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. BY SENIOR GOVERNMENT PLEADER MR.MOHAMMED RAFIQ. THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 05/02/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:- H.L.Dattu,C.J. & K.M.Joseph,J. -------------------------------------------- W.A.No.326 of 2008 -------------------------------------------- Dated, this the 5th day of February, 2008 JUDGMENT K.M.Joseph,J. The appellant filed the writ petition seeking to quash Exhibit P12 and for a further direction to the 2nd respondent to dispose of Exhibits P7, P8 and P9 appeals and to stay recovery of the amount demanded as per Exhibits P10, P10(a) and P10(b) notices. (2) The appellant is a dealer in glazed tiles and sanitary fittings, registered under the provisions of the Kerala Value Added Tax Act (“KVAT Act” for short) and Central Sales Tax Act (“CST Act” for short). Case of appellant is that for the assessment years 2005-06 and 2006-07, the appellant filed monthly returns and paid all the taxes due to the Government. However, he was served with Exhibit P1 assessment order under the KVAT Act and Exhibit P1(a) order under the CST Act for the assessment year 2005-06. For the assessment year 2006-07, he was served with assessment order under the KVAT Act. Appellant submitted rectification applications, which came to be rejected. Thereupon, the appellant filed appeals. In the appeals, the appellant filed applications for stay also. The stay applications came to be disposed of by Exhibit P12 order. By Exhibit P12, the appellant has been called upon to deposit 40% of the balance demand and furnish security for the balance amount for the assessment year 2005-06, and one-third of the balance tax and furnish security for the balance tax and interest for the assessment year 2006-07 as conditions for stay ordered. The learned Single Judge repelled the contention of the appellant that the impugned order was a mechanical one and passed without adverting to the contentions of the appellant and, accordingly, dismissed the writ petition. Aggrieved by the same, the present appeal. W.A.No.326 of 2008 - 2 - (3) We heard Sri.K.U.Vijayan, learned counsel appearing for the appellant and Sri.Muhammed Rafiq, learned Senior Government Pleader appearing for the respondents. (4) We are not satisfied with the contention of the appellant that the order for payment of 40% of the balance tax for the assessment year 2005-06 and one-third of the balance tax for the assessment year 2006-07 as a condition precedent for stay is arbitrary or passed in a most mechanical manner or that the contentions raised by the appellant had been adverted to. At the stage of passing the interim order if the appellate authority found that it should be subject to the conditions as imposed, we do not see any reason to interfere with the order Exhibit P12. We remind ourselves that the orders granting stay, subject to certain conditions, are passed in the exercise of discretionary powers of the appellate authority. In exercise of the power under Article 226 of the Constitution, normally this Court would be loathe to interfere with the discretion exercised by the appellate authority unless it is found that such exercise of discretion is perverse. In the facts and circumstances of the case, we are not inclined to think that the condition imposed in so far as it directs payment of 40% of the balance demand due for the assessment year 2005-06 or one-third of the balance tax for the assessment year 2006-07 is perverse. (5) Then the learned counsel appearing for the appellant would submit that the condition in Exhibit P12 that the appellant must furnish security for the balance tax and interest to the satisfaction of the assessing authority is cumbersome. He would submit that the appellant is an assessee registered on the files of the assessing authority for the past thirty years and had not W.A.No.326 of 2008 - 3 - committed any default during the aforesaid period. We have directed the learned Government Pleader to get instructions in the matter. According to the instructions, he would submit that the said aspect pointed out by the appellant is true. In such circumstances, we would only direct that Exhibit P12 will stand modified and the appellant need only remit one-third of the balance tax for the assessment year 2006-07 and 40% of the balance amount for the assessment year 2005-06 as directed in Exhibit P12. In other words, the appellant need not furnish security for the balance tax and interest to the satisfaction of the assessing authority as directed in Exhibit P12. (6) Further, the learned counsel appearing for the appellant would submit that the appellant may be granted some more time to remit the amount as ordered in Exhibit P12. In the facts and circumstances of the case, we permit the appellant to remit the amount demanded in Exhibit P12, as upheld by us, on or before March 20, 2008. Ordered accordingly. H.L.Dattu Chief Justice K.M.Joseph Judge vku/-