IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN TUESDAY, THE 24TH MARCH 2009 / 3RD CHAITHRA 1931 ST.Appl..No. 3 of 2007() ------------------------ AGAINST THE ORDER DATED 01/03/2007 IN CT(1) & R3-1833/06/CT & ORDER.R2-59331/2005 of COMMR. OF COMMERCIAL TAXES, TRIVANDRUM .................... APPELLANT ----------------------------- P.MOIDEENKUTTY, PARVATH HOUSE, CHEMMANKADAVU, MALAPPURAM. BY ADV. SRI.P.RAGHUNATH SRI.PREMJIT NAGENDRAN RESPONDENT(S): --------------- 1. INTELLIGENCE OFFICER, SQUARD NO.1, MALAPPURAM. 2. DEPUTY COMMISSIONER OF COM.TAXES, MALAPPURAM. 3. COMMISSIONER OF CO.TAXES, THIRUVANANTHAPURAM. BY GOVERNMENT PLEADER SRI. V.K. SHAMSUDEEN THIS SALES TAX APPEAL HAVING BEEN FINALLY HEARD ON 24/03/2009, ALONG WITH STA 4 OF 2007, WPC NO. 13064 OF 2007 AND WPC 13042 OF 2007, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR & K. SURENDRA MOHAN, JJ. -------------------------------------------- S.T. A. Nos. 3 & 4 OF 2007 & W.P.C. Nos. 13042 & 13064 of 2007 -------------------------------------------- Dated this the 24th day of March, 2009 JUDGMENT Ramachandran Nair,J. Connected Sales Tax Appeals and Writ Petitions arise from the common order of the Commissioner issued under Section 37 of the KGST Act, setting aside the order of the Deputy Commissioner and remanding the matter back to the Intelligence Officer for fresh enquiry and adjudication on the proposal for penalty initiated against appellants/petitioners. We have heard counsel appearing for the appellants/petitioners and Government Pleader for the respondents. 2. Penalty orders issued under Section 45A of the Act were set aside and remanded by the Deputy Commissioner with certain observations. Appellants/petitioners filed second revisions against these orders before the Commissioner of Commercial Tax under Section 45A(3) of the Act and the Commissioner, after receipt of revision petitions, initiated suo motu action to set aside the orders of the Deputy Commissioner, which was subject matter of revisions filed by the appellants/petitioners. Even though in the appeals and Writ 2 Petitions appellants/petitioners have questioned the authority of the Commissioner to initiate proceedings under Section 37, during hearing counsel for the appellants/petitioners has given up the challenge against jurisdiction of the Commissioner to issue orders under Section 37. The challenge is therefore confined to the order of the Commissioner on merits. It is also pointed out that when notice under Section 37 was challenged, this Court directed the Commissioner to consider jurisdictional issue and the justification for initiating proceedings as a preliminary issue. However, counsel for the appellants/petitioners submitted that Commissioner did not comply with the direction issued by this Court. On the contrary he disposed of the revisions filed by the appellants/petitioners and the suo motu proceedings initiated under Section 37 by a common order. 3. We find that powers under Section 37 are available to the Commissioner under Section 45A(5) of the Act as well whereunder the Commissioner while disposing of the revision petition filed by the aggrieved party can pass any orders as he deems fit. He is also given suo motu power to revise an order issued by the Deputy Commissioner under Section 45A(3) of the Act. In other words, when revision is filed against the order passed by the Deputy Commissioner under Section 3 45A such revision has to be disposed of along with proceedings initiated by the Commissioner under Section 37 of the Act. Even if notices are issued under Section 37 in the course of hearing of revision under Section 45A(5) Commissioner has the power to pass any order as he deems fit. The allegation of the appellants/petitioners that Commissioner has violated the judgment of this Court is not correct because while disposing of the proceedings initiated under Section 37 Commissioner has considered petitioners/appellants' preliminary objection as well. All what he did was that he did not issue a separate order on the preliminary question raised. This is probably because petitioners/appellants raised objection not only on the preliminary issue of jurisdiction but argued the case on merits as well. Therefore the Commissioner rightly disposed of the revisions and the suo motu proceedings initiated by him under Section 37 on merits. We do not find any violation of the judgment of this Court by the Commissioner. 4. So far as the challenge against impugned order on merits is concerned, we do not find any ground to interfere with the order of the Commissioner because it is an open remand and appellants/petitioners' grievance is only against that part of the order of the Commissioner expunging observations of the Deputy Commissioner. Deputy 4 Commissioner has given specific directions to the Intelligence Officer about the enquiry he should conduct. All what the Commissioner has done is to remove such observations so that full powers are left to the Intelligence Officer while adjudicating the matter. We do not think petitioners/appellants can have any grievance against open enquiry being conducted by the Intelligence Officer. There is nothing to indicate that rights are affected in any way to defend action if any proposed against them. STAs and WPs are therefore dismissed upholding the order of the Commissioner. Since the matter is pending for long, we direct the Intelligence Officer to complete the proceedings within four months from now. Government Pleader will communicate a copy of this judgment to the Intelligence Officer for compliance. (C.N.RAMACHANDRAN NAIR) Judge. (K. SURENDRA MOHAN) Judge. kk 5