IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 7TH JUNE 2011 / 17TH JYAISHTA 1933 WP(C).No. 8469 of 2011(G) ------------------------- PETITIONER(S): --------------- M/S.JACOB VELLAPPALLY & CO., S.H.MOUNT P.O., NAGAMPADAM, KOTTAYAM-686006, REP. BY ITS PROPRIETOR, MR.CYRIL JACOB VELLAPPALLY. BY ADV. SRI.JOSEPH MARKOSE, SENIOR ADVOCATE SRI.V.ABRAHAM MARKOS SRI.MATHEWS K.UTHUPPACHAN SRI.BINU MATHEW SRI.TERRY V.JAMES SRI.B.J.JOHN PRAKASH SRI.TOM THOMAS (KAKKUZHIYIL) RESPONDENT(S): --------------- 1. THE INTELLIGENCE OFFICER (IC/IB), OFFICE OF THE INSPECTING ASSISTANT COMMISSIONER (INT.), COMMERCIAL TAXES, PATHANAMTHITTA. 2. COMMERCIAL TAX OFFICER (WORKS CONTRACT), OFFICE OF THE COMMISSIONER, COMMERCIAL TAXES, KOTTAYAM. BY GOVT. PLEADER SRI.C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07/06/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 8469 of 2011(G) APPENDIX PETITIONER'S EXHIBITS : EXT.P1 : COPY OF THE CERTIFICATE OF REGISTRATION DTD.19.5.2007 EXT.P2: COPY OF THE AGREEMENT DTD.19.7.2010 EXT.P3 : COPY OF THE CONFIRMATION CERTIFICATE DTD.4.3.2011 EXT.P4 : COPY OF THE PETITIONER'S RECEIPT DTD.13.9.2010 EXT.P5 : COPY OF THE CERTIFICATE IN FORM 20E DTD.11.10.2010 EXT.P6: COPY OF THE CERTIFICATE IN FORM 20E DTD.7.1.2011 EXT.P7: COPY OF THE PETITIONER'S FIRST RUNNING ACCOUNT BILL DTD.30.12.2010 EXT.P8: COPYOF THE PRINT OUT OF THE E-RETURN DTD.14.1.2011 ALONG WITH E CHALLAN EXT.P9: COPY OF THE ACKNOWLEDGMENT IN FORM 10J DTD.19.1.2011 EXT.P10: COPY OF THE NOTICE DTD.12.11.2010 EXT.P11 : COPY OF THE POSTAL COVER UNDER WHICH EXT.P10 NOTICE WAS RECEIVED. EXT.P12: COPY OF THE PETITIONER'S REPLY DTD.28.2.2011 EXT.P13: COPY OF LETTER AND ACKNOWLEDGMENT FOR EXT.P12 RECEIVED FROM THE 1ST RESPONDENT. EXT.P14: COPY OF THE ORDER PREDATED AS ON 7.3.2011 RESPONDENT'S EXHIBITS: NIL //TRUE COPY// P.A TO JUDGE C.K.ABDUL REHIM, J --------------------------------------- W.P(C) No.8469 of 2011-G ---------------------------------------- Dated this the 7th day of June, 2011. J U D G M E N T Ext.14 order through which penalty was imposed against the petitioner under Section 67(1) of the Kerala Value Added Tax Act, 2003 (KVAT Act) is under challenge in this writ petition. Under normal circumstances this Court may not entertain a challenge against the proceedings, in view of the effective alternative remedy of appeal provided under the statute. But in the case at hand, specific contention of the petitioner is that, the order of penalty was issued in violation of mandatory procedures prescribed under Section 67(3) of the Act and also in violation of principles of natural justice. It is the specific contention that no opportunity of personal hearing, as contemplated under Section 67(3), was afforded before finalising the proceedings. It is also contended that the objections filed by the petitioner against the proposal for imposing penalty has not been considered in its real perspective. It is W.P(C) No.8469 of 2011-G 2 contended that the proposal for imposing penalty was confirmed in a mechanical manner without proper application of mind. 2. It is noticed that the penalty was imposed on the basis of an allegation that the petitioner had failed to disclose a contract which they have undertaken, through the quarterly return filed, within one month of finalisation of the agreement. Contention of the petitioner is that, the contract in question was commenced only in the quarter beginning on 1.10.2010, and the same was duly disclosed in the returns filed for the relevant quarter. In support of the above contentions the petitioner also relies on the certificates issued by the assessing authority as per Exts.P5 and P6, in from No.20E. 3. However, it is evident from Ext.P14 that the objections raised in this regard was discarded without affording an opportunity of hearing to the petitioner. Learned Government Pleader appearing for the respondents is also not in a position to dispute the factum of non- W.P(C) No.8469 of 2011-G 3 hearing. Hence, I am of the opinion that the order imposing penalty was finalised without proper compliance of the procedure contemplated under Section 67(3). It is held by this Court in a recent decision in Suzion Infrastructure Service Ltd. V. Commercial Tax Officer (W.C), Ernakulam (2010(3) KHC 299 (Ker ) that the opportunity for hearing contemplated in identical provisions, is not an empty formality and that any violation of such procedure will vitiate the proceedings. 4. On the facts of this case, I am of the view that the impugned order could not stand the test of sustainability on the basis of the settled legal proposition. 5. Under the above circumstances, the writ petition is allowed and Ext.P14 order is hereby quashed. The 1st respondent is directed to finalise the matter afresh, after affording a reasonable opportunity of hearing to the petitioner. Needless to say that the petitioner shall be permitted to adduce evidence in support of the contentions raised by producing all relevant materials and documents. W.P(C) No.8469 of 2011-G 4 6. Fresh orders in this regard shall be issued by the 1st respondent as early as possible, at any rate, within a period of one month from the date of receipt of a copy of this judgment. C.K.ABDUL REHIM JUDGE ab