IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM FRIDAY, THE 23RD DAY OF DECEMBER 2011/2ND POUSHA 1933 WPC.No. 10614 of 2011 (B) ------------------------- PETITIONER: ------------------ M/S. SUNIL STEELS, PODIYADI P.O., THIRUVALLA, REPRESENTED BY ITS MANAGING PARTNER, SRI. SUNIL GEORGE OOMMEN. BY ADVS.SRI.ANIL D. NAIR SRI.J.R.PREM NAVAZ SMT. NIVEDITA A. KAMATH RESPONDENTS: ---------------------- 1. THE INTELLIGENCE OFFICER, SQUAD NO.II, COMMERCIAL TAXES, THIRUVALLA-689101 2. THE INSPECTING ASSISTANT COMMISSIONER, PATHANAMTHITTA-689645 3. THE STATE OF KERALA, REPRESENTED BY ITS SECRETARY (TAXES), THIRUVANANTHAPURAM-695001 R BY GOVERNMENT PLEADER SRI.S.SUDHISH KUMAR THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 23-12-2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC.No. 10614 of 2011 (B) APPENDIX PETITIONERS EXHIBITS P1 COPY OF THE STOP INSPECTION REPORT(S.I.R.) DATED 30-12-2009 ISSUED TO THE PETITIONER BY THE FIRST RESPONDENT P2 COPY OF THE STOP INSPECTION REPORT (S.I.R) DATED 30-12-2009 ISSUED TO THE PETITIONER BY THE FIRST RESPONDENT P3 COPY OF THE STOP INSPECTION REPORT (S.I.R.) DATED 30-12-2009 ISSUED TO THE PETITIONER BY THE FIRST RESPONDENT P4 COPY OF THE ORDER DATED 19-8-2010 ISSUED BY THE FIRST RESPONDENT TO THE PETITONER P5 COPY OF THE JUDGMENT IN DATED 11-10-2010 IN W.P.C. NO.27811 OF 2010 P6 COPY OF THE LETTER DATED 29-10-2010 ALONG WITH ITS ANNEXURES SUBMITTED BY THE PETITIONER TO THE FIRST RESPONDENT P7 COPY OF THE REPLY DATED 29-10-2010 SUBMITTED BY THE PETITONER TO THE FIRST RESPONDENT P8 COPY OF THE NOTICE DATED 3-1-2011 ISSUED BY THE FIRST RESPONDENT TO THE PETITONER P9 COPY OF THE LETTER DATED 6-1-2011 SUBMITTED BY THE PETITIONER P10 COPY OF THE NOTICE DATED 19-1-2011 ISSUED TO THE PETITONER BY THE FIRST RESPONDENT P11 COPY OF THE REPLY DATED 28-1-2011 SUBMITTED BY THE PETITIONER TO THE FIRST RESPONDENT P12 COPY OF THE ORDER DATED 19-3-2011 ISSUED TO THE PETITIONER BY THE FIRST RESPONDENT RESPONDENTS EXHIBITS NIL TRUE COPY SMM P.A. TO JUDGE C.K.ABDUL REHIM,J. --------------------------------- W.P.(C) No. 10614 OF 2011 --------------------------------- Dated this the 23th day of December , 2011 J U D G M E N T Challenge in this writ petition is against Ext.P12, order through which penalty was imposed against the petitioner under section 67(1) of Kerala Value Added Tax Act, 2003 (KVAT Act). 2. It is noticed that in an earlier round of litigation, in Ext.P5 judgment, this court had quashed a similar order passed by the same authority(Ext.P4) observing that imposition of penalty under Section 67(1) is of penal consequences in which compliance of principles of natural justice is mandatory. It was observed that since the petitioner was denied of an opportunity to file objections and opportunity of personal hearing, the said order is not sustainable. In Ext.P5, judgment this court quashed the order and directed the first respondent to permit the petitioner to file objections against the proposal notice W.P.(C) No. 10614 OF 2011 2 within a period of 3 weeks . The first respondent was directed to afford opportunity to the petitioner for production of the documents and books of accounts in support of his contentions. It was specifically directed that the petitioner shall be afforded with an opportunity of personal hearing before the finalisation of the proceedings. 3. It is evident that pursuant to Ext.P5 judgment, a fresh proposal notice was issued by the first respondent, as per Ext.P10. It is further evident that the petitioner had submitted detailed objections to Ext.P10, as per Ext.P11, which was seem received by first respondent on 28/1/2011, ie, within time stipulated in Ext.P10 notice. Through Ext.P10 notice an opportunity of personal hearing was afforded on 25/1/2011. According to the petitioner, Ext.P11 objections could be submitted only after the date stipulated for hearing because service of Ext.P10 on the petitioner was only on 19/1/2011. However, the endorsement contained in Ext.P11 indicates that the objection was received on 28/1/2011. It is also contented by the petitioner that on W.P.(C) No. 10614 OF 2011 3 25/1/2011, the date on which the hearing was posted, the first respondent was not available in the office. Considering Ext.P11, the first respondent had confirmed the earlier order and imposed penalty through Ext.P4. It is pertinent to note that, inspite of specific direction issued in Ext.P5 judgment to afford an opportunity of personal hearing, nowhere it is mentioned in Ext.P12 that any such opportunity has been afforded. Learned counsel for the petitioner submitted that after receipt of the objections, no personal hearing was afforded as directed. It is pointed out that under Section 67(3) of KVAT Act a personal hearing is mandatory before passing any order imposing penalty. 4. Ext.P12 contains a statement that the dealer is not caring to co-operate with the department in the completion of the accounts checking as directed by the Honourable High Court of Kerala.. They simply say the 'SIR' taken is defective. If the dealer is not co-operating,how a defect if any, can be rectified? But it is pertinent to note that in Ext.P5 judgment, this court has not issued any specific W.P.(C) No. 10614 OF 2011 4 direction to the petitioner for the production of books of accounts. On the other hand, only an opportunity was afforded to the petitioner to produce documents and books of accounts in support of his contentions, if he so advised. But there was a specific direction issued to the first respondent to afford an opportunity of personal hearing to the petitioner . This is in view of the fact that an earlier order was quashed on the specific ground that there is non compliance of principles of natural justice. But still the first respondent has not cared to comply with such direction and to afford an opportunity of personal hearing as mandated under the relevant provision. If the petitioner is not co operating with finalization of the matter, the first respondent would have recorded such non co-operation or any non appearance for hearing, after he would have afforded with specific opportunity for such personal hearing, by intimating the posting of the matter for personal hearing on a specific date. Without complying with such mandatory procedure, the first respondent is making W.P.(C) No. 10614 OF 2011 5 observations against non co-operation of the petitioner. Even if there is any non co-operation from the side of the petitioner in producing books of accounts that will not in any way entitle the first respondent to deny the opportunity for personal hearing which is mandated under the provisions. Therefore, there is absolutely no justification to deny any such an opportunity of personal hearing. 5. Under the above mentioned circumstances, I am of the view that Ext.P12 is issued in total discard of the specific directions contained in Ext.P5 judgment, and the non compliance of the mandatory procedure provided under the statute is writ at large on the face of the order impugned. Therefore, I am of the considered opinion that the impugned order is unsustainable in the eye of law . 6. In the result, the writ petition is allowed. Ext.P12 is here by quashed. The first respondent is directed to consider the matter in the light of Ext.P11 objections after affording a specific opportunity of personal hearing which should be intimated in advance to the petitioner. The fresh W.P.(C) No. 10614 OF 2011 6 orders in this regard shall be issued as early as possible, after compliance of the directions, at any rate within one month from the date of receipt of copy of this judgment. C.K.ABDUL REHIM JUDGE smm W.P.(C) No. 10614 OF 2011 7