IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 1ST NOVEMBER 2010 / 10TH KARTHIKA 1932 WP(C).No. 31245 of 2010(E) -------------------------- PETITIONER(S): --------------- M.NARAYANAN, PROPRIETOR OF RED ARROW, SREENIKETH, ELEMANA ROAD, TRIPPUNITHURA. BY ADV. SRI.VIJAYAN. K.U. SRI.K.N.SREEKUMARAN RESPONDENT(S): --------------- 1. INTELLIGENCE OFFICER (IB),(ERNAKULAM) DEPARTMENT OF COMMERCIAL TAXES, EDAPPALLY, KOCHI-24. 2. STATE OF KERALA REPRESENTED BY SECRETARY TO GOVERNMENT, TAXES DEPARTMENT GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. SENIOR GOVERNMENT PLEADER SRI.C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 01/11/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K. ABDUL REHIM, J ------------------------------- WP(C) NO. 31245 OF 2010 ------------------------------------- Dated this the 1st day of November, 2010 JUDGMENT Petitioner is challenging Ext.P5 order issued under Section 67 (1) of the Kerala Value Added Tax Act, 2003 (KVAT Act). Through the said order penalty to the tune of Rs.25,80,834/- was imposed on the petitioner. It is stated in the said order that, the petitioner is also liable to pay tax amounting to Rs.12,90,417/- along with interest. According to the petitioner the first respondent is lacking jurisdiction for issuing a composite order while exercising powers under Section 67(1), finalising the assessment along with imposition of penalty. It is contended that the assessment can be finalised only after resorting to the procedure contemplated either under Section 22, 23, 24 or 25 of the KVAT Act. 2. It is contended that the proposal notice issued in a composite nature as well as the order finalised imposing both penalty and assessment is unsustainable 2 WP(C) No. 31245/2010 under law. Petitioner also challenges the authority of the first respondent in imposing tax liability on the petitioner. Learned Government Pleader disputed the contention on the basis that the first respondent is also an authority empowered to finalise the assessment as per the provisions of the statute and as authorised through the relevant notification. 3. However, aggrieved by Ext.P5, the petitioner had approached the appellate authority, the additional 3rd respondent. Ext.P6 is the copy of appeal filed in this regard. The petitioner had also filed Ext.P6(a) and P6(b) applications seeking early hearing of the appeal as well as seeking stay of recovery of the amounts in dispute. 4. Since the statutory appellate authority is in seizin of the matter, I am not proposing to enter upon any findings regarding the questions raised as above. I am of the opinion that the Writ Petition can be disposed of directing the appellate authority to consider and pass appropriate orders on the appeal taking note of all contentions raised by the petitioner. 3 WP(C) No. 31245/2010 5. In the result, the Writ Petition is disposed of directing the additional 3rd respondent to consider and pass orders on Ext.P6 appeal as early as possible after affording an opportunity of hearing to the petitioner, at any rate within a period of two months from the date of receipt of a copy of this judgment. 6. Till such time orders are passed by the appellate authority as directed above, recovery of amounts covered under Ext.P5, which is initiated pursuant to Ext.P7 notice shall be kept in abeyance, provided the petitioner remits a sum of Rs.5 lakhs and furnishes security for the balance amount within a period of two weeks from the date of receipt of a copy of this judgment. 7. The petitioner will produce a copy of this judgment before the second respondent. C.K. ABDUL REHIM JUDGE dnc