IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 8TH DECEMBER 2010 / 17TH AGRAHAYANA 1932 WP(C).No. 36399 of 2010(Y) --------------------------------------- PETITIONER: ------------------- NEOTERIC INFORMATIQUE LTD G-173, PANAMPILLY NAGAR, KOCHI 682 036, REPRESENTED BY SRI.A.SARATH KUMAR, BRANCH ACCOUNTANT & POWER OF ATTORNEY HOLDER. BY ADVS. SRI.VIJAYAN. K.U, SRI.K.N.SREEKUMAR. RESPONDENTS: ------------------------ 1. ASSISTANT COMMISSIONER (ASSMT.,) K V A T SPECIAL CIRCLE III, COMMERCIAL TAXES, ERNAKULAM- 682 015. 2. DEPUTY COMMISSIONER (APPEALS), COMMERCIAL TAXES, ERNAKULAM, PIN- 682 015. 3. INSPECTING ASST. COMMISSIONER, COMMERCIAL TAXES, ERNAKULAM AT KAKKANAD PIN -682 031. 4. STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, PIN- 695 001. R1 TO R4 BY GOVT. PLEADER SRI. V.K. SHAMSUDHEEN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08/12/2010,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: prv. C.K.ABDUL REHIM,J. ------------------------------- WP(C).NO. 36399 of 2010 --------------------------------- Dated this the 8th day of December, 2010 JUDGMENT Ext.P4 common order of interim stay issued by the 2nd respondent is under challenge in this writ petition. With respect to appeals filed against the assessments for the years 2006-07 to 2009-2010, the petitioner had approached the 2nd respondent with stay petitions seeking stay of the collection of tax amount in dispute. Through Ext.P4 the 2nd respondent had granted interim stay subject to condition of the petitioner remitting 25% of the total amount due and on furnishing security bond for the balance amount. 2. According to the petitioner, the tax liability under the relevant assessment years were only due to rejection of the claim for exemption on the basis that the petitioner has not produced the required F-Form declarations before the assessing authority. It is specifically mentioned that all the F-Forms along with the copies of transporting documents were produced before the 2nd respondent at the time of hearing of the interim applications. It WP(C) .36399/2010 2 is the contention of the petitioner that if the F-Forms produced before the appellate authority is properly adverted to, it will be revealed that there is no further liability. Therefore insistence for payment of 25% of the tax amount was not at all warranted, is the contention. 3. On a perusal of Ext.P4 order of the 2nd respondent it is evident that at the time of hearing on the interim applications, the petitioner had produced certain F-Forms along with transporting documents, and considering such documents the appellate authority had observed that the petitioner was successful in establishing a prima facie case for granting conditional stay. Accordingly, the interim stay was granted insisting condition for payment of 25%. 4. Learned counsel for the petitioner submitted that the appellate authority, eventhough had admitted that the petitioner had produced F-Forms, had failed to have a proper advertence to those documents. The appellate authority has not considered those documents to ascertain whether those are genuine declarations and if those declarations were accepted whether there will be any further liability on the petitioner. Under these WP(C) .36399/2010 3 circumstances contention of the learned counsel is that there was failure on the part of the appellate authority to have proper appreciation of the matter in view of the documents produced. Learned counsel made reliance on a decision of the Hon'ble Supreme Court in Ravi Gupta vs. Commissioner of Sales tax and another (2009 (22 VST) 529) and contended that it will be undesirable on the part of the appellate authority to require the assessee to pay any substantive part of the demand even in a case where a cursory glance of the material will reveal that the assessments has no legs to stand. 5. Heard; learned Government Pleader appearing on behalf of the respondents. It is contended that it is only because the F Form declarations were produced before the appellate authority, that authority had arrived at a conclusion that a prima facie case was established. It is only on that basis the authority had granted stay with respect to 75% of the amount in demand. It is vehemently contended that imposition of a condition is a matter coming within the discretion of the appellate authority and that appellate authority is not expected to make a full evaluation of the documents produced in support of the grounds raised in WP(C) .36399/2010 4 the appeal at the stage of passing interim orders. Therefore interference under Article 226 is not at all warranted, is the contention. 6. Considering the rival submissions, I am of the view that Ext.P4 order impugned in this writ petition does not vitiate from any illegality or irregularity. It is evident that the appellate authority had adverted to all the grounds raised in the appeal and considering such grounds with proper application of mind the appellate authority had arrived at a conclusion that a prima facie case was established. It is submitted by learned Government Pleader that the appellate authority is not expected to have a complete verification of the documents, as if he is disposing the appeal, at the time when the interim applications are considered. 7. However in the case at hand, specific contention of the petitioner is that, F Form declarations and transporting documents produced before the appellate authority will prove that the petitioner is entitled for a total exemption claimed, and that he will not be liable for payment of any tax amount. It is noticed that eventhough the appellate authority had observed that F Forms and transporting documents were produced, nothing WP(C) .36399/2010 5 is stated as to whether the turn over covered under those documents will exonerate the petitioner from the liability. Therefore, I am of the view that the matter requires reconsideration at the hands of the appellate authority to ascertain whether the documents produced will substantiate the claim of the petitioner. 8. Hence, eventhough I am not inclined to interfere with Ext.P4 order on the basis of the merits of the contentions raised, I am of the view that a reconsideration of the matter on the basis of the observations made above is justified. 9. Accordingly, the writ petition is disposed of quashing Ext.P4. The 2nd respondent is directed to pass fresh orders on the interim applications filed along with Appeal (KVATA) Nos. 3689/2010, 3690/2010,3691/2010 and 3692 of 2010, after affording an opportunity of further hearing to the petitioner. Fresh orders in this regard shall be issued as early as possible, at any rate within a period of one month from the date of receipt of a copy of this judgment. 10. Needless to say that recovery of the amounts covered under the impugned assessments shall be kept in abeyance till WP(C) .36399/2010 6 fresh orders are passed by the 2nd respondent in compliance with the above directions. C.K.ABDUL REHIM,JUDGE pmn/