IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON WEDNESDAY, THE 15TH SEPTEMBER 2010 / 24TH BHADRA 1932 WP(C).No. 30292 of 2006(F) -------------------------- PETITIONER(S): ----------------------- M/S. NEPTUNE READYMIX CONCRETE PVT.LTD., PLOT NO.VI/5 8 AND 59, INDUSTRIAL DEVELOPMENT AREA, EDAYAR, MUPPATHADAM P.O., KOCHI, REPRESENTED BY THE MANAGING DIRECTOR, ALEX THOMAS. BY ADVS. SRI.VIJAYAN. K.U. SRI.K.N.SREEKUMARAN SRI.JINU.K.MOHAN RESPONDENT(S): ------------------------ 1. THE INTELLIGENCE OFFICER, SPECIAL SQUAD (RUBBER) SQUAD NO.IV, OFFICE OF THE DEPUTY COMMISSIONER (INTELLIGENCE), COMMERCIAL TAXES, ERNAKULAM. 2. THE DEPUTY COMMISSIONER, COMMERCIAL TAXES, ERNAKULAM. 3. THE INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, ERNAKULAM. 4. THE ASSISTANT COMMISSIONER (KVAT), COMMERCIAL TAXES SPECIAL CIRCLE III, ERNAKULAM. GOVERNMENT PLEADER MR.K.P.PRADEEP THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 15/09/2010 ALONG WITH WPC NO. 5930 OF 2008 , THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: jvt WP(C).No. 30292 of 2006 APPENDIX Petitioner's Exhibits :- Ext.P1 :- Copy of order No.ENO/95-96/03-04 dated 19-04-2006 issued by the 1st respondent. Ext.P2 :- Copy of Order No.ENO/05-06-04-05 dated 03-05-2006 issued by the 1st respondent. Ext.P3 :- Copy of Application in Form No.31A dated 30-05-2006 presented before the 2nd respondent. Ext.P4 :- Copy of Application for Stay dated 30-05-2006 presented before the 2nd respondent. Ext.P5 :- Copy of Application for Urgent Hearing dated 30-05-2006 presented before the 2nd respondent. Ext.P6 :- Copy of Application in Form No.31A dated 30-05-2006 presented before the 2nd respondent. Ext.P7 :- Copy of Application for Stay dated 30-05-2006 presented before the 2nd respondent. Ext.P8 :- Copy of Application for Urgent Hearing dated 30-05-2006 presented before the 2nd respondent. Ext.P9 :- Copy of Notice No.C-1-3590/06 dated 05-06-2006 issued by the 2nd respondent. Ext.P10 :- Copy of Notice No.C-1-3591/06 dated 05-06-2006 issued by the 2nd respondent. Ext.P11 :- Copy of letter dated 12-06-2006 presented before the 2nd respondent. Ext.P12 :- Copy of letter dated 12-06-2006 presented before the 2nd respondent. Ext.P13 :- Copy of Notice No.C1-3591/06 dated 25-10-2006 issued by the 2nd respondent. Ext.P14 :- Copy of Invoice No.290 dated 29-06-2006 issued by the Petitioner. Ext.P15 :- Copy of Debit Note No.648 dated 29-06-2006 issued by the petitioner. Ext.P16 :- Copy of Profit & Loss Account for the year ending 31-3-2004 of the petitioner 1st respondent. WP(C).No. 30292 of 2006 Ext.P17 :- Copy of Profit & Loss Account for the year ending 31-3-2005 of the petitioner 1st respondent. Ext.P18 :- Copy of Notice No.CC.1044 dated 19-08-2006 issued by the 1st respondent. Ext.P19 :- Copy of Notice No.CC.1044 dated 19-08-2006 issued by the 1st respondent. Ext.P20 :- Copy of Judgment in W.P.(C) No.23275/2006 dated 1-9-2006. Ext.P21 :- Copy of Notice No.A5-3187/06 dated 30-08-2006 issued by the 3rd respondent. Ext.P22 :- Copy of Notice No.A5-3186/06 dated 30-08-2006 issued by the 3rd respondent. Respondent's Exhibits :- NIL //True Copy// P.A. to Judge (CR) P.R. RAMACHANDRA MENON J. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ W.P. (C) Nos. 30292 of 2006 & 5930 of 2008 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Dated, this the 15th day of September, 2010 JUDGMENT The basic issue involved in both these Writ Petitions relates to the liability to satisfy the 'additional court fee' to an extent of 0.5 % of the disputed amount, payable to the 'legal benefit fund', to have entertained the 'application' preferred by the petitioner under Sub Section (3) or (5) of Section 45A, against the order imposing penalty under Section 45 A (1) of the KGST Act, when the relevant notification issued in this regard stipulates payment of such additional court fee only in respect of 'appeals/revisions'. 2. The sequence of events as narrated in both the Writ Petitions shows that, the petitioner was imposed with penalty under Section 45 A (1) of the KGST Act, in respect of the assessment years 2003 -'04 and 2004 -'05, fixing a total liability of nearly 1.36 Crores. Being aggrieved of the same, the petitioner preferred an 'application' before the second respondent, as provided under sub Section 3 to Section 45 A, seeking for immediate interference, which was refused to be entertained for not having satisfied the additional court fee. This made the petitioner to approach this Court, by filing, W.P. (C) 30292 of 2006, which was W.P. (C) Nos. 30292 of 2010 and 5930 of 2008 : 2 : admitted on 16.11.2006, also passing an interim order, directing the matter to be entertained, on condition that the petitioner furnished 'bank guarantee' for the amount equal to the additional court fee stated as payable. It was also made clear that, all the prayers raised in the Writ Petition, except prayer No. 3 would stand barred by the principles of 'res judicata' in view of Ext. P20 judgment. 3. The learned counsel for the petitioner submits that, the second respondent considered the matter and the liability was reduced to a considerable extent, bringing it down to nearly Rs. 86 lakhs, in respect of the two assessment years. Since the petitioner was denied the complete relief, it was subjected to further challenge by filing another 'application' under sub Section 5 of Section 45 A before the 3rd respondent. This time also, it was refused to be entertained for want of satisfaction of the additional court fee, which made the petitioner to file the second Writ Petition i.e. W.P(C) 5930 of 2008, wherein also, similar interim order was passed on 21.2.2008, directing to entertain the matter on condition that petitioner furnished 'bank guarantee' to the extent as specified. It is stated that the petitioner has furnished bank guarantee and that the matter is still pending consideration before the 3rd respondent. W.P. (C) Nos. 30292 of 2010 and 5930 of 2008 : 3 : 4. The learned counsel brought it to the notice of this Court that, during the pendency of the above proceedings, the Government declared the 'Amnesty Scheme' and availing the benefit thereunder, the liability has already been settled, however without prejudice to the challenge already raised in respect of the extent of penalty imposed by pursuing the matter before the 3rd respondent/Commissioner, besides the issue with regard to the liability to pay additional court fee. The learned counsel submits that, the issue involved in both these Writ Petitions will stand confined to the justifiability of demanding the 'additional court fee' to have entertained the 'applications' preferred under sub Sections 3 and 5 of Section 45 A. 5. Heard the learned Government Pleader as well. 6. The learned counsel for the petitioner submits that, the enabling provision to realize the additional court fee is pursuant to the notification bearing No. SRO 226/02, which has been issued by the Government in exercise of the power under sub Section (1) to Section 76 of the Kerala Court Fess and Suits Valuation Act, 1959. The said notification is extracted hereunder, for the purpose of convenience of reference. W.P. (C) Nos. 30292 of 2010 and 5930 of 2008 : 4 : Notification S.R.O. No. 226/2002 (published in Kerala Gazette Extraordinary No. 420 dated April 5, 2002) --- In exercise of the powers conferred by sub-section (1) of section 76 of the Kerala Court Fees and Suits Valuation Act, 1959, the Government of Kerala hereby authorise the levy by the Tribunal and appellate authorities constituted by or under any special or local law, other than civil and criminal courts of additional court fee in respect of each appeal or revision at the rate of 0.5 percent of the amount involved in the dispute in cases where it is capable of valuation and in other cases at the rate of rupees fifty in each such case. The amount so collected shall be credited to the Kerala Legal Benefit Fund constituted under sub- section (2) of section 76 of the Kerala Court Fees and Suits Valuation Act, 1959. Eventhough, validity of the said notification was subjected to challenge by some of the aggrieved persons before this Court, it was upheld as per the decision reported in A.P. Ismail(Anwar Traders) Vs. State of Kerala (2005 (3) KLT 1052). Referring to the contents of the above notification and also the conclusion reached by this Court as contained in the concluding paragraph, it is contended that imposition of the such W.P. (C) Nos. 30292 of 2010 and 5930 of 2008 : 5 : additional court fee/realization of the such additional court fee is contemplated only in “appeal/revision”, that too, in the case of “assessment orders”, whereas in the instant case, the concerned proceedings filed before the respondents 2 and 3 are never by way of any appeal or revision but an “application” as specifically provided under sub Sections (3) and (5) of Section 45 A. It is also stated that, the remedy by way of 'appeal/revision' has been dealt with under Chapter VII of the KGST Act; while the enabling provisions to challenge the order passed under Section 45 A (1) and then under Section 45 A (3) by filing 'application' are incorporated under Chapter VIII. Placing emphasis on the word “application” as it appears under Sub sections 3 and 5 of 45A of the KGST Act, the learned counsel submits that such proceedings can never be equated as 'appeal/revision', so as to realize any additional court fee and as such, the petitioner is liable to be absolved from the 'bank guarantee' and the proceedings are to be finalized without payment of any additional court fee. 7. The learned Government Pleader submits that, the validity of the above notification has already been upheld by a learned Single Judge of this Court in A.P.Ismail (Anwar Traders) Vs, State of Kerala (2005 (3) KLT 1052) and by a Division Bench of this Court in W.P. (C) Nos. 30292 of 2010 and 5930 of 2008 : 6 : Chackolas Spinning & Weaving Mill Ltd. Vs. State of Kerala (2006 (1) KLT 989), though further challenge has been raised by the aggrieved party before the Apex Court, where the SLP preferred has been admitted and the same is pending. The learned Government Pleader further submits that, the idea and understanding of the petitioner as to the scope of the proceedings under Sub Sections 3 and 5 of the Section 45A are quite wrong and misconceived and that 'purposive interpretation' has to be made, to give effect to the statutory prescription, more so in view of the law declared by the Apex Court in Dilip S. Dahankur Vs. Kotak Mahindra Co. Ltd. [(2007) 6 SCC 528) (Paragraph 54) and also in Chairman, Indore Vikas Pradhikaran VS. Pure Industrial Coke and Chemical Ltd. [(2007) 8 SCC 705) (Paragraph 88 onwards). 8. The learned Government Pleader further submits that the conclusion made by the learned Single Judge of this Court in the last paragraph of the decision reported in A.P. Ismail (Anwar Traders) Vs, State of Kerala (2005 (3) KLT 1052) , (serial No. iii) is not correct or sustainable, fixing the scope and extent of the notification in respect of the assessment years commencing only from April, 2002 and that the aggrieved party i.e. Trustee Committee of the Legal Benefit Fund has W.P. (C) Nos. 30292 of 2010 and 5930 of 2008 : 7 : already preferred an appeal before this Court as W.A. No. 901 of 2010, which has been admitted and is pending along with other connected matters. It is also contended that the petitioner cannot press any relief as now projected, mainly for the reason that, neither the State of Kerala nor the Trustee Committee of the Legal Benefit Fund, is a party to these writ petitions. 9. Coming to the challenge raised from the part of the petitioner as to the scope of the notification, the mandate under the enabling provisions i.e. sub Sections 3 and 5 of Section 45 A and the scope of the observations made by the learned Single Judge of this Court in the concluding paragraph of the decision rendered in A.P. Ismail (Anwar Traders) Vs, State of Kerala (2005 (3) KLT 1052) , the first and foremost submission of the petitioner is that, the word used under sub Sections 3 and 5 of 45 A of the KGST Act is “application” and not “appeal/revision”. Since the notification clearly stipulates satisfaction of the additional court fee only in respect of the 'appeal/revision', no such additional court fee is liable to be paid by the petitioner in respect of an 'application' as aforesaid. 10. True, the word used under Sub Sections 3 and 5 of Section 45 A is “application” and not 'appeal/revision'. But the question to be W.P. (C) Nos. 30292 of 2010 and 5930 of 2008 : 8 : considered is whether such 'application' is intended to be considered by the 'original authority' or by any other authority who is conferred with the power of appeal/revision. Unlike the power for rectification of the error or the power of review, the “application” as mentioned in Sub Sections 3 and 5 of 45 A is to be filed, not before the 'original authority' but before the 'higher authority/still higher authority'. The Scheme of the Statute shows that, if anybody is aggrieved of the order imposing penalty under Section 45A (1), the next course is to file the appropriate proceeding before the Deputy Commissioner under sub Section 3 and if still aggrieved, the party is at liberty to approach the Commissioner, who is still the higher authority, under sub Section 5. This shows that the power being exercised by the said 'higher authority' is not in the course of any 'original power', but by virtue of the power conferred upon the appellate/rivisional authority contemplated under the Statute. By virtue of the mandate under the relevant provisions, such higher authorities are vested with powers to set aside or modify the impugned order or to remand the matter to be considered by the original authority for passing fresh orders. In other words, the power sought to be exercised by the 'higher authority' is never with reference to the original power the challenge is against the orders passed by the original W.P. (C) Nos. 30292 of 2010 and 5930 of 2008 : 9 : authority; as specified. To put it more clear, it is akin to power of the authority in appeal/revision. As such, merely for the reason that the term/word used in Sub Sections 3 and 5 of Section 45 A is “application”, it cannot be said that, it is not with reference to any 'appeal/revision' and hence no additional court fee shall be levied for entertaining the proceedings under the above provisions. This is also in view of the settled rules of interpretation, so as to give effect to the statute as made clear by the Apex Court in the decision cited supra. 11. Coming to the submission made by the learned counsel for the petitioner with reference to the observations made by a Single Judge of this Court in the concluding paragraph of the decision reported in Ismail Vs, State of Kerala (2005 (3) KLT 1052) , it is true that , it has been observed under the heand 'conclusions' as follows: iii. Such fee is payable only on appeals/revisions arising from assessment orders issued in relation to and from the assessment year in which the said notification was issued on April, 5 2002 (emphasis supplied). In view of the said observation, it is contended that such additional court fee can be realized only in respect of the 'assessment orders' W.P. (C) Nos. 30292 of 2010 and 5930 of 2008 : 10 : and no such additional court fee is payable by the petitioner since the impugned order is not an assessment order, but an order imposing 'penalty'. The primary question to be considered is, whether the said observation is with reference to the specific question or point raised in this regard. Going by the discussion in the verdict, it is evident that no such point was ever mooted before the learned Single Judge, seeking to draw a distinction between the 'assessment order' and 'penalty order'. That apart, the notification as extracted above makes a reference to the appeals/revision to be preferred before the Tribunal and other appellate authorities as specified and nowhere in the notification, has it been stated that the requirement to satisfy the additional court fee is confined to the assessment orders alone, so as to exclude the orders imposing penalty. Since, the learned Single Judge was considering only the validity of the notification, which has been upheld, the notification has to be given effect to as it is. It takes care of both the situations in respect of the assessment orders and the orders imposing penalty. This being the position, the contentions raised by the petitioner, isolating the said observation in the concluding paragraph, does not hold any water at all. W.P. (C) Nos. 30292 of 2010 and 5930 of 2008 : 11 : 12. In the above circumstances, this Court finds that the grounds raised in the Writ Petition challenging the steps taken by the respondents to realize the additional court fee payable to the 'legal benefit fund' so as to entertain the 'application' preferred by the petitioner under Sub Sections 3 and 5 of 45 A of the KGST Act are not correct or legally sustainable. Interference is declined and both the Writ Petitions are dismissed accordingly. 13. However, taking note of the nature of the relief sought for and also the fact that the proceedings already preferred by the petitioner before the 3rd respondent are pending, the 3rd respondent is directed to finalize the same in accordance with law, of course after hearing the petitioner, as expeditiously as possible, at any rate, within two months from the date of receipt of a copy of this judgment. The 'bank guarantee' can be enforced to the extent as it is necessary to have realized the additional court fee in respect of relevant proceedings. P. R. RAMACHANDRA MENON, JUDGE kmd