IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM FRIDAY, THE 24TH SEPTEMBER 2010 / 2ND ASWINA 1932 WP(C).No. 29304 of 2010(K) -------------------------- PETITIONER(S): --------------- WIPRO GE HEALTHCARE PVT.LTD., 41/400, AMMANKOVIL ROAD, KOCHI-35 REPRESENTED BY ITS AUTHORISED SIGNATORY N.V.JAYAN. BY ADV. SRI.A.KUMAR RESPONDENT(S): --------------- 1. THE DY. COMMISSIONER OF APPEALS, DEPARTMENT OF COMMERCIAL TAXES, ERNAKULAM-16. 2. THE INTELLIGENCE OFFICER (IB), DEPARTMENT OF COMMERCIAL TAXES, ERNAKULAM AT EDAPPALLY-24. GOVT. PLEADER SRI.C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24/09/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.29304 of 2010 ------------------------------------------- Dated this the 24th day of September, 2010 J U D G M E N T ---------------------- With respect to the assessment years 2005-06 to 2008-09 penalty was imposed against the petitioner under Section 67(1) of the Kerala Value Added Tax Act, 2003. The petitioner had preferred appeal against those orders before the 1st respondent. Along with the appeals, Interlocutory Applications seeking stay were also filed. Exts.P6 & P7 are the interim orders issued by the 1st respondent on those stay petitions. After considering contentions raised in the appeal and after hearing the petitioner, the 1st respondent granted interim stay subject to condition of the petitioner remitting 1/3rd of the total amount due and on furnishing security bond for the balance amount. 2. According to the petitioner, the amount stipulated in Exts.P6 & P7 was already paid. With respect to the direction to furnish security bond, it is complained that the 2nd respondent is insisting for furnishing Bank Guarantee. It W.P.(C).29304/10-K -2- is stated that the insistence for furnishing Bank Guarantee is causing serious prejudice to the petitioner. The petitioner has produced copy of the judgment in W.A.No.810/2010 (Ext.P9) passed by a Division Bench of this court. It is contended that on an identical situation this court had dispensed with execution of security bond on condition that the appellant in that case shall not part with the fixed assets, machinery or plant before clearing arrears of tax. The appellate authority in that case was directed to pass orders on the appeal within a time frame. The petitioner further points out yet another judgment of this court in WP(C). No.12534/2007 (Ext.P10) in which on an identical situation this court observed that, having regard to the reputation and standing as a properly run company, the petitioner therein shall be permitted to furnish security in the form of a simple bond without sureties. There also the appellate authority was directed to dispose of the appeal within a time frame. On the basis of the above contentions the petitioner is seeking indulgence of this court for a modification of the impugned orders for exonerating them from the liability to execute security bond. 3. The statutory appellate authority had issued the Interlocutory order, after considering merits of the contentions. W.P.(C).29304/10-K -3- It is after being satisfied that the petitioner had made out a prima facie case, the interim order is granted imposing a condition. With respect to the condition is stipulated, the appellate authority has taken a lenient view and only 1/3rd of the amount in dispute was directed to be paid. Insistence for furnishing Bank Guarantee for the balance amount will definitely work out onerous to the petitioner and the same will cause burden equivalent to payment of the entire amount. Therefore, I am of the opinion that no Bank Guarantee need be insisted based on the directions contained in Exts.P6 & P7. 4. With regard to furnishing of security bond, as insisted in Exts.P6 & P7, learned Government Pleader contended that the petitioner should be compelled to furnish the bond as provided under the KVAT Rules, along with sureties or on production of adequate security of immovable property. It is urged that there is no evidence to prove that the petitioner company owns any assets within the State of Kerala and therefore any insistence restraining alienation of assets of the company, cannot be taken as an alternative to dispense with furnishing of security bond. 4. However, considering the fact that what was challenged before the appellate authority are orders imposing W.P.(C).29304/10-K -4- penalty, I am of the opinion that the petitioner should be relieved from the burden of furnishing security bond with sureties, pending disposal of the appeal. If the petitioner had already remitted the amount as insisted under Exts.P6 & P7, the 1st respondent is directed to consider and dispose of the appeals at the earliest possible, at any rate within a period of six weeks from the date of receipt of a copy of this judgment. 5. Till such time appeals are disposed of, recovery of the balance amount shall be kept in abeyance, provided the petitioner furnishes simple Bond in Form No.6 under the KVAT Rules, for the balance 2/3rd amount, without sureties. C.K.ABDUL REHIM, JUDGE. okb