IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH FRIDAY, THE 11TH JULY 2008 / 20TH ASHADHA 1930 WP(C).No. 20506 of 2008(N) -------------------------- PETITIONER: ------------ M/S. THRISSUR BUILDERS (P) LTD., MACHINGAL LANE, NORTH END, THRISSUR-01, REP. BY ITS MANAGING DIRECTOR, SRI.K.A. PADMAKUMAR. BY ADV. SRI.E.K.NANDAKUMAR SRI.A.K.JAYASANKAR NAMBIAR SRI.K.JOHN MATHAI SRI.P.BENNY THOMAS SRI.ANIL D. NAIR RESPONDENTS: ------------- 1. COMMERCIAL TAX OFFICER (A), OFFICE OF THE ASSISTANT COMMISSIONER (AA), DEPARTMENT OF COMMERCIAL TAXES, THRISSUR-04. 2. DEPUTY COMMISSIOINER OF COMMERCIAL TAXES (APPEALS), ERNAKULAM, KOCHI-682 015. 3. THE STATE OF KERALA, REP. BY THE SECRETARY (TAXES), GOVERNMENT OF KERALA, SECRETARIAT, TRIVANDRUM-695 001. BY GOVERNMENT PLEADER ADV.SRI.C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.M. JOSEPH, J. ```````````````````````````````````````````````````` W.P.(C) No. 20506 OF 2008 N ```````````````````````````````````````````````````` Dated this the 11th day of July, 2008 J U D G M E N T Petitioner has approached this Court to quash Ext.P12 to the extent it directs the petitioner to effect a payment of 50% within three weeks for grant of stay against recovery of the balance tax due under Exts.P1 to P3. VAT assessments for the assessment years 2005-06 to 2007-08 were completed by the assessing authority. Petitioner preferred appeals along with stay petitions. Stay petitions were heard by the 2nd respondent and passed Ext.P10 order. By Ext.P11, the petitioner sought for a clarification with regard to Ext.P10. The 2nd respondent passed Ext.P12 order without hearing the petitioner. 2. I heard learned counsel for the petitioner and learned Government Pleader. Learned counsel for the petitioner would submit that Ext.P12 order is to be quashed and to be reconsidered for the reason that the petitioner was not heard before passing the order. By Ext.P10, the petitioner is granted stay on condition that the petitioner pays 50% of the penalty due for each years and WPC.20506/08 : 2 : furnish sufficient security of the balance amount. The penalty imposed amounts to Rs.15,000/-. The tax liability is nearly Rs.72 lakhs. The learned counsel for the petitioner submits that Ext.P12 was passed without hearing the petitioner and it is mandatory under section 66 of the Act. 3. Learned Government Pleader points out that on the facts of this case petitioner may not be justified in impugning Ext.12. He points out that the petitioner filed Ext.P11. Section 66 (3) reads as follows: “ Where any such rectification has the effect of enhancing an assessment or penalty, the assessing authority shall give the dealer or other person, a revised notice of assessment or penalty and thereupon the provisions of this Act and the rules made thereunder shall apply as if such notice has been given in the first instance.” 4. After considering Exts.P10, 11 and P12, I am of the view that it cannot be said that the petitioner can complain that Ext.P12 is bad for not hearing the petitioner. There is no dispute that the petitioner was heard in regard to the stay petitions. The petitioner was heard in regard to grant of stay in relation to both tax and penalty. When Ext.P10 order was passed, the order was WPC.20506/08 : 3 : limited to penalty. This is a case where by Ext.P12 the petitioner is called upon to pay 50% of the disputed amount though by Ext.P10 order the petitioner was called upon to pay 50% of the penalty only. The petitioner was heard in relation to the stay petitions both in so far as pertained to tax and penalty on 7.5.2008. If that be so, I feel that the petitioner cannot invoke section 66(3) of the Act. This is a case where the petitioner was heard but Ext.P10 order was passed only in relation to penalty. It is the mistake which is noticed and Ext.P12 order was issued. In such circumstances, I repel the contention of the petitioner that the petitioner should be heard again before Ext.P12 order was issued. 5. The learned counsel for the petitioner submits that in the facts of this case, the imposition of condition of payment of 50% of tax is unjustified. This is a case where the assessing authority has found the petitioner, having been permitted to pay tax under section 8, could not collect tax. According to the petitioner, the petitioner has only shown tax as part of the cost and that is permissible by virtue of the provisions of section 43B of the Income Tax Act. That is the matter to be considered by the appellate authority and I need not express any opinion. I think that WPC.20506/08 : 4 : the petitioner has not made out a case for interfering with the condition of payment of 50% of tax. However, learned counsel for the petitioner submits that the petitioner may be granted one month's time to comply with the conditions in Ext.P12. I feel that is a reasonable request. Accordingly, while rejecting the challenge to Ext.P12, the petitioner is granted one month's time from today to comply with the conditions in Ext.P12. I leave open all the contentions of the petitioner. Writ petition is disposed of as above. (K.M.JOSEPH, JUDGE) aks