IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE K.M.JOSEPH MONDAY, THE 18TH FEBRUARY 2008 / 29TH MAGHA 1929 WA.No. 413 of 2008 -------------------------- AGAINST THE JUDGEMENT IN WPC.3335/2008 DATED 29/01/2008 .................... APPELLANT/PETITIONER: ------------------------------------ M/S. HINDUSTAN LEVER LIMITED, WILLINGDON ISLAND, KOCHI-3, REPRESENTED BY ITS LEGAL EXECUTIVE, MR. JIKKU GEORGE. BY ADV. SRI.E.K.NANDAKUMAR SRI.A.K.JAYASANKAR NAMBIAR SRI.K.JOHN MATHAI SRI.P.BENNY THOMAS SRI.ANIL D. NAIR RESPONDENTS/RESPONDENTS: ----------------------------------------------- 1. ASSISTANT COMMISSIONER (ASSMT.) IV, COMMERCIAL TAXES, SPECIAL CIRCLE, MATTANCHERRY-682 002. 2. DEPUTY COMMISSIONER OF COMMERCIAL TAXES (APPEALS), ERNAKULAM, KOCHI-682 015. 3. THE STATE OF KERALA, REPRESENTED BY THE SECRETARY (TAXES), GOVERNMENT OF KERALA, SECRETARIAT, THIRUVANANTHAPURAM-695 001. BY SR.GOVERNMENT PLEADER MR.MOHAMMED RAFIQ THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 18/02/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: H.L.DATTU, C.J. & K.M.JOSEPH, J. ------------------------------------------ W.A.No.413 of 2008 ------------------------------------------ Dated, this the 18th day of February, 2008 JUDGMENT H.L.Dattu, C.J. This is the third round of litigation. On an earlier occasion, the petitioner was before this Court in W.P.(C) No17981 of 2007, inter alia, questioning the orders passed by the first appellate authority (Ext.P9) for the assessment year 2002-03 both under the provisions of the Kerala General Sales Tax Act, 1963 ('KGST Act' for short) and the Central Sales Tax Act, 1956 ('CST Act' for short). This Court by its order dated 21st June, 2007 was pleased to allow the writ petition and was pleased to issue certain directions. The directions so issued are as under: “3. The impugned order happened to be passed because the petitioner failed to produce the materials regarding the amalgamation and appraise the appellate authority that the amount due to M/s.Brookbond Lipton India Ltd. is now due to the petitioner company. But, having regard to the facts of the case, the petitioner is given a chance to place the above facts before the appellate authority. Accordingly, Ext.P9 is quashed. The stay applications, which were disposed of by Ext.P9 shall be reconsidered by the 2nd respondent appellate authority within three weeks from the date of receipt of a copy of this judgment. The petitioner will be free to place all the materials in support of its contention regarding refund, before the appellate authority. If a copy of this judgment is produced before the appellate authority within one week from today, further recovery pursuant to the impugned KGST and CST assessments for the year 2002-03 will remain in abeyance for a period of one month from today.” W.A.No.413 of 2008 2 2. A perusal of the aforesaid paragraph would clearly indicate that firstly the first appellate authority has to consider the claim of the appellant in regard to the amalgamation of the appellant company with some other company/companies and also to consider the claim of the appellant for refund, while considering the applications for grant of interim order of stay, staying the demands raised for the assessment year 2002-03. 3. After such remand, the first appellate authority has passed yet another order dated 1.1.2008 and in that has directed the appellant to deposit a sum of Rs.20 lakhs. Aggrieved by the said direction issued by the first appellate authority, the appellant company was before this Court in W.P.(C) No.3335 of 2008. The learned Single Judge by his order dated 29th January, 2008 has rejected the writ petition. That is how the petitioner is before us in this writ appeal. 4. Sri.Anil D.Nair, learned counsel appearing for the appellant, would contend that the first appellate authority ignoring the orders passed by a learned Single Judge of this Court in the earlier writ petition, namely W.P.(C) No.17981 of 2007 dated 21st June, 2007, has passed the impugned order. Therefore, it is said that the order passed by the first appellate authority is not only perverse but also contrary to the directions issued by this Court. 5. Sri.Mohammed Rafiq, learned senior Government Pleader appearing for the Revenue, sought to justify the impugned order passed by the first appellate authority. 6. In the instant case, as we have already noticed, that there were specific directions issued by this Court, and the directions were that, the appellant shall produce all such materials which are available with it with regard W.A.No.413 of 2008 3 to the amalgamation of the company, and secondly, the first appellate authority will consider the claim of the appellant for refund of the amounts due to it by the Revenue. The appellate authority has noticed both these contentions and in so far as the first contention is concerned, the appellate authority accepts the amalgamation of the companies, but when it comes to the refund of the amounts due to the assessee for the assessment year in question, it does not say anything. As we have already noticed, there was a specific direction issued by this Court directing the first appellate authority to consider the claim of the appellant for refund of the amounts due to it by the Revenue while considering the application for grant of an interim order of stay staying the sales tax demand raised for the assessment year 2002-03 both under the KGST Act and the CST Act. The appellate authority, in our opinion, practically, may be voluntarily, has ignored the directions issued by this Court and then has proceeded to pass yet another order directing the appellant to deposit a sum of Rs.20 lakhs. In our view, the order passed by the first appellate authority is contrary to the observations and directions issued by this Court. Therefore, we cannot sustain that order. In fact, it is a case where this Court should have taken serious view of the matter and should have even hauled up the first appellate authority for committing an act of disobedience of the orders and directions issued by this Court and since Mr.Mohammed Rafiq, learned Government Pleader, did not pursue the orders passed by the first appellate authority to its logical end, we have thought it fit not to initiate any proceedings against the first appellate authority. However, in view of what we have observed in the course of our order, the order passed by the first appellate authority cannot be sustained by us, since it is passed contrary to the W.A.No.413 of 2008 4 observations and directions issued by this Court in the earlier round of litigation. 7. In that view of the matter, we pass the following: ORDER i) The orders passed by the learned Single Judge is set aside. ii) The order passed by the first appellate authority is also set aside. iii) The matter is remanded back to the first appellate authority to redo the matter in accordance with law and in accordance with the observations made by this Court in W.P.(C) No.17981 of 2007 dated 21.6.2007 as expeditiously as possible, at any rate, within a period of four weeks from the date of receipt of a copy of this Court's order. iv) The respondents/assessing authority is directed not to pursue the recovery proceedings initiated against the appellant till the application filed by the appellant is decided by the appellate authority. Ordered accordingly. (H.L.DATTU) CHIEF JUSTICE (K.M.JOSEPH) JUDGE vns/DK