IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 24TH MAY 2011 / 3RD JYAISHTA 1933 WP(C).No. 13851 of 2011(F) -------------------------------------- PETITIONER: ------------------- T.A.SIMON, KERALA HARDWARE, OOTTUPARA, WADAKKANCHERRY. BY ADVS. SRI.HARISANKAR V. MENON, SMT.MEERA V.MENON, SRI.MAHESH V.MENON. RESPONDENTS: ------------------------ 1. INTELLIGENCE OFFICER (IB), DEPARTMENT OF COMMERCIAL TAXES, THRISSUR – 680 001. 2. KERALA VALUE ADDED TAX APPELLATE TRIBUNAL, SALES TAX COMPLEX, M.G.ROAD, ERNAKULAM, REPRESENTED BY ITS SECRETARY – 682 013. R1 & R2 BY GOVT. PLEADER SRI. V.K. SHAMSUDHEEN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24/05/2011,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: prv. C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.13851 of 2011 ------------------------------------------- Dated this the 24th day of May, 2011 J U D G M E N T ---------------------- Ext.P4 interim order passed by the 2nd respondent tribunal is challenged in this writ petition. The petitioner had filed appeal against Ext.P1 order, through which penalty to the tune of Rs.22,00,764/- was imposed against him under Section 67 of the Kerala Value Added Tax Act, 2003 (KVAT Act). The first appellate authority had granted modification by directing the 1st respondent to recompute the amount of tax sought to be evaded and to impose penalty to the extent of two times of the tax so re-calculated. For the purpose of re-computation, the first appellate authority directed computation of tax at 4% and 12.5% respectively on 50% of the total turnover. Aggrieved by Ext.P2 order of the first appellate authority the petitioner had preferred second appeal before the 2nd respondent tribunal. Ext.P4, order was issued on a stay petition filed along with the appeal. The tribunal found that the liability of the petitioner on the basis of Ext.P2 order will be Rs.14,70,072/-. Interim stay was granted subject to condition of the petitioner making W.P.(C).13851/11 -2- payment of 1/3rd of the amount in dispute. 2. Contention of the petitioner is that the impugned order was issued in a cryptic manner without proper application of mind. It is contended that imposition of tax at 12.5% on 50% of the turnover was ordered without any basis in an arbitrary manner. 3. On a perusal of Ext.P4 it is evident that, eventhough the tribunal had not narrated the entire contentions in detail, the conditional order was issued after applying mind, after hearing the petitioner as well as the state representative. But it is settled position that, while passing interim orders, the appellate authorities are at an obligation to state reasons. Appreciation of merits of the contentions on a prima facie basis should be reflected in the order. The appellate authorities are also expected to mention reasons for imposing conditions. The above requisites are absent in the order impugned. 4. However, I am not proposing to remand the matter for passing fresh orders by the tribunal, because of the fact that the appeal is pending disposal before the tribunal and that any such remand will only help to multiply the proceedings. I am of the view that interest of justice will be served if a direction is issued to the tribunal to dispose of the appeal on an early basis and till W.P.(C).13851/11 -3- then to stay the recovery, imposing less rigorous condition. 5. Accordingly the writ petition is disposed of directing the 2nd respondent tribunal to consider and dispose of Ext.P3 appeal after affording an opportunity of hearing to the petitioner, as early as possible, at any rate, within a period of 3 months from the date of receipt of a copy of this judgment. 6. Till such time the appeal is disposed of as directed above, in modification of Ext.P4 order, the respondents are restrained from realising the amount of penalty, due subject to condition of the petitioner remitting 20% of the sum of Rs.14,70,072/- and on furnishing security for the balance amount, within two weeks from the date of receipt of a copy of this judgment. C.K.ABDUL REHIM, JUDGE. okb