IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM FRIDAY, THE 17TH DECEMBER 2010 / 26TH AGRAHAYANA 1932 WP(C).No. 36223 of 2010() ------------------------- PETITIONER(S): --------------- MS.MAJEED ASSOCIATES, GOPAL STREET, KANNUR REP. BY MANAGING PARTNER K.RIYAD. BY ADV. SRI.P.RAGHUNATH SRI.PREMJIT NAGENDRAN RESPONDENT(S): --------------- 1. COMMERCIAL TAX OFFICER, FIRST CIRCLE, KANNUR-670 004. 2. MANAGER, AXIS BANK, KANNUR - 670 001. 3. KERALA VAT APPELLATE TRIBUNAL, ERNAKULAM-682 015. BY GOVT. PLEADER SRI.C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 17/12/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K.ABDUL REHIM, J --------------------------------------- W.P(C) No.36223 of 2010-C ---------------------------------------- Dated this the 17th day of December, 2010. J U D G M E N T Aggrieved by Ext.P1 order imposing penalty under Section 67(1) of the Kerala Value Added Tax Act (KVAT Act), the petitioner had preferred second appeal before the 3rd respondent Tribunal, as evidenced from Ext.P3. Ext.P4 is the stay petition filed along with the appeal. Grievance of the petitioner is that without considering pendency of the appeal, coercive steps of recovery has now been initiated as per Ext.P5 notice. 2. It is stated that the issue pertains to rate of tax applicable to the products 'Ujala Supreme' and 'Ujala Stiff and Shine' dealt with by the petitioner. The question regarding the rate of tax applicable to the product, is pending final decision before this Court as well as before the Hon'ble Supreme Court in different matters. It is further pointed out that this Court had granted stay in many identical cases, wherever appeals are pending against the W.P(C) No.36223 of 2010-C 2 assessments, subject to condition of payment of 1/3rd of the amount in dispute. Since the impugned order is one imposing penalty, which is issued on the basis of an interpretation regarding the rate of tax applicable issued when the matter has not been finally settled. Hence it is totally unsustainable, is the contention raised. Learned counsel for the petitioner relies on a decision of the Hon'ble Supreme Court in E.I.D Parry (I) Ltd. V. Assist. Commissioner of Commercial Taxes and another [(2000) 117 STC 457], in support of the above contention. 3. Having considered the fact that in identical matters this Court had already issued directions to the appellate authority to consider the appeal itself, I am of the view that the matter can be disposed of directing the appellate authority to consider and pass appropriate orders on the appeal and till then to stay the recovery of the amounts covered under Ext.P1. 4. Accordingly, the writ petition is disposed of directing the 3rd respondent Tribunal to consider and pass W.P(C) No.36223 of 2010-C 3 orders on Ext.P3 appeal, after affording an opportunity of hearing to the petitioner, as early as possible, at any rate within a period of three months from the date of receipt of a copy of this judgment. 5. Till such time orders are passed by the Tribunal as directed above, recovery of the amount of penalty covered under Ext.P1 shall be kept in abeyance. Sd/- C.K.ABDUL REHIM JUDGE //True Copy// P.A to Judge ab W.P(C) No.36223 of 2010-C 4