IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH THURSDAY, THE 10TH JULY 2008 / 19TH ASHADHA 1930 WP(C).No. 20845 of 2008(F) -------------------------- PETITIONER: ----------------- M/S.SOUTH MALABAR STEELS & ALLOYS (P) LTD., MANJALUNGAL, KALADIPATTA, PATTAMBI, PALAKKAD, REPRESENTED BY ITS MANAGER, V.ALAVI. BY ADV. SRI.G.SHRIKUMAR RESPONDENTS: --------------------- 1. THE INTELLIGENCE OFFICER, SQUAD NO.II COMMERCIAL TAXES, THALASSERY - 670 701. 2. THE INTELLIGENCE OFFICER, SQUAD NO.1, DEPARTMENT OF COMMERCIAL TAXES, ERNAKULAM SPECIAL TEAM. 3. THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES (APPEALS), ERNAKULAM. 4. THE INSPECTING ASSISTANT COMMISSIONER, DEPARTMENT OF COMMERCIAL TAXES, PALAKKAD. BY GOVT. PLEADER SRI. C.K. GOVINDAN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.M.JOSEPH, J. - - - - - - - - - - - - - - - - - - - - - - - - - WP.(C) No.20845 of 2008 - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 10th day of July, 2008 JUDGMENT Petitioner challenges Ext.P4 penalty order and Ext.P9 stay order. It also seeks a direction to restrain the second and fourth respondents from continuing with recovery proceedings pursuant to Ext.P4 penalty order. The further prayer is for a direction to consider and pass orders on Ext.P6 appeal. 2. I heard learned counsel for the petitioner and the learned Government Pleader. 3. Learned counsel for the petitioner submits that this is a case where the petitioner has been visited with penalty and he has filed an appeal along with stay petition. The appellate authority granted stay on condition of the petitioner remitting 40% of the penalty and furnishing security for the balance amount. He complains that calling upon the petitioner to remit 40% of the penalty amount, when the penalty imposed is nearly Rs.1,09,00,000/-, visits the petitioner with severe hardship. He would further point out that the main component of the penalty is alleged suppressed excess production, WPC.20845/2008. 2 which is calculated with reference to the figures cited by the KSIDC regarding the number of units required for production of one tonne of the product in question. He submits that imposition of penalty based on the said calculation is faulty and it is totally unsafe to visit the petitioner with an order of penalty. He has also relied on Ext.P10 judgment and he also submits that an order granting stay on imposing conditions cannot be passed in a mechanical manner and the authority must exercise discretion in the matter of imposing conditions. He would even submit that the unit will have to be closed down if the order is complied with. 4. Learned Government Pleader joins issue with the petitioner and pointed out that the order of penalty is fully justified. He points out that the order is not only based on suppressed excess production based on the electricity consumption, but also on the discrepancies in the accounts which were discovered by the officers. 5. Having considered all the aspects, I feel that the petitioner is entitled to partial relief in regard to the condition imposed in Ext.P9. Accordingly, it is ordered as follows: If the petitioner pays a sum of Rs.30 Lakhs and also furnishes security by producing bond along with solvency certificate for the balance WPC.20845/2008. 3 amount within two weeks from today, proceedings will be kept in abeyance till the disposal of the appeal. (K.M. JOSEPH, JUDGE) sb