IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 21ST FEBRUARY 2011 / 2ND PHALGUNA 1932 WP(C).No. 4995 of 2011(Y) ------------------------------------- PETITIONER: ------------------- M/S. KIRMUSI CASHEW EXIM (P) LTD., 2ND FLOOR, UNION BUILDING, ASHRAMAM.P.O., KOLLAM-691 002, REPRESENTED BY G.KANNAN, MANAGER. BY DR.K.B.MUHAMED KUTTY, SENIOR ADVOCATE, ADV. SRI.K.M.FIROZ. RESPONDENTS: ------------------------ 1. ASSISTANT COMMISSIONER, COMMERCIAL TAXES, SPECIAL CIRCLE, KOLLAM. 2. THE DEPUTY COMMISSIONER (APPEALS), COMMERCIAL TAXES, KOLLAM. R1 & R2 BY SR. GOVERNMENT PLEADER SRI. C.K. GOVINDAN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21/02/2011,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: prv. C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.4995 of 2011 ------------------------------------------- Dated this the 21st day of February, 2011 J U D G M E N T ---------------------- Ext.P5 interim order passed by the 2nd respondent is challenged in this writ petition. Assessment was completed against the petitioner under Section 25(1) of the Kerala Value Added Tax Act, 2003 (KVAT Act) as per Ext.P3, rejecting the returns filed, mainly based on the ground that suppression of turnover was detected during the course of an inspection conducted and penalty was imposed on the petitioner on that basis. Ext.P4 appeal was filed against the order of assessment before the 2nd respondent. Through the impugned order an interim stay was granted in the appeal, subject to condition of the petitioner remitting 50% of the balance amount and also furnishing security for the balance 50%. 2. It is pointed out by the petitioner that the order imposing penalty, which is the basis for completing the assessment, is pending in second appeal before the State Appellate Tribunal. It is mentioned that, during the pendency of the first appeal the petitioner had remitted 50% of the amount of penalty and further amounts were remitted during pendency of the second appeal as stipulated by the Tribunal. Under such W.P.(C).4995/11 -2- circumstances the imposition for payment of 50% of the tax assessed is highly unreasonable and arbitrary. 3. Referring to contents of Ext.P5, learned counsel for petitioner submitted that it is a totally non speaking order issued in a cryptic manner, without application of mind. It is stated that even though some of the grounds were illustrated in the interim order, the appellate authority had failed to consider merits of such grounds and also failed to arrive at any prima facie opinion regarding its sustainability. Hence Ext.P5 impugned order is challenged as unsustainable in law. 4. On a perusal of Ext.P5 it is noticed that no consideration of the merits of the contentions is reflected. Eventhough the appellate authority had illustrated some of the contentions raised, nothing is discussed or mentioned about merits of such contentions. On the other hand, the appellate authority had imposed condition for payment of 50% without there being any reasoning mentioned. It is trite law by this time that the appellate authorities are exercising quasi judicial functions and they are supposed to mention reasons for granting interim reliefs and also with respect to imposing conditions. On a perusal of Ext.P5, I have no hesitation to hold that the said order does not comply with the requirements as mentioned above, and hence it is not sustainable in the eye of law. W.P.(C).4995/11 -3- 5. On merits of the matter I notice that the assessment is based mainly with respect to the turnover which is alleged to have been suppressed, unearthed through the inspection conducted for which penalty was imposed. It is evident that the sustainability of order imposing penalty is now pending adjudication before the appellate Tribunal. Further it is noticed that the petitioner had already remitted a major portion of the amount of penalty. 6. Under the above mentioned circumstances, eventhough the matter need be remanded to the appellate authority for passing fresh orders, I am of the view that interest of justice will be served if a direction is issued to the appellate authority to consider and dispose of the appeal itself and till then to keep in abeyance realisation of the amounts covered under Ext.P3 order of assessment, subject to condition of the petitioner furnishing security. 7. Therefore the writ petition is disposed of quashing Ext.P5. The 2nd respondent is directed to consider and dispose of Ext.P4 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. 8. Till such time the appeal is disposed of as directed above, recovery of amounts covered under Ext.P3 shall be kept in W.P.(C).4995/11 -4- abeyance provided the petitioner furnishing Security Bond for the entire balance outstanding, within two weeks from the date of receipt of a copy of this judgment. C.K.ABDUL REHIM, JUDGE. okb