IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 4TH APRIL 2011 / 14TH CHAITHRA 1933 WP(C).No. 10780 of 2011(V) --------------------------------------- PETITIONER(S): ---------------------- 1. V.U. SIDHIQUE, PROPRIETOR, M/S.V.S. EXPORTS AND IMPORTS, PUTHUPPADY P.O., MUVATTUPUZHA-686 673. 2. K.M. SAINABA, PROPRIETRIX, M/S.V.U.S.TIMBERS, PUTHUPPADY P.O., MUVATTUPUZHA. 3. M/S.V.S. TIMBERS PVT. LTD., PUTHUPPADY P.O., MUVATTUPUZHA, REP. BY ITS MANAGING DIRECTOR, SHRI.V.U. SIDHIQUE. BY ADV. SRI.T.M.SREEDHARAN, SMT.C.K.SHERIN, SRI.V.P.NARAYANAN. RESPONDENT(S): ------------------------- 1. THE ASSISTANT COMMISSIONER-II, SPECIAL CIRCLE, COMMERCIAL TAXES, PERUMBAVOOR-683 549. 2. THE COMMISSIONER, DEPARTMENT OF COMMERCIAL TAXES, THIRUVANANTHAPURAM. 3. THE STATE OF KERALA, REPRESENTED BY ITS CHIEF SECRETARY, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. R1 TO R3 BY GOVT. PLEADER MR.V.K. SHAMSUDHEEN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04/04/2011,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs C.K.ABDUL REHIM,J - - - - - - - - - - - - -- - - - - - - - - - - - - - - - W.P.(C)NO.10780 OF 2011 - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 4th day of APRIL, 2011 J U D G M E N T Petitioner is challenging Ext.P1 series notice issued under Section 25(1) of the Kerala Value Added Tax (KVAT ACT)and to quash the same through a writ of certiorari. I am afraid that it will be highly premature by this court to quash a notice proposing assessment made under Section 25(1) of the Act. Contention of the petitioner is that best judgment assessment was proposed mainly on the allegation had not finalised . The value disclosed by the petitioner on the sale of the timber to other dealers is not actually valued since it is lower than the value fixed in Ext.P2(C) circular. (Circular No.28/2008 dated 19-6-08) According to the petitioner the assessment could not made relying on the value fixed in Ext.p2(C) circular which in turn was issued by the Commissioner Commercial Taxes only for the limited purpose of collection of advance tax. The petitioner relies on Ext.p3 judgment issued by this court in writ petition filed by the W.P.(C)NO.10780 OF 2011. : 2 : petitioner and others with respect to the issue related to collection of advance tax. Petitioner refers to para 12 of Ext.P3 judgment where in it is categorically observed by this court. The assessment authority are not bound by the prize shown by the commissioner in such a circular while exercising jurisdiction for finalising the assessment. It is also observed in Ext.P3 with fixation of sale prize in the circular is only provisional and it is held only for the purpose of collecting advance tax. Therefore the release placed by the assessing authority while issuing the notice on the circular is totally unsustainable and it is squarely against the observations contained inExt.P3 judgment is the contention. It is also contended that the circular under reference was made use of in proposing assessment with respect to the period prior to applicability of the said circular. 2.However it is notices that Ext.P1 series the petitioner have submitted Ext.P4 series reply before the first respondent. It is left open to the petitioner to agitate all the contentions before the said authority. Learned government pleader appearing on behalf of the respondent points out that he is not W.P.(C)NO.10780 OF 2011. : 3 : solely relying on the prize fixed by the circular that the proposal was issued and assessment was proposed best on other materials collected by the appellant authority. Since the matter is now seizen of the first respondent and not expressing any view on the dispute expected. However it is clear in evident held in Ext.p3 judgment the prize fixed through the circular in question is made only by the purpose of collecting advance tax and the same could not be pursued as a mandatory prize fixing for the purpose of complying assessment. 3.Under the above mentioned circumstances I am of the view that it is for the first respondent to consider objections and appropriate decision. Needless to say that before finalising the assessment the petitioner shall be given an opportunity to substantiate their contentions , their production of documents and books of accounts and they shall be followed with an opportunity of personal hearing before finalising the decision. The writ petition is disposed of in the above circumstances (C.K.ABDUL REHIM,JUDGE) W.P.(C)NO.10780 OF 2011. : 4 : jkk