IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON TUESDAY, THE 2ND FEBRUARY 2010 / 13TH MAGHA 1931 WP(C).No. 560 of 2010(T) ------------------------ PETITIONER: --------------- ST.ANTONY'S MOTORS INDIA LIMITED, 111/178, THANNIKELPAD, K.K.ROAD, VADAVATHOOR P.O, KOTTAYAM - 686 010, REPRESENTED BY ITS MANAGING DIRECTOR SRI.MEHAR REYNOLD. BY ADV. SRI.S.ANANTHAKRISHNAN SRI.N.K.SUBRAMANIAN RESPONDENT: --------------- THE ASST.COMMISSIONER (KVAT), SPECIAL CIRCLE, COMMERCIAL TAXES, KOTTAYAM. BY GOVERNMENT PLEADER SRI.C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02/02/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R. RAMACHANDRA MENON, J. .............................................................................. W.P.(C) No. 560 OF 2010 ......................................................................... Dated this the 2nd February, 2010 J U D G M E N T The petitioner has approached this Court seeking for the following reliefs : “1. Issue a writ of certiorari or any other appropriate writ direction or order calling for the records leading to Ext.P4 and to quash the same. 2. Issue a writ of mandamus or any other appropriate writ direction or order directing the respondent to verify the connected records of the petitioner on the basis of which the audit report has been prepared and the annual return has been filed and to pass a fresh assessment order after giving an opportunity of hearing to the petitioner; and 3. Such other and further reliefs that this Hon'ble Court may deem fit in the circumstances of the case to meet the ends of justice.” 2. The learned Counsel for the petitioner submits that Ext.P4 order has been passed without giving any effective W.P.(C) No. 560 OF 2010 2 opportunity of hearing to the petitioner and also with a vindictive approach to capitalize the mistake stated as committed by the Chartered Accountant of the petitioner, who, immediately on realizing the mistake, submitted Ext.P3 letter dated 14.11.2009 along with the revised Audit Report seeking to finalise the assessment accordingly. However, it was without any regard to the said course of events that the respondents chose to proceed with Ext. P1 notice issued under Section 25(1) of the KVAT Act and passed Ext. P4 order dated 19.11.2009 imposing a penalty of Rs, 1,40,62,106/-, which is stated as not correct or sustainable under any circumstances; more so, when the petitioner has already effected the tax in respect of the 'amount of difference', shown in the proceedings. 3. The learned Government Pleader, with reference to the counter affidavit filed , rebuts the version of the petitioner that it was an inadvertent mistake at the hands of the Chartered Accountant in showing the figures as to the ‘closing stock’ and ‘opening stock’ in the relevant pages of the audit report, whereby the turnover of Rs. 5,35,69,928/- was treated by the respondent as ‘escaped turnover’ proposing to impose penalty as W.P.(C) No. 560 OF 2010 3 shown in Ext. P1, in turn leading to Ext.P4. Immediately on coming across the said mistake , which was stated as a ‘typographical error’, the concerned Chartered Accountant himself submitted Ext. P3 letter with 'Revised Audit Report', wherein the mistake is stated as corrected. But referring to the actual facts and figures, it is contended in the counter affidavit that even the figures shown in Ext. R1 Pre-revised Audit Report and Ext.R2 Revised Audit Report do not reconcile with each other (for the reasons stated in paragraph No. 4 of the counter affidavit) referring to the arithmetical mistake still subsisting. It is pointed out that there is an obvious error in respect of the corresponding entries shown against Col.No.’U’, showing the total value of [ ‘P’+ ‘s’ + ‘T’ ] as Rs.335433815/- in Ext.R1, which still remains to be the very same figure in Ext. R2 as well, i.e., even after the correction stated as carried out, thus contending that the mistake cannot be taken as a 'typographical error'. 4. The learned Counsel for the petitioner submits that there is no pith or substance in the said contention, in so for as the final figure has been correctly given in Col.’Y’ of Ext. R2, showing W.P.(C) No. 560 OF 2010 4 the 'closing stock value' as Rs.82331618.52/-. 5. The learned Government Pleader, however places reliance on Rule 22 (4A) of the KVAT Rules and the 'proviso' thereunder as to the course to be followed when the dealer detects any omission or mistake in the return submitted by him under sub-rule (1). 6. The question involved herein is whether the above stipulation is applicable as such to the case in hand. This Court finds that there is no point in penalizing the petitioner/dealer for the mistake committed by the Chartered Accountant. More so, when the mistake has been rectified by the Chartered Accountant himself, submitting Ext. R 2 Revised Audit Report and further when the explanation offered by the petitioner is plausible. Above all, the contention put forth from the part of the respondent that there is no provision in the statute to consider the 'Revised Audit Report' also does not hold any water; in so far as it was submitted from the part of the Government/Department, on an earlier occasion before this Court, while rendering the judgment in W.P(C) No. 1092 of 2010 that the the Government had absolutely no objection in W.P.(C) No. 560 OF 2010 5 considering and finalising the proceedings, after considering the 'Revised Audit Report' (produced and marked as Exts. P1 and P3 therein), based on which the Writ Petition was disposed of, giving appropriate directions. 7. In the above circumstances, the respondent is directed to consider the contents of the Revised Audit Report produced and marked as Ext.R2 before this Court, along with all other relevant records and to finalise the matter in accordance with law, after giving an opportunity of hearing to the petitioner, which exercise shall be finalised, as expeditiously as possible at any rate within two months from the date of receipt of a copy of the judgment. In view of the interception made as above, Ext. P4 will stand set aside . The Writ Petition is disposed of accordingly. P.R. RAMACHANDRA MENON, JUDGE. lk