IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON MONDAY, THE 4TH JANUARY 2010 / 14TH POUSHA 1931 WP(C).No. 37253 of 2009(B) -------------------------- PETITIONER: --------------- M/S. ARASAN MATCH INDUSTRIES, SALES DEPOT REG. NO. 23030252425 THIRUVALLA, REPRESENTED BY ITS CHIEF OFFICER (OPERATOR), G. SABAPATHI. BY ADV. SRI.S.SOMAN RESPONDENTS: --------------- 1. INSPECTING ASSISTANT COMMISSIONER(IB), COMMERCIAL TAXES, THIRUVANANTHAPURAM. 2. DEPUTY COMMISSIONER (APPEALS) II, COMMERCIAL TAXES, KOLLAM. 3. THE VALUE ADDED TAX APPELLATE TRIBUNAL, ERNAKULAM. 4. STATE OF KERALA, REPRESENTED BY ITS SECRETARY TO TAXES, TRIVANDRUM. BY GOVERNMENT PLEADER ADV. MR. C.K. GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04/01/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R. RAMACHANDRA MENON, J. ............................................................................. W.P(C) No.37253 OF 2009 ......................................................................... Dated this the 4th January , 2010 J U D G M E N T The challenge involved in the Writ Petition is against the order passed by the appellate authority viz., the Tribunal, directing the petitioner to satisfy 40% of the penalty imposed under section 67 of the KVAT Act as a pre-condition to have the coercive steps intercepted during the pendency of the statutory appeal. 2. The case of the petitioner, as put forth by the learned counsel for the petitioner, is that the petitioner is engaged in the manufacture of “handmade safety matches” in various industrial units situated in Sivakasi and that they are very much entitled to get exemption from payment of any tax in respect of the 'handmade safety matches' as per the relevant statutory prescriptions. It is also stated that exemption has been granted by the counter parts in Tamilnadu, based on the similar set of provisions as exist there. The learned Counsel further submits that Exts. P3 and P4 orders have been passed mainly on the basis of Ext.P2 enquiry report which is stated as prepared and W.P(C) No.37253 OF 2009 2 submitted behind the back of the petitioner, which however is disputed by the learned Government Pleader appearing for the respondents, who asserts that the 'modus operandi' of the petitioner is crystal-clear from the aspects pointed out in Ext. P2, and that it is supported by oral, documentary and electronic media of evidence including videographs. 3. The learned Counsel for the petitioner however, placing reliance on the decision rendered by this Court in M/s.West Coast Industrial Gases (1996 KLJ (Tax Case) 152) submits that, in the case of imposition of 'penalty', the matter stands entirely on a different footing and it is not proper for the authorities or the courts concerned to impose a condition to satisfy a portion of the same, while intercepting the coercive proceedings. 4. After considering the facts and figures, in the light of the law declared by this Court in the decision cited supra and also considering the fact that the appeals preferred by the petitioner for both the assessment years, viz., 2006-07 and 2007-08 stand posted on 04.02.2010, this Court finds it fit and proper to have the above matters finalised by the third respondent- W.P(C) No.37253 OF 2009 3 Appellate Tribunal at the earliest. 5. In the above facts and circumstances, the third respondent is directed to consider and pass appropriate orders on Ext. P6 common appeal in respect of both the years concerned, in accordance with law, of course, after giving an opportunity of hearing to the petitioner, as expeditiously as possible, at any rate, within three weeks from the date of receipt of a copy of the judgment . It is made clear that till finalisation of the proceedings in the appeal as above, all further proceedings pursuant to Exts. P3 and P4 seeking for realisation of a portion of the liability by way of penalty, stated as due from the petitioner, shall be kept in abeyance . The Writ Petition is disposed of as above. P.R. RAMACHANDRA MENON, JUDGE. lk