IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 29TH MARCH 2011 / 8TH CHAITHRA 1933 WP(C).No. 1979 of 2011(V) ------------------------- PETITIONER(S): --------------- BIJU RAVEENDRAN INTERFACE DESIGNERS, ST.MARY'S SCHOOL ROAD, ADOOR, PATHANAMTHITTA DISTRICT. BY ADV. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON SRI.MAHESH V.MENON RESPONDENT(S): --------------- 1. COMMERCIAL TAX OFFICER (WORKS CONTRACT -111), DEPARTMENT OF COMMERCIAL TAXES, PATHANAMTHITTA-689 645. 2. STATE OF KERALA, REPRESPENTED BY ITS SECRETARY, TAXES DEPARTMENT, GOVT.SECRETARIAT THIRUVANANTHAPURAM. BY ADV.SRI.V.K.SHAMSUDHEEN, GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29/03/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ami/ C.K.ABDUL REHIM, J. ------------------------------- W.P.(C).No.1979 of 2011 ------------------------------- Dated this the 29th day of March, 2011. J U D G M E N T Challenge in this writ petition is against rejection of application for registration, submitted by the petitioner under the provisions of the Kerala Value Added Tax Act (KVAT Act), 2003. The petitioner is a works contractor. The petitioner submitted the application for registration on 9.7.2010. The registration sought for, was with respect to the business activities carried on by petitioner and the registration was applied with retrospective effect from 1.4.2007 onwards. The rejection was on the ground that, retrospectivity could not be granted under Section 16(2), because there exists an attachment for realisation of the penalty already imposed against the petitioner, to the tune of Rs.4,97,000/-. 2. Contention of the petitioner is that, he is remitting the amount of penalty already imposed, in a phased manner, in accordance with instalment facility granted by the State 2 W.P.(C).No.1979 of 2011 Government and hence the balance amount remaining could not be considered as arrears and further it is not a ground available for rejecting the application for registration. It is conceded in Ext.P10 order itself that, the petitioner is paying the penalty amount in instalments, in accordance with the order of the Government and that he had already remitted one of such instalments. 3. On a consideration of the reason assigned for rejection of the application, I am of the view that, the stand taken by the authority is highly misconceived. Question as to whether retrospective registration can be granted, is a matter which need be decided by the assessing authority concerned. Merely because there exists an order through which penalty was imposed, assessee could not be denied of registration with retrospective effect. Even if the registration is granted with retrospectivity, it will not automatically nullify the order of penalty which stands finalised. However, in the case at hand, the petitioner had conceded that he is making payment of the amount of 3 W.P.(C).No.1979 of 2011 penalty in instalments in accordance with the order issued by the Government. 4. Under the above circumstances, I am of the view that, the reason mentioned in Ext.P10 for rejection of the application for registration is unsustainable. Accordingly, the writ petition is allowed and Ext.P10 order is hereby quashed. The 1st respondent is directed to reconsider the application for registration and to pass fresh orders, after affording an opportunity of hearing to the petitioner, taking note of the observations contained herein above. 5. A decision in this regard shall be taken as early as possible, at any rate within a period of 1 month from the date of receipt of a copy of this judgment. C.K.ABDUL REHIM, Judge ami/