IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 27TH OCTOBER 2009 / 5TH KARTHIKA 1931 WP(C).No. 30335 of 2009(J) -------------------------- PETITIONER(S): --------------- T.M.BABY, PROPRIETOR, M/S.CREATIVE MARKETING SERVICES, THEKKANETH BUILDING, NEAR SOUTH OVER BRIDGE, KOCHI-36. BY ADV. SRI.V.P.SUKUMAR SRI.JAIRAM.V.MENON RESPONDENT(S): --------------- 1. THE INTELLIGENCE OFFICER, SQUAD NO.II, COMMERCIAL TAXES, ERNAKULAM. 2. THE DEPUTY COMMISSIONER (APPEALS), COMMERCIAL TAXES, ERNAKULAM. 3. THE INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, ERNAKULAM, KOCHI-30. GOVERNMENT PLEADER SRI.C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 27/10/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K.ABDUL REHIM, J. ------------------------------ W.P.(C).No.30335 OF 2009 ------------------------------ Dated this the 27th day of October, 2009 J U D G M E N T ---------------------- 1. Petitioner was imposed with penalty under Section 44 (8) and 44(10) of the Kerala Value Added Tax Act, 2003 (KVAT Act), as per Ext.P1 order, on the basis of the allegation that during inspection it is revealed that the petitioner had stocked goods in an undeclared godown, and that such goods shall be treated as stock kept outside the regular Books of Accounts of the dealer as per Section 44(10) of the KVAT Act. Against Ext.P1 order the petitioner had filed Ext.P2 appeal before the 2nd respondent. Along with the appeal, the petitioner had also filed stay petition, as evidenced by Ext.P3, seeking stay of collection of the amount in dispute, till disposal of the appeal. 2. Contention of the petitioner is that the imposition of penalty is based on an allegation which is of technical in nature. Infact the entire goods detected from the premise in question are accounted stock of the petitioner and the stock was happened to be kept in the premises only because it was intended to be shifted to a new shop which is being opened. It is further stated that no sales was effected from the stock kept in that place and there was no intention to keep any unaccounted W.P.(C)30335/09-J 2 stock or to have any suppression with respect to the turnover. It is also contended that the stock in question was properly accounted. 3. The petitioner had relied on the decision of a Division Bench of this court in W.A.No:1347/2009 dt.10.7.2009, wherein it is held that inspite of the deeming provisions contained in Section 44(10), the authority concerned shall examine as to whether the petitioner had properly accounted the stock and whether there was any convincing reason for storing the goods in an undeclared premises, while fixing the quantum of penalty. 4. Heard learned Government Pleader appearing for the respondents. It is pointed out that inspite of opportunity given to the petitioner for production of Books of Accounts, the petitioner failed to prove that the stock in question was properly accounted. 5. Having considered rival contentions and facts and circumstances of the case, I am of the opinion that since the matter is now pending consideration before the appellate authority, it is for the said authority to take note of all such contentions raised by the petitioner. Having regard to the fact that the amount in dispute is penalty imposed under Section 44 (10), I am of the opinion that the appellate authority can be W.P.(C)30335/09-J 3 directed to dispose of the appeal at the earliest and till then steps for recovery can be kept in abeyance. 6. In the result, the writ petition is disposed of directing the 2nd respondent to consider and pass orders on Ext.P2 appeal, after affording an opportunity of hearing to the petitioner, as early as possible, at any rate within a period of two months from the date of receipt of a copy of this judgment. The respondents are directed to keep in abeyance further steps for realisation of the amount covered under Ext.P1 which is initiated pursuant to Ext.P4 notice, till orders are passed on Ext.P2 appeal. C.K.ABDUL REHIM, JUDGE. okb