IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON MONDAY, THE 22ND MARCH 2010 / 1ST CHAITHRA 1932 WP(C).No. 9082 of 2010(I) -------------------------------------- PETITIONER(S): ------------------------- M/S. TRINITY ARCADE PVT. LTD. TRINITY HOUSE, MAMANGALAM, OPP. YATHRI NIVS, COCHIN REPRESENTED BY ITS MANAGING DIRECTOR, MR. ROY JOSEPH. BY ADV. SMT.LATHA K RESPONDENT(S): ------------------------ 1. THE STATE OF KERALA, REPRESENTED BY CHIEF SECRETARY, SECRETARIAT,THIRUVANANTHAPURAM. 2. DEPUTY COMMISSIONER(APPEALS), COMMERCIAL TAXES, ERNAKULAM. 3. COMMERCIAL TAX OFFICER(WORKS CONTRACT), ERNAKULAM. 4. COLLECTOR/AUTHORISED COMMERCIAL TAX OFFICER, REVENUE RECOVERY, KAKKANADU, ERNAKULAM. BY GOVT. PLEADER MR.C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 22/03/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: tss P.R. RAMACHANDRA MENON, J. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ W.P.(C).No.9082 of 2010 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Dated this the 22nd day of March, 2010 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ J U D G M E N T The petitioner is challenging the condition imposed by the 2nd respondent/appellate authority, vide Exts.P8/P8(a), directing the petitioner to deposit 35% of the disputed amount and to furnish sufficient security bond for the balance amount, so as to avail the benefit of interim stay, pending consideration of the statutory appeal filed against the assessment order. 2. The learned counsel for the petitioner submits that, the specific grounds, factual as well as legal, projected by the petitioner in the appeal have not been properly adverted to by the appellate authority, while considering the scope of interference and granting interim stay, and as such the condition imposed is only as a matter of course, which is stated as not correct or sustainable. The learned counsel also submits that, the petitioner is not liable to pay any tax, W.P.(C).No.9082 of 2010 2 by virtue of the law declared by the Division Bench of this Court on the point. 3. The learned Government Pleader submits that, the assessment was finalised on the basis of the figures supplied by the petitioner and this aspect is sought to be substantiated by referring to the contents of paragraph-6 of the writ petition; which is extracted below: “It is true that the petitioner is not at all liable to taxable under the KVAT Act as per the Judgment of the Division Bench of the Hon'ble High Court of Kerala in W.P.(C).No.19901 of 2007(T) dated 28.08.2009 (Gokulam Engineers (India) Pvt Ltd., Vs. State of Kerala) and if at all liable then also the total amount received including the cost of undivided share of land and registration for that period 2008-2009 is only Rs.43,13,41,107/- minus 25% U/R 10, thus taxable only Rs.32,35,05,831/- and also liable to deduct input tax credit (more than 1 crore 36 lakhs as per EX-P3) and the cost of undivided share of land and registration from this, whereas the EX-P1 assessment order arbitrarily fixed at Rs.54,63,13,940/-. The total amount received including the cost of undivided share of land and registration for the period for the first quarter is only Rs.6,36,89,569/- minus 25% U/R 10, thus taxable only Rs.4,77,67,177/- and also liable to deduct input tax credit and the cost of undivided share of land and registration from this, whereas the EX-P1 A assessment order arbitrarily fixed at Rs.27,31,56,970/-. The total amount received including the cost of undivided share of land and registration for the second quarter is W.P.(C).No.9082 of 2010 3 only Rs.3,63,02,062/- minus 25% U/R 10, thus taxable only Rs.2,72,26,547/- and also liable to deduct input tax credit and the cost of undivided share of land and registration from this, whereas the EX-P1B assessment order arbitrarily fixed at Rs.27,31,56,970/-. Now the demand as per these illegal assessment orders is coming more than what totally received by the petitioner during the entire period.” The learned Government Pleader submits that, the tax liability fixed upon the petitioner is not assailable in the above circumstances. 4. The case projected before the appellate authority, challenging the assessment order, has very much been considered by the said authority as borne by the impugned orders, wherein it has also been specifically observed that the contention raised before the appellate authority was entirely a 'new one', which was never raised before the assessing authority any time before. The claim now raised by the petitioner can be considered and adjudicated, only with reference to the documents and records and it was in the said circumstance, that the appellate authority, taking note of the materials on record and also the rival submissions, held that W.P.(C).No.9082 of 2010 4 the conditional stay could be granted, directing the petitioner to deposit 35% of the disputed amount and to furnish security for the balance amount. The only aspect to be considered is whether there is proper application of mind or not and whether the appellate authority has passed the impugned order in a stereo-typed manner, as a matter of course. Going by the contents of Exts.P8/P8(a), the appellate authority has discussed the facts and figures borne by the records and the decision has been arrived at, with proper application of mind. This being the position, no interference is warranted with regard to the conclusion arrived at. 5. The learned counsel appearing for the petitioner submits that the quantum involved is very huge and that 35% of the condition imposed itself will come to nearly 4 crores. If the case is considered on merits, with reference to the actual figures, there is every reasonable chance for allowing the appeal and the petitioner will not be liable to pay any amount; submits the learned counsel. W.P.(C).No.9082 of 2010 5 6. Considering the particular facts and circumstances, this Court finds that instead of 35% now ordered to be satisfied, the petitioner could be directed to deposit 25% of the disputed amount and furnish security for the balance amount for availing the benefit of interim stay. Accordingly, the condition imposed in Exts.P8/P8(a) is modified to the above extent. Once the petitioner satisfies the condition as above, the petitioner will be entitled to continue to avail the benefit of the interim stay granted by the appellate authority, during the pendency of the appeal. Taking note of the fact, the time stipulated in Exts.P8/P8(a) is already over, this Court grants a further period of one month from today, to comply with the conditions. The writ petition is disposed of as above. P.R. RAMACHANDRA MENON JUDGE nl