IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC WEDNESDAY, THE 23RD JANUARY 2008 / 3RD MAGHA 1929 W/P(C).No. 2046 of 2008(R) --------------------------------- PETITIONER: --------------- M/S. DRIVE INDIA ENTERPRISES SOLUTIONS LTD., SL PLAZA, 5TH FLOOR, PALARIVATTOM, COCHIN-682 025. BY ADV. SRI.A.KUMAR RESPONDENTS: ----------------- 1. THE INTELLIGENCE OFFICER (IB), COMMERCIAL TAXES, THIRUVANANTHAPURAM. 2. THE DY. COMMISSIONER, DEPARTMENT OF COMMERCIAL TAXES (APPEALS), THIRUVANANTHAPURAM. 3. THE INSPECTING ASST. COMMISSIONER, COMMERCIAL TAXES, ERNAKULAM. BY GOVT. PLEADER, SRI. C.K. GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 17/01/2008, THE COURT ON 23/01/2008 DELIVERED THE FOLLOWING: ANTONY DOMINIC, J. = = = = = = = = = = = = = = = W.P. (C) No. 2046 OF 2008 - R = = = = = = = = = = = = = = = Dated this the 23rd day of January, 2008 J U D G M E N T The challenge in this writ petition is against Ext. P5 order passed by the 2nd respondent granting stay on condition that the petitioner remits 50% of the penalty imposed and furnishing security for the balance. 2. The facts of the case are that the petitioner is engaged in the purchase and sale of telecommunication handsets. Ext. P1 notice proposing levy of penalty was imposed alleging evasion of tax. Reply was submitted by the petitioner and finally by Ext. P3, the 1st respondent imposed a penalty of Rs.34,26,816/- for the assessment years 2005-06 and 2006-07, invoking Section 67 of the KVAT Act. Ext. P3 appeal was filed along with Ext. P4 application for stay. Considering the stay petition that was filed, the 2nd respondent passed Ext. P5 order granting stay on condition that the petitioner remits 50% of the penalty and this order is under challenge. 3. Counsel for the writ petitioner reiterated the contentions W.P.(C) No.2046/08 - 2 - that are raised in the memorandum of appeal. The main contention urged was that in respect of the very issue that led to the imposition of penalty on them clarification by the Commissioner of Commercial Taxes has been sought by Ext. P6 application made by the petitioner under Section 94 of the KVAT Act read with Section 78 thereon and that the same is pending. It was contended that once the issue is clarified as sought for, the very basis of the penalty will disappear. According to the counsel, this demonstrates a prima facie case in their favour for an unconditional stay. 4. At this stage, I am only called upon to examine the correctness of Ext. P5, the conditional order of stay passed by the 2nd respondent. The 2nd respondent has found that the petitioner has made out a prima facie case for a conditional stay. This findign is necessarily taking into account the contentions including the pendency of Ext. P7, seeking clarification of the issue. Therefore, on the materials, I am satisfied that the 2nd respondent has taken into account all relevant aspects and thereafter passed the impugned order of stay. Petitioner could not make out any perversity in this order and therefore Ext. P5 is only to be upheld. W.P.(C) No.2046/08 - 3 - 5. Learned counsel for the petitioner thereupon prayed for extension of time for making payment in terms of Ext.P5. Considering the submissions that were made I direct that it will be open to the petitioner to remit the amount payable as per Ext. P5 within two weeks from today. I also direct that Ext. P6 demand notice issued under Section 7 of the Revenue Recovery Act be kept in abeyance for two weeks. Writ petition is disposed of as above. ANTONY DOMINIC JUDGE jan/-