IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 26TH MAY 2011 / 5TH JYAISHTA 1933 WP(C).No. 13517 of 2011(L) --------------------------------------- PETITIONER(S): -------------------------- M/S.HEAVENLY HOMES PRIVATE LTD, 5D, V FLOOR, OXFORD BUSINESS CENTRE, SREE KANDATH ROAD, RAVIPURAM, ERNAKULAM, KOCHI-16, REPRESENTED BY ITS DIRECTOR, MUJEEB V.A. BY ADV. SRI.GEORGE KARITHANAM VARGHESE, SRI.C.I.ABRAHAM, SRI.JOSE KURIAKOSE (VILANGATTIL). RESPONDENT(S): -------------------------- 1. ASSESSING AUTHORITY, INTELLIGENCE OFFICER, SQUAD NO. IV, ERNAKULAM, DEPARTMENT OF COMMERCIAL TAXES, GOVERNMENT OF KERALA, EDAPPALLY, KOCHI-24. 2. DEPUTY COMMISSIONER (I), ERNAKULAM/ IACC (I), ERNAKULAM. 3. STATE OF KERALA, REPRESENTED BY SECRETARY, TAXES DEPARTMENT,SECRETRIAT, THIRUVANANTHAPURAM. R1 TO R3 BY SR. GOVT. PLEADER MR.C.K. GOVINDAN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 26/05/2011,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.13517 of 2011 ------------------------------------------- Dated this the 26th day of May, 2011 J U D G M E N T ---------------------- Ext.P9 and P11 orders through which penalty was imposed against the petitioner under Section 67 of the Kerala Value Added Tax Act, 2003 (KVAT Act), is the subject matter of challenge in this writ petition. The orders imposing penalty were challenged without resorting to the statutory remedy of appeal, on the specific ground that those orders are issued in violation of the mandatory procedure prescribed under Section 67(3) of the KVAT Act and also in violation of principles of natural justice. 2. Contention of the petitioner is that, when Ext.P4 and P5 proposals with respect to imposition of penalty were received, the petitioner had submitted detailed reply, as evidenced from Ext.P6 and P7. It is the specific case of the petitioner that all the relevant Books of Accounts and documents in support of the contentions raised in the reply were produced before the respondents. But, in Ext.P9 and P11 orders the respondents had unilaterally discarded those objections as well as the documents produced by observing that no supporting evidence was produced to prove the claim for exemption with W.P.(C).13517/11 -2- respect to amounts spent towards purchase of land. 3. According to the petitioner, through the cryptic observations made, without due advertence to the contentions raised, the respondents found that there was violation of the provisions of the KVAT Act and hence offence punishable under Section 67 was committed by the petitioner. It is specifically contended that the observations in this regard is totally against facts which are supported through the documents produced before the said authority. Further, it is the specific contention that the proceedings of penalty were fianalised without affording any opportunity of personal hearing to the petitioner, as contemplated under Section 67(3). 4. Learned counsel for the petitioner points out that the opportunity contemplated under the statute is not an empty formality and any violation of compliance of such mandatory procedure will vitiate the impugned proceedings. He relies on a decision of this court in Suzion Infrastructure Service Ltd. Vs. C.T.O. (2010 (3) KHC 299) in support of the above contentions. 5. Without going elaborate into the merits of the issue, it is noticed that, before finalising the impugned proceedings, the petitioner was not afforded with any opportunity of hearing. The objections raised by the petitioner were discarded on a unilateral W.P.(C).13517/11 -3- basis. As contended, violation of the mandatory procedure prescribed, will vitiate the orders impugned. Hence I am of the view that Ext.P9 and P11 orders are unsustainable in the eye of law. 6. In the result, the writ petition is allowed and Ext.P9 and P11 are hereby quashed. The respondents are directed to finalise the matter afresh, after affording a reasonable opportunity of hearing to the petitioner. Needles to say that the petitioner will be given liberty to produce further documents, if any required. 7. Fresh orders in this regard shall be issue as early as possible, at any rate, within a period of one month from the date of receipt of a copy of this judgment. C.K.ABDUL REHIM, JUDGE. okb