IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON TUESDAY, THE 25TH MAY 2010 / 4TH JYAISHTA 1932 WP(C).No. 15966 of 2010(U) -------------------------- PETITIONER(S): --------------- E.FAIZAL, (PROPRIETOR), EDAPPAYIL SANITATIONS, H.S.ROAD, KOPPAM, PALAKKAD DISTRICT. BY ADV. SRI.V.P.SUKUMAR RESPONDENT(S): --------------- 1. THE INTELLIGENCE OFFICER, SQUAD NO.I, COMMERCIAL TAXES, PALAKKAD. 2. THE DEPUTY COMMISSIONER (APPEALS), COMMERCIAL TAXES, ERNAKULAM. 3. THE INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, PALAKKAD. SENIOR GOVT. PLEADER SRI.C.K.YONADAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 25/05/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R.RAMACHANDRA MENON, J -------------------------------------------- WP(C) NO. 15966 OF 2010 -------------------------------------------- Dated this the 25th day of May, 2010 JUDGMENT The petitioner is challenging the correctness and sustainability of Ext.P7 order passed by the appellate authority directing the petitioner to satisfy the 50% of the liability and to furnish security for the balance amount so as to avail the benefit of interim stay during the pendency of the appeal preferred by him against Ext.P2. 2. The sequence of events shows that the petitioner had taken three rooms on lease, by executing Ext.P1 rent agreement on 07.10.2009 and the goods of the petitioner (flooring tiles) were stored in the said rooms. It is said that the petitioner could not get opportunity to declare the above rooms before the concerned authority as contemplated under the relevant provisions of law. Meanwhile, there was an inspection on 13.10.2009 in the premises of the petitioner, pursuant to which, notice was issued to the petitioner proposing to impose the penalty under Section 44 (10) read with Section 44 (8) of the Kerala Value Added Tax Act. Finally, Ext.P2 order was passed imposing penalty as specified. After different rounds of litigation, the petitioner was finally relegated to avail the statutory remedy as borne by Ext.P6 judgment passed by this Court in WP (C) 36381/2009; especially in view of the reliance placed by the petitioner 2 WP(C) No. 15966/2010 on dictum laid down by a Division Bench of this Court in Sajeev Vs. Intelligence Officer [2009 (4) KLT 601]. 3. In the course of events, the 2nd respondent considered the I.A. for stay preferred by the petitioner and after taking note of the mandate in the decision cited supra, Ext.P7 order was passed directing the petitioner to satisfy 50% and to furnish security for the balance amount, which forms the subject matter of challenge in this Writ Petition. 4. Heard the learned Government Pleader as well. 5. The case of the petitioner as put forth by the learned counsel is that, the entire transaction is reflected in the books of accounts of the petitioner, which hence ought to have been referred to by the appellate authority while considering the matter. It is very much evident that the interference made by the Division Bench was only with regard to the sustainability of the 'extent of penalty' as contemplated under the relevant provisions of law. It is of course mentioned therein that, if the transaction is reflected from the books of accounts and if the assessee has explained the emergency, which led to keeping of the goods in the undeclared godown without prior intimation, it is not proper to have imposed the maximum penalty in an automatic fashion. This is a matter which is to be looked into by the appellate authority, with regard to the course to be pursued while passing the interim order as well. Since the impugned order does not 3 WP(C) No. 15966/2010 disclose proper application of mind in this regard, as to the extent of liability now fixed upon the petitioner, this Court finds that the direction to satisfy 50% of the liability upon the petitioner is on the higher side. This Court finds it fit and proper to have it reduced to 25% and to furnish security for the balance amount during pendency of the appeal. Since the time stipulated in Ext.P7 is about to be over, this Court permits the petitioner to satisfy the condition as modified above within a period of 10 days from the date of receipt of a copy of this judgment; on which event, the petitioner will continue to have the benefit of interim stay till the disposal of the Appeal. P.R.RAMACHANDRA MENON JUDGE dnc