IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 8TH FEBRUARY 2011 / 19TH MAGHA 1932 WP(C).NO. 3720 OF 2011(L) -------------------------------------- PETITIONER(S): ------------------------ P.M. SATHAR, PROPRIETOR, M/S.NRS. TIMBER TRADERS, ERATTUPETTA, KOTTAYAM DIST. BY ADV. SRI.C.K.SREEJITH RESPONDENT(S): -------------------------- 1. COMMERCIAL TAX OFFICER, DEPARTMENT OF COMMERCIAL TAXES, PALA, KOTTAYAM DIST.-686 575. 2. INSPECTING ASSISTANT COMMISSIONER COMMERCIAL TAX DEPARTMENT, PALA, KOTTAYAM DIST- 686 575. 3. DEPUTY THAHASILDHAR, REVENUE RECOVERY PALA, KOTTAYAM DIST. 686 575. 4. DY. COMMISSIONER (APPEALS) COMMERCIAL TAXES, ERNAKULAM – 682 015. 5. STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM – 695 001. R1 TO R5 BY GOVT. PLEADER MR.V.K. SHAMSUDHEEN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08/02/2011,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.3720 of 2011 ------------------------------------------- Dated this the 8th day of February, 2011 J U D G M E N T ---------------------- Petitioner is a registered dealer borne on the files of the 1st respondent under the provisions of the Kerala Value Added Tax Act, 2003 (KVAT Act). The petitioner was having registration under the provisions of the Kerala General Sales Tax Act (KGST Act) till 31.3.2005 and subsequently got registration under the KVAT Act, when the said statute was introduced. Alleging that, the petitioner is in arrears of payment of tax with respect to the years 2006-07, 2007-08 and 2008-09 and also alleging that the petitioner had failed to remit tax amount already collected, along with the return filed for the year 2009-10, he was directed to remit a sum of Rs.20 lakhs as additional security as stipulated under Section 17(1) of the KVAT Act read with Rule 19(1) of the KVAT Rules. On receipt of Ext.P8 notice issued in this regard along with the notice of demand issued under Ext.P9, the petitioner submitted Ext.P10 reply requesting 3 months time for furnishing the additional security as demanded. Subsequently, in Ext.P11 the petitioner was requested to make payment of the amount on or before 8.12.2010. The petitioner again replied through Ext.P12 that he need time by 3 months more, for effecting payment of the additional security. W.P.(C).3720/11 -2- 2. However, thereafter the petitioner submitted Ext.P13, which is a detailed reply in which it was contended that demand for additional security is unsustainable. The petitioner relies upon the second proviso to sub-section (2) of Section 17 of the KVAT Act in order to contend that additional security could not be demanded with respect to a dealer falling under clause (ii) of sub-section (2) of Section 15. Since the petitioner was having registration under the KGST Act immediately before the commencement of the KVAT Act the above said provision will apply in the case of the petitioner, is the contention. 3. Considering the above said dispute I am of the view that it is for the assessing authority to take note of the same and to decide finally as to whether the demand for additional security can be insisted upon. Therefore, without adjudicating on the merits of the objections raised I am proposing to direct the assessing authority to consider Ext.P13 and to take a decision thereof. 4. Yet another grievance voiced by the petitioner is that the assessing authority is denying issuance of Delivery Note to the petitioner, which in turn is preventing him from continuing the business. I am of the opinion that if any request is made in this regard it is for the assessing authority to consider the same on its merits and to take a decision. W.P.(C).3720/11 -3- 5. The petitioner is also seeking direction against the 4th respondent for an early disposal of Ext.P5 and P6 appeals filed. I am of the view that the appellate authority can be directed to have an early disposal of the appeal. 6. Under the above circumstances, the writ petition is disposed of directing the 1st respondent to consider Ext.P13 and to take a decision with respect to the demand for payment of additional security. The 1st respondent will also take appropriate decision on the request if any made by the petitioner, for issuing delivery notes, without any further delay. 7. The 4th respondent is directed to consider and pass orders on the appeals at the earliest. It is also left open to the appellate authority to pass appropriate interim orders with respect to recovery. 8. It is made clear that the demand for additional security cannot be enforced until a decision is taken on the basis of Ext.P13 objections. C.K.ABDUL REHIM, JUDGE. okb