IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 22ND FEBRUARY 2011 / 3RD PHALGUNA 1932 WP(C).No. 26330 of 2007(H) -------------------------------------- PETITIONER: ------------------- LIFE HEALTH CARE PVT.LTD.27/147, CHEMMAYATH BUILDING, NORTH FORT GATE, THRIPOONITHURA, REP.BY ITS MANAGING DIRECTOR, SRI.T.V.JOY. BY ADVS. SRI.V.M.KURIAN, SRI.MATHEW B. KURIAN, SRI.K.T.THOMAS, SMT.TULASI PANICKER. RESPONDENTS: ------------------------ 1. THE COMMERCIAL TAX OFFICER, KVAT CIRCLE, PALAKKAD. 2. THE COMMERCIAL TAX INSPECTOR, COMMERCIAL TAX CHECKPOST, WALAYAR, PALAKKAD. *ADDITIONAL R.3. IMPLEADED: 3. THE SALES TAX OFFICER (ENQUIRY), O/O. DEPUTY COMMISSIONER, COMMERCIAL TAXES, MATTANCHERRY, PIN – 682 002. *IS IMPLEADED AS ADDITIONAL RESPONDENT NO.3 AS PER ORDER DATED 08/02/11 IN I.A. 1933/11. R1, R2 & ADDL. R3 BY GOVT. PLEADER SRI. C.K. GOVINDAN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 22/02/2011,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: prv. C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.26330 of 2007 ------------------------------------------- Dated this the 22nd day of February, 2011 J U D G M E N T ---------------------- The writ petition was filed when a proceedings under Section 47(2) of the Kerala Value Added Tax Act, 2003 (KVAT Act) was initiated and the goods under transport was detained. By virtue of an interim order passed by this court on 5.9.2007 a direction was issued to release the detention, subject to the petitioner furnishing Bank Guarantee for security deposit demanded. It is stated that on the basis of the interim order the goods in question was released. Subsequently the 3rd respondent proceeded with enquiry as contemplated under Section 47(5) and an order under Ext.P9 was issued imposing penalty to the tune of Rs.5,79,700/- and also directing collection of the amounts by realising the Bank guarantee already furnished. 2. Contention of the petitioner is that the enquiry was finalised without issuing any notice to the petitioner and that he was denied of an opportunity to object the proposal, effectively by producing relevant documents and other records. W.P.(C).26330/10 -2- 3. On a perusal of Ext.P9 it is evident that a notice issued by the 3rd respondent calling upon the petitioner to produce Books of Accounts and other documents, was returned unserved with a postal endorsement as “addressee left”. Therefore the order imposing penalty was issued on an ex-parte basis. According to the petitioner, they were not having any knowledge about the enquiry proceedings and that no notice was ever refused by them. It is the specific case that the petitioner has got ample documents to prove that there was no attempt in evasion of payment of tax due and the transport was genuine. Per contra, contention of learned Government Pleader appearing for the respondents is that, the petitioner had failed to utilise the opportunity afforded with respect to the participation in the enquiry and the 3rd respondent was justified in passing an order imposing penalty. 4. Considering the rival submissions, I am of the view that the petitioner was prosecuting the matter at a stage when the detention was effected. There is no reason to presume that the petitioner had purposefully abstained from the enquiry proceedings, inspite of having knowledge about such proceedings. Therefore I am of the view that interest of justice will be served if the petitioner is afforded with a further opportunity to contest the matter before the 3rd respondent. W.P.(C).26330/10 -3- 5. Under the above circumstances, Ext.P9 is hereby quashed. The 3rd respondent is directed to consider the matter afresh and to pass fresh orders after affording an opportunity of hearing to the petitioner. The petitioner will appear before the 3rd respondent in this regard on 1.3.2011 at 11 A.M. The 3rd respondent shall conduct a hearing of the matter on that day itself or if there is any inconvenience on any other day to which the matter will be adjourned. Fresh order in this regard shall be issued at the earliest, after considering the contentions raised by the petitioner, and also after perusing documents if any produced in support of such contentions. 6. Needless to say that the petitioner will be at liberty to file objections and to produce documents in support of such objections. Fresh orders shall be issued at the earliest possible, at any rate within a period of one month from the date of receipt of a copy of this judgment. 7. Till such time fresh orders are issued, the petitioner shall keep the Bank Guarantee alive and appropriation of the same will be made subject to outcome of the decision. C.K.ABDUL REHIM, JUDGE. okb