IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR TUESDAY, THE 22ND JULY 2008 / 31ST ASHADHA 1930 WP(C).No. 21201 of 2005(Y) -------------------------- PETITIONER(S): --------------- C.M.BEENA, M/S. VINAYAKA TRADERS, KUDAYATHOOR, THODUPUZHA. BY ADV. SMT.S.K.DEVI SRI.K.P.PRADEEP (PAYYANNUR) RESPONDENT(S): --------------- 1. THE SALES TAX OFFICER, 2ND CIRCLE, DEPT. OF COMMERCIAL TAXES, THODUPUZHA. 2. THE INTELLIGENCE OFFICER (IB), O/O. THE INSPECTING ASST. COMMISSIONER (INT), DEPT. OF COMMERCIAL TAXES, KOTTAYAM. 3. STATE OF KERALA, REPRESENTED BY ITS SECRETARY (FINANCE), SECRETARIAT, THIRUVANANTHAPURAM. G.P. SRI.TEKCHAND FOR R1 TO 3 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 22/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX PETITIONER'S EXHIBITS: P1: TRUE COPY OF CERTIFICATE DT.4.4.05. P2: TRUE COPY OF ANNUAL RETURN FOR THE YEAR 2002-03 DT.30.4.03. P2a: .DO. 2003-04 DT.20.4.04. P2b: .DO. 2004-05 DT.20.4.05. P3: TRUE COPY OF ORDER DT.6.5.05 (2002-03, 2003-04, 2004-05). P4: TRUE COPY OF APPLICATION DT.28.3.05. P5: TRUE COPY OF LETTER DT.9.4.05. TRUE COPY PA TO JUDGE C.N.RAMACHANDRAN NAIR, J. .................................................................... W.P.(C) No.21201 of 2005 .................................................................... Dated this the 22nd day of July, 2008. JUDGMENT The petitioner is challenging Ext.P3 order whereunder penalty is levied under Section 45A of the KGST Act for the assessment years 2002- 2003, 2003-2004 and 2004-2005. The sales in respect of which penalty is levied, were made to SIDCO which is a Government of Kerala undertaking. It is not known whether petitioner has collected the tax from the purchaser for supply of furniture made to them. Counsel submitted that tax was not collected, though petitioner remitted the same later with interest. Counsel produced copy of notification SRO 544/2007 dated 18.6.2007 wherein exemption is seen granted to Khadi Industries, turnover of which is below Rs.50 lakhs. Since Ext.P3 is issued by the second respondent before the above notification was issued with retrospective effect, W.P. is disposed of directing the second respondent to reconsider the penalty order based on notification aboverferred and based on facts pertaining to turnover, particularly collection of tax etc. of the petitioner and pass fresh orders within a period of two months from now. The petitioner will produce copy of this judgment before the second respondent and furnish certificate and 2 other records for him to consider the matter. As and when fresh orders are issued, he will recall Ext.P3 which is under challenge in this W.P. Recovery proceedings will remain stayed until revised orders are issued and thereafter recovery will be pursued only if penalty or part of it is sustained. C.N.RAMACHANDRAN NAIR Judge pms