IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM FRIDAY, THE 29TH OCTOBER 2010 / 7TH KARTHIKA 1932 WP(C).No. 32893 of 2010(J) -------------------------- PETITIONER(S): --------------- SAJEEVAN T.R. NISHA METAL INDUSTRIES, THEKKUMBHAGAM, TRIPPUNITHURA. BY ADV. SRI.VIJAYAN. K.U. SRI.K.N.SREEKUMAR RESPONDENT(S): --------------- 1. COMMERCIAL TAX OFFICER, KVAT CIRCLE-1, TRIPPUNITHURA, 2. DEPUTY COMMISSIONER(APPEALS) COMMERCIAL TAXES,ERNAKULAM,PIN-682 015. 3. INSPECTING ASSISTANT COMMISSIONER, ERNAKULAM AT KAKKANAD, KOCHI-30. 4. STATE OF KERALA REPRESENTED BY SECRETARY TO GOVERNMENT,TAXES DEPARTMENT, GOVERNMENT SECRETARIAT,THIRUVANANTHAPURAM. SR. GOVT. PLEADER SRI.V.K.SHAMSUDHEEN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29/10/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.32893 of 2010 ------------------------------------------- Dated this the 29th day of October, 2010 J U D G M E N T ---------------------- Petitioner is a manufacturer of 'screw hooks' and 'screw rings' and 'spring clips/locks'. He is a registered dealer on the rolls of the 1st respondent. The petitioner was remitting tax at the rate of 4% on the said items on the firm belief that the goods dealt with him are taxable only at that rate, being items covered under entry No.3(8)(h) and 3(9)(c) or 82(8) of the IIIrd schedule of the Kerala Value Added Tax Act, 2003 (KVAT Act). As per Ext.P7 clarification issued by the Commissioner of Commercial Taxes and as per the commodity rate finder published by official organ of the Commercial Tax Department, the rate of tax was only 4%. It is submitted that the assessments were finalized against the petitioner inspite of the above clarification levying tax at the rate of 12.5%. With respect to the assessment years 2006-07, 2007- 08 and 2008-09, the matter is now pending consideration before the KAVT Appellate Tribunal in second appeals and that the interim orders of stay has already been granted in such appeals. With respect to the period from April 2009 to September 2009 and from October 2009 to March 2010, appeals were filed against the assessments before the 2nd respondent as evidenced from Ext.P3 and P4. Petitioner had filed stay petitions along with W.P.(C).32893/10-J -2- such appeals. Through Ext.P6 order the 2nd respondent had dismissed the stay petition filed, observing that the petitioner had not established any prima facie case for granting conditional stay. At the same time stay petitions filed along with Ext.P3 appeal was not considered by the 2nd respondent. Aggrieved by dismissal of the stay petition through Ext.P6 order and the coercive steps initiated for recovering amounts covered under the impugned assessments, this writ petition is filed. 2. Contention of the petitioner is that while dismissing the stay petition through Ext.P6 the 2nd respondent had totally failed to take note of the fact that the assessments completed with respect to the previous orders are pending finalisation before the State Tribunal and that the Tribunal had already granted conditional stay. It is also submitted that the appellate authority had failed to take note of clarification issued by the Commissioner with respect to the rate of tax. It is further pointed out that with respect to the previous periods, during pendency of the first appeal this court had granted interim stay subject to condition of payment of 1/3rd of the amount. Under such circumstances dismissal of the stay petition was highly unreasonable and unjustifiable, is the contention. 3. Heard Government Pleader appearing on behalf of the respondent. It is conceded that with respect to the previous W.P.(C).32893/10-J -3- periods stay orders are existing in force, subject to condition of the petitioner remitting 1/3rd of the amounts. It is also conceded that the matter is now pending in dispute before the appellate Tribunal. Considering such circumstances I am of the view that Ext.P6 order need be modified. 4. Under the above circumstances the writ petition is disposed of directing the petitioner to make payment of 1/3rd of the amount in dispute in Ext.P3 and P4 appeals, within a period of two weeks from the date of receipt of a copy of this Judgment and furnishes Security Bond with respect to the balance amount. If the condition as stipulated above is complied with, recovery of the amount, which is in dispute in Ext.P3 and P4 appeals, shall be kept in abeyance till the disposal of the appeals. 5. The 2nd respondent is directed to keep in abeyance disposal of the appeals awaiting decision of the Tribunal on the question which is pending in second appeals, pertaining to the previous periods. C.K.ABDUL REHIM, JUDGE. okb