IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON THURSDAY, THE 8TH APRIL 2010 / 18TH CHAITHRA 1932 WP(C).No. 11604 of 2010(A) -------------------------- PETITIONER(S): --------------- HINDUSTAN PETROLEUM CORPORATION LIMITED, COCHIN REGIONAL OFFICE, KARSHAKA ROAD, ERNAKULAM. REPRESENTED BY ITS MANAGER (FINANCE)-PRAKASAN I.A. BY ADV. SRI.K.I.MAYANKUTTY MATHER SRI.K.S.SAJEEV KUMAR SRI.MAHESH V.MENON RESPONDENT(S): --------------- 1. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (ASSESSMENT I), SPECIAL CIRCLE II, COMMERCIAL TAXES, ERNAKULAM. 2. DEPUTY COMMISSIONER (APPEALS), COMMERCIAL TAXES, ERNAKULAM. 3. INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, ERNAKULAM. 4. VAT APPELLATE TRIBUNAL, ERNAKULAM. BY G.P. SRI.C.K.GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08/04/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R.RAMACHANDRA MENON, J. ------------------------ W.P.(C)No. 11604 OF 2010 ------------------------ Dated this the 8th day of April, 2010 JUDGMENT The petitioner is challenging the correctness and the sustainability of the course pursued by the Departmental Authorities in proceeding with coercive steps against the petitioner, notwithstanding Ext.P2 order passed by the Appellate Authority and notwithstanding the amount already satisfied by the petitioner. 2. The learned counsel for the petitioner submits that the impugned orders passed by the Assessing Authority have already been challenged by filing appeal before the Tribunal along with IAs for stay, wherein Ext.P12 common order has been passed, whereby the petitioner has been directed to deposit '50%' of the demand pertaining to the three assessment years 2005 -06, 2006 -07 and 2007 – 08 and '25%' of the demand relating to the penalty proceedings for the three years on or before 30/3/2010 and to furnish security for the balance amount within 4 weeks. 3. The case of the petitioner is that the petitioner has WPC NO. 11604/2010 -2- already satisfied a sum of Rs. 1,82,16,198/- towards the assessment demanded vide their letter dated 21/5/2009. It is stated that as per the original order, the total amount demanded for the three assessment years, inclusive of tax and interest was Rs.2,41,97,117/-. 50% of the said demand works out to Rs.1,20,98,559/-. This being the position, it is contended that there is an excess deposit in respect of the 50% of the demand and that the same could be given credit to in respect of the disputed 'penalty' in satisfaction of the condition imposed by the Tribunal. The petitioner preferred Ext.P13 representation in this regard, which was disposed of by the Assessing Authority as per Ext. P14, stating that the petitioner had to satisfy '50%' of the 'balance amount' in respect of the assessment for three years and '25%' of the balance demand pertaining to 'penalty' for the three years. 4. The learned Government Pleader submits that the stand taken by the petitioner is not correct or sustainable as it was not 50%/25% (as the case may be), of the entire outstanding liability, but 50% / 25% of the 'balance amount' as clearly stated in the last paragraph of Ext.P12. WPC NO. 11604/2010 -3- 5. The learned counsel for the petitioner submits that the basic point as to the issue involved was not properly considered by the Appellate Authority while passing the conditional order and if the merit was considered, absolutely no liability would have been there. 6. The issue projected before the Tribunal, as discussed in the last paragraph of Ext.P12, is whether the petitioner is entitled to the 'input tax credit' for the purchase value of the goods which are later sold at a subsidized price. It is observed by the Tribunal that, this issue is to be decided in the light of the provisions contained in the '2nd proviso' to sub section Section (3) Section 11 of the Act. With regard to the appeals relating to the levy of penalty the issue is whether the penalty, is justified for non payment of interest. Both these issues involve only questions of law and not a question of fact, which ought to have been considered by the Tribunal. 7. Taking note of the facts and circumstances, the 4th respondent is directed to consider and pass final orders on Ext.P5 to P10 appeals preferred by the petitioner in respect of the assessment orders regarding the fixation of liability as well as WPC NO. 11604/2010 -4- penalty, in accordance with law, as expeditiously as possible, at any rate within three months from the date of receipt of a copy of this judgment. The petitioner will continue to enjoy the benefit of the interim stay granted vide Ext.P12, subject to the condition that the petitioner satisfies '25% of the balance liability' both in respect of the assessment as well as the penalty, simultaneously furnishing security for the balance amount, which shall be satisfied within a period of two weeks. Subject to this, all further recovery proceedings shall be kept in abeyance till the finalisation of the appeals as directed above. The Writ Petition is disposed of as above. P.R.RAMACHANDRA MENON, JUDGE. dpk