IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON FRIDAY, THE 22ND MAY 2009 / 1ST JYAISHTA 1931 WP(C).No. 16789 of 2003(W) --------------------------------------- PETITIONER(S): ------------------------- SOUTHERN UNION PLASTIC INDUSTRIES, THALORE, TRISSUR REPRESENTED BY C. MUKUNDAN, MANAGING PARTNER. BY ADV. MR.KMV.PANDALAI RESPONDENT(S): ------------------------- 1. ASSISTANT COMMISSIONER (ASSESSMENT) II, DEPARTMENT OF COMMERCIAL TAXES, THRISSUR. 2. DEPUTY COMMISSIONER, DEPARTMENT OF COMMERCIAL TAXES, TRISSUR. GOVERNMENT PLEADER MR.V.K.SHAMSUDDIN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 22/05/2009 , THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ORDER ON IA. NO. 1989/2003 IN WPC. NO.16789/2003 DISMISSED 22.05.2009 SD/- P.R.RAMACHANDRA MENON, JUDGE APPENDIX PETITIONER'S EXHIBITS P1:- COPY OF THE ASSESSMENT ORDER DT. 4.10.99. P2:- COPY OF THE ASSESSMENT ORDER DT. 5.10.99 PASSED BY THE IST RESPONDENT P2(a):- COPY OF THE NOTICE DT. 28.12.99 ISSUED BY THE IST RESPONDENT. P3:- COPY OF THE REVISION PETITION FILED FOR 96-97 DT. 5.2.00. P4:- COPY OF THE REVISION PETITION FILED FOR 97-98 DT. 5.2.2000. P5:- COPY OF THE INTIMATION DT. 18.3.2000 ISSUED BY THE IST RESPONDENT. P6:- COPY OF THE REVISION ORDER DT. 18.9.2000 PASSED BY THE 2ND RESPONDENT. P7:- COPY OF THE REVISION ORDER PASSED BY THE 2ND RESPONDENT FOR 97-98. P8:- COPY OF THE PETITION SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DT. 15.11.01. P9:- COPY OF THE ORDER PASSED BY THE 2ND RESPONDENT DT. 18.10.02. TRUE COPY P.S. TO JUDGE TSS P.R. RAMACHANDRA MENON, J. ........................................................................ W.P.(C) No. 16789 OF 2003 ......................................................................... Dated this the 22nd May, 2009 J U D G M E N T The grievance of the petitioner is against sustainability of penal interest ordered to be paid under Section 23(3) of the Kerala General Sales Act. The petitioner being an 'SSI' unit is eligible to have certain benefits on the base of turnover limits. According to the petitioner he was liable to pay the tax in respect of the product only at the rate of 4%, in view of the stipulation that only such rate would be attracted if the turnover was not above Rs.50 lakhs, on which case the rate of tax applicable would only be 10%. It is stated that a clarification was issued as S.RO.No.585 of 1996 stating that if the turn over was above Rs.50 lakhs, with respect to the first year, the higher rate would be applied with respect to the actual extent of turnover which exceeded Rs.50 lakhs and the second year onwards, the higher rate would be made applicable to the entire turnover. The petitioner submits that denial of the benefits to the petitioner is quite wrong and illegal. 2. Met with the said circumstance, the petitioner filed W.P.(C) No. 16789 OF 2003 2 revision petition before the second respondent as borne by Ext.P6 and P7. It is seen from the said proceedings that the second respondent considered the matter and declined to interfere with the assessment order in respect of the assessment year 1996-97, whereas the revision in respect of the subsequent year ie 1997- 98 was interfered with and the matter was remanded to the assessing authority to have it reconsidered and finalized, after giving an opportunity of hearing to the petitioner. The petitioner approached this Court challenging the rationale on the part of the second respondent in passing Ext.P6 and P7 orders. The main contention of the petitioner is that, the petitioner having declared the entire turnover correctly in the returns filed by him and since there is no default on his part, there should not have been any burden to pay penal interest, which actually amounts to a punishment in view of the law declared by the Apex Court on the point. The learned counsel appearing for the petitioner submits that the issue as to the sustainability of imposing penalty under such circumstances is covered by the decision rendered by a Division Bench of this Court reported in (2004) 12 KTR 133(Ker) [P.K. DAMODARAN vs. STATE OF KERALA ]. The learned W.P.(C) No. 16789 OF 2003 3 Government Pleader submits that the said decision stands on a different footing and that another Division Bench of this Court has made the position of Law clear as per the decision in (2008) 16 VST 294(Ker) [CHANDRAMANI TRADERS vs. STATE OF KERALA]. The learned counsel appearing for the petitioner submits that the latter decision rendered in Chandramani Traders' case was with reference to the particular facts and circumstances involved therein and the same cannot be made applicable to the case in hand. The learned counsel further submits that on an earlier occasion, taking note of similar circumstances and also after considering the dictum in Maruthi Wire Industries (P) Ltd vs. Sales Tax Officer [2001(2) KLT 100), a Division Bench of this Court as per the Judgment dated 28.01. 2003 in Writ Appeal No.2364 of 2002 had interfered with the impugned orders, remanding the matter to be considered by the revisional authority in tune with the observations as made there in. 3. This Court finds it only fit and proper to permit the petitioner to highlight the legal factual aspects in support of his claim before the second respondent, who apparently has passed W.P.(C) No. 16789 OF 2003 4 conflicting orders as revealed from Ext.P6 and P7, adopting dismissal in the former case while remanding the latter case, though giving a different set of reasoning. 4. In the above circumstances, Ext.P6 and P7 orders passed by the second respondent are set aside and the matter is remanded to the second respondent for considering the matter afresh in the light of the decision rendered by this Court, as referred to herein before and also in the light of such other binding judicial precedents, if any. Final orders shall be passed as expeditiously as possible, at any rate within a period of two months from the date of receipt of a copy of the Judgment, of course, after giving an opportunity of hearing to the petitioner. It is made clear that till final orders are passed, all further coercive proceedings pursuant to Ext.P6 and P7 shall be kept in abeyance. P.R. RAMACHANDRA MENON, JUDGE. lk W.P.(C) No. 16789 OF 2003 5 P.R. RAMACHANDRA MENON, J. ................................................... W.P. (C) No. 16789 OF 2003 ................................................... Dated this the 22nd May, 2009 J U D G M E N T