M/S Manappuram Jewellers LTD. vs. The State Tax Officer (Ib)
Original PDF →IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.M.BADAR THUR AY, THE 08TH DAY OF APRIL 2021 / 18TH CHAITHRA, 1943 WP(C).No.8931 OF 2021(N) PETITIONER: M/S MANAPPURAM JEWELLERS LTD. 4/522, 1ST FLOOR, MANAPPURAM HOUSE, VALAPPAD P.O.THRISSUR-680 567, REPRESENTED BY ITS CHIEF FINANCIAL OFFICER, BASANT BHASKAR. BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENTS: 1 THE STATE TAX OFFICER (IB) SGST DEPARTMENT, THRISSUR-680 004. 2 THE COMMISSIONER OF STATE TAX, STATE GST DEPARTMENT, TAX TOWERS, KILLIPPALAM, KARAMANA, THIRUVANANTHAPURAM-695 002. SMT. THUSHARA JAMES, GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.04.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C).No.8931 OF 2021(N) 2 JUDGMENT Dated this the 8th day of April 2021 Heard the learned counsel for the petitioner and the learned Government Pleader takes who notice for respondents No. 1 and 2. 2. The learned counsel for the petitioner drew my attention to the showcause notice at Ext.P1 dated 02.03.2021 issued under Section 67 of the KVAT Act and submitted that the respondent Department has revised the showcause notice by issuing another showcause notice at Ext.P1(a) on 22.03.2021. It is argued that by this revised showcause notice dated 22.03.2021, the petitioner was granted time upto 25.03.2021 for filing written objection. My attention is drawn to the averments in the showcause notice which are reviving suppressed turnover of Rs.21,79,70,500/-. With this, it is argued by the learned counsel for the petitioner that the petitioner, on 25.03.2021 has moved an application for adjournment for three months, in order to prepare and produce required documents for objecting the proposal of imposition of penalty. It is submitted that vide communication at Ext.P2, the petitioner had submitted that the petitioner had received notices from various departments of State Authorities and voluminous data is required for preparation of objection for multiple years which requires huge human efforts. It is
WP(C).No.8931 OF 2021(N) 3 submitted that in the adjournment application itself, the petitioner has mentioned that the time given is very short and therefore, atleast three months additional time be granted. With this, the learned counsel for the petitioner drew my attention to the final order at Ext.P3 passed under Section 67 of the KVAT Act imposing penalty of Rs.21,79,70,500 /- on the petitioner. It is argued that just a passing reference in the impugned order at Ext.P3 reviving the request for adjournment made by the petitioner vide application at Ext.P2. It is argued that the State Tax Officer has not considered the adjournment application properly and the impugned order is silent as to the reasons for which the said request is rejected.
The learned Government Pleader opposed the petition by contending that the impugned order itself shows that 31 communications are referred which implies that the petitioner was granted proper opportunity of hearing during the penalty proceedings.
Sub Section 3 of Section 67 of the Kerala Value Added Tax Act, 2003 makes it clear that no order of imposing penalty can be passed unless the person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter. In the case in hand, the first showcause notice was issued on 02.03.2021 which is followed by another revised showcause notice on 22.03.2021
WP(C).No.8931 OF 2021(N) 4 and the final order is passed on 27.03.2021 and that too, imposing huge penalty of Rs.21,79,70,500/-. The request for adjournment made by the petitioner at Ext.P2 was not even considered while imposing penalty. Prima facie, a case for breach of principles of natural justice is made out.
Sub Section 3 of Section 67 of the Kerala Value Added Tax Act, 2003 provides for grant of opportunity of hearing to the assessee on which, the penalty is sought to be imposed. Sub Section 3 of Section 67 of the Kerala Value Added Tax Act, 2003 as such provides that the assessee should be given due opportunity to prefer his objection to the showcause notice and to defend the penalty proceedings. Principles of natural justice are to be adhered in its true perspective. Opportunity of hearing as envisaged by Sub Section 3 of Section 67 of the Kerala Value Added Tax Act, 2003 is not an empty formality. In the case in hand, virtually the petitioner was granted three days time to defend the penalty proceedings, in which huge penalty was sought to be imposed on the petitioner. The petitioner sought time by mentioning cogent reasons, however time was not granted to him as prayed. Therefore, the impugned order imposing penalty is suffering from non-adherence to the principles of natural justice and therefore, needs to be quashed and set aside. Hence the
WP(C).No.8931 OF 2021(N) 5 petition is allowed with the following order. The impugned order at Ext.P3 is quashed and set aside. The matter is remitted to the State Tax Officer for fresh hearing. The petitioner to appear before the respondent State Tax Officer on 31.05.2021 at 11.30 am and then to abide by the directions of the State Tax Officer. The petitioner to file his reply/objection with all necessary documents before the respondent State Tax Officer on or before 15.06.2021. Thereafter, the State Tax Officer is directed to decide the proceedings under Section 67 of the KVAT Act, 2003 by following the principles of natural justice within a period of one month thereafter. Needless to mention that the petitioner should co-operate the respondent State Tax Officer in the penalty proceedings. A.M.BADAR N JUDGE
WP(C).No.8931 OF 2021(N) 6 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2014-15 DATED 2.3.2021 EXHIBIT P1 (a) COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2014-15 DATED 22.3.2021 EXHIBIT P2 COPY OF LETTER SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT DATED 25.3.2021 EXHIBIT P3 COPY OF ORDER NO IBC.12/2019-20 ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2014-15 DATED 27.3.2021
Reproduced from the public record of the Kerala High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.