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M/S. St. Mary'S Hotels PVT. LTD. vs. The Superintendent Of Central Tax

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WP(C)/41488/2017HC KeralaGSTCNR KLHC01089431201713 July 2018Bench: HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU9 pages

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Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU FRIDAY, THE 13TH DAY OF JULY 2018 / 22ND ASHADHA, 1940 WP(C).No. 41488 of 2017 ----------------------- PETITIONER(S) ------------- 1 M/S.ST.MARY'S HOTELS PVT.LTD., ST.MARYS CORPORATE TOWERS, MUTHOOR P.O., THIRUVALLA, REPRESENTED BY THE MANAGING DIRECTOR. 2 T.O.ALEYAS, AGED 56,S/O.UNNITTAN, RESIDING AT THOTTATHIL HOUSE, MUTHOOR P.O., THIRUVALLA, PATHANAMTHITTA DISTRICT. (PRESENT MANAGING DIRECTOR). BY ADVS.SRI.JOSEPH KODIANTHARA (SR.) SRI.V.ABRAHAM MARKOS SRI.ABRAHAM JOSEPH MARKOS SRI.ISAAC THOMAS SRI.HARAN THOMAS GEORGE SMT.RACHEL ABRAHAM RESPONDENT(S): -------------- 1. THE SUPERINTENDENT OF CENTRAL TAX & CENTRAL EXCISE, KOTTAYAM RANGE, POLACHIRKAL MANSION, C.M.S.COLLEGE ROAD, KOTTAYAM-686001. 2. THE COMMERCIAL TAX OFFICER (LUXURY TAXES), KOTTAYAM, KOTTAYAM P.O.,PIN-686001. R1 BY ADV. SREELAL N. WARRIER, SC, R2 BY GOVERNMENT PLEADER SRI SHAMSUDHEEN.V.K. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13-07-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.V. WP(C).No. 41488 of 2017 (I) --------------------------- APPENDIX PETITIONER(S)' EXHIBITS ------------------------ EXHIBIT P1 TRUE COPY OF ORDER DATED 05.02.2013 ISSUED BY THE COMPANY LAW BOARD, NEW DELHI IN CP NO.30/2003. EXHIBIT P2 TRUE COPY OF FINAL ORDER DATED 09.10.2015 PASSED BY THIS HONOURABLE COURT IN REVIEW PETITION NO.478 OF 2015 IN COMPANY APPEAL NO.6/2013. EXHIBIT P3 TRUE COPY OF JUDGMENT DATED 27.09.2016 PASSED BY THE HONOURABLE SUPREME COURT OF INDIA IN SLP(CIVIL) NO.30483 OF 2015 AND 30589 OF 2015. EXHIBIT P4 TRUE COPY OF ORDER DATED 13.02.2017 PASSED BY THE NATIONAL COMPANY LAW TRIBUNAL, CHENNAI. EXHIBIT P5 TRUE COPY OF MINUTES OF THE EXTRA ORDINARY GENERAL MEETING HELD ON 25.02.2017. EXHIBIT P6 TRUE COPY OF COMPANY APPLICATION NO.57 OF 2017 IN COMPANY PETITION NO.9/2016 FILED BY THE PETITIONERS BEFORE THE NATIONAL COMPANY LAW TRIBUNAL, CHENNAI. EXHIBIT P7 TRUE COPY OF THE WRITTEN SUBMISSION DATED 21.11.2017 FILED BY THE PETITIONERS BEFORE THE NATIONAL COMPANY LAW TRIBUNAL, CHENNAI IN COMPANY APPLICATION NO.57 OF 2017 IN COMPANY PETITION NO.9 OF 2016. EXHIBIT P8 TRUE COPY OF LETTER DATED 23.01.2017 ISSUED BY THE RESPONDENT TO THE 1ST PETITIONER. EXHIBIT P9 TRUE COPY OF REPLY DATED 08.03.2017 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT. EXHIBIT P10 TRUE COPY OF LETTER DATED 04.12.2017 ISSUED BY THE 1ST RESPONDENT TO THE 1ST PETITIONER. EXHIBIT P11 TRUE COPY OF NOTICE DATED 07.11.2017 ISSUED BY THE 2ND RESPONDENT TO THE 1ST PETITIONER. EXHIBIT P12 TRUE COPY OF ORDER DATED 21.11.2017 PASSED BY THIS HONOURABLE COURT IN WP(C) NO.37461/2017. EXHIBIT P13 TRUE COPY OF INTERIM ORDER OF STAY DATED 19.01.2018 PASSED BY THIS HONOURABLE COURT IN WPC NO.41488/2017. EXHIBIT P14 TRUE COPY OF ORDER DATED 6.3.2018 PASSED BY THE NATIONAL COMPANY LAW TRIBUNAL, CHENNAI IN C.A.57/2017 IN C.P.9/2016 EXHIBIT P15 TRUE COPY OF LETTER DATED 3.5.2018 FROM THE SUPERINTENDENT OF CENTRAL GST AND CENTRAL EXCISE, KOTTAYAM TO THE IST PETITIONER. WP(C).No. 41488 of 2017 (I) --------------------------- EXHIBIT P16 TRUE COPY OF LETTER DATED 11.5.2018 ISSUED BY THE PETITIONERS TO THE SUPERINTENDENT OF CENTRAL GST AND CENTRAL EXCISE, KOTTAYAM. EXHIBIT P17 TRUE COPY OF LETTER DATED 24.05.2018 ISSUED BY THE PETITIONERS TO THE SUPERINTENDENT OF CENTRAL GST AND CENTRAL EXCISE, KOTTAYAM. EXHIBIT P18 TRUE COPY OF ORDER-IN-ORIGINAL NO.COC-EXCUS-000-COM 021 & 022/2016-17 DATED 21.6.2016 ISSUED BY THE COMMISSIONER OF CETRAL EXCISE CUSTOMS & SERVICE TAX,COCHIN COMMISSIONERATE,COCHIN. EXHIBIT P19 TRUE COPY OF ORDER-IN-ORIGINAL NO.207/16-17 DATED 26.08.2016 ISSUED BY THE JOINT COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & SERVICE TAX, COCHIN COMMISSIONERATE,MCOCHIN. EXHIBIT P20 TRUE COPY OF ORDER (ORIGINAL) NO.46/2017/ST SERVICE TAX DATED 30.03.2017 ISSUED BY THE ASSISTANT COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, KOTTAYAM. RESPONDENTS EXHIBITS: NIL -------------------- /TRUE COPY/ K.V. P.S.TO JUDGE 25.07.2018 DAMA SESHADRI NAIDU, J. ================================== W.P.(C). No. 41488 of 2017 ====================================== Dated this the 13th day of July, 2018

JUDGMENT The 1st petitioner, a private limited company, running a hotel, has been caught in a long-drawn litigation. It went up to Supreme Court. Now, a new management took over the affairs. In this writ petition, the company questions what its calls the “undue haste shown” shown by the respondent authorities in calling for “authenticated Balance Sheet and Profit and Loss Account.” In fact, the company questions Exts.P8 and P10 notices and also seeks stay of the Exts.P18 to P20 orders.

2.

To be specific, I may note that the Superintendent of Central Tax & Central Excise, the first respondent issued Ext.P8 notice to the company, asking it to provide “the details of income it received under all income heads and -2- the details of expense incurred towards legal service and manpower and security services received for the period from 01.04.2015 to 31.03.2016.” He has also wanted authenticated copies of Ledger Accounts for the same period. Besides, he wanted the copies of Balance Sheet and P & L Account for 2015-16. 3. The company replied through the Ext.P8, seeking more time. But the first respondent issued the Ext.P10, requiring the petitioner company to produce the information and documents in seven days. Aggrieved, the company and its Managing Director filed this writ petition.

4.

The learned Senior Counsel for the petitioners has submitted at length about the labyrinth of litigation the company has faced. He has, then, submitted that through Ext.P14, the National Company Law Tribunal (NCLT) has set aside all the accounts from 2003 onwards. It has also permitted the company to draw

-3- fresh accounts. Unless fresh accounts are drawn up, the company cannot comply with the demands in the Ext.P8 and P10 notices.

5.

So the learned Senior Counsel has submitted that the company may be given more time to prepare the accounts. So it can, then, comply with the statutory demands.

6.

This case has seen another development, too. When the new management was grappling with, according to the learned Senior Counsel, the earlier management’s mi eeds,

the company

received

Ext.P15 communication. Through that, the company realised that the Commissioner, the Joint Commissioner, and the Assistant Commissioner passed orders on 21.06.2016, 26.08.2016, and 30.03.2017 respectively. Those orders apparently were passed during the reign of the previous management. But it ignored them.

7.

It also emerges that when the new management wrote

-4- to the Department that it knew nothing about those orders, the department supplied the Exts.P18 to P20 copies. The petitioner company seeks stay of those proceedings, too.

8.

The learned Standing Counsel for the Department has, however, vehemently opposed any concession to the company. He has submitted that NCLT has not set aside the whole set of accounts. According to him, the company still possesses the basic records and it can as well respond to the notices based on these records. About the Exts.P18 to P20, he asserts that the company has an efficacious alternative remedy.

9.

Eventually, from the Exts.P18 to P20, it emerges that the quantified liability may come to about Rs.47 Lakhs. This Court, first, suggested whether the company was willing to deposit a part of the tax so that the matter could be examined deeper. But the learned Senior Counsel has submitted that the petitioner received

-5- Exts.P18 P20 orders only on 25.05.2018. Taking that as a reckoning point, the company still has time to appeal. As a result, this Court may dispose of the matter observing that the company can exhaust its appellate remedy.

10.

At any rate, since the petitioner needs breathing time to approach the appellate authority, it is only fair, the learned Senior Counsel pleads, that the all further steps under Exts.P18 to P10 must be stayed for three weeks. I find the request fair. So I hold that all further proceedings under the Exts.P18 to P20 will stand stayed by three weeks, to enable the company to invoke its appellate remedies.

11.

About the Exts.P8 and P10 notices calling for the accounts and other records, I may have to consider the peculiar circumstances of the case; that is, the long- drawn litigation and the change of management. It serves the interest of justice if the company is granted

-6- six months' time to prepare the accounts and to submit them before the authorities. The learned Senior Counsel has fairly submitted that the company will not take limitation as a defence. By staying the operation of the Ext.P18 to P20 for three weeks, and by granting six months’ time for the company to respond to the Exts.P8 and P10 notices, this Court disposes of the writ petition. DAMA SESHADRI NAIDU JUDGE

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.