M/S.Honest Bakery vs. State Of Kerala - Kerala High Court, 08 January 2018

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR MONDAY, THE 8TH DAY OF JANUARY 2018 / 18TH POUSHA, 1939 WP(C).No. 39369 of 2017 PETITIONER M/S.HONEST BAKERY NEAR CATHOLIC SYRIAN BANK, ADHIKARIPADI, MARANCHERRY, PIN-679 577, REPRESENTED BY IT'S MANAGING PARTNER, MR. MAMMED. BY ADVS.SMT.K.LATHA SMT.M.K.HAJARA SRI.C.RAMACHANDRAN RESPONDENTS: 1. STATE OF KERALA REPRESENTED BY CHIEF SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM-695 001. 2. THE INTELLIGENCE OFFICER (IB) DEPARTMENT OF COMMERCIAL TAXES, MALAPPURAM-676 505. 3. SALES TAX OFFICER OFFICE OF THE SALES TAX OFFICER, STATE GOODS AND SERVICES TAX DEPARTMENT, MINI CIVIL STATION, PONNANI NAGARAM, PONNANI-679 583. 4. THE DEPUTY COMMISSIONER (APPEALS) COMMERCIAL TAXES, KOZHIKODE, 673 001. BY GOVERNMENT PLEADER SRI.V.K.SHAMSUDHEEN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08-01-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 39369 of 2017 (U) APPENDIX PETITIONER EXHIBITS EXHIBIT P1 THE TRUE COPY OF THE PENALTY ORDER NO. IB/MPM/ENQ/07(1)2017-18(2016-17) UNDER KERALA VALUE ADDED TAX ACT ISSUED BY THE SECOND RESPONDENT TO THE PETITIONER THE DEMAND NOTICE THEREON DATED 11/07/17. EXHIBIT P2 THE TRUE COPY OF THE APPEAL IN FORM NO. 29 ALONG WITH GROUND OF APPEAL FILE BY THE PETITIONER BEFORE THE THIRD RESPONDENT AGAINST THE P1 PENALTY ORDER FOR THE YEAR 2016-2017. EXHIBIT P3 THE TRUE COPY OF THE STAY PETITION IN FORM NO. 30 FILED BY THE PETITIONER IN THE P2 APPEAL. EXHIBIT P4 THE TRUE COPY OF THE JUDGMENT IN WPC 36513 OF 2017 DATED 14TH NOVEMBER 2017. EXHIBIT P5 THE TRUE COPY OF THE PRE ASSESSMENT NOTICE FOR THE YEAR 2017-2018 UNDER SECTION 25 (1) OF K V A T ACT DATED 20-11-2017 ISSUED BY THE THIRD RESPONDENT TO THE PETITIONER. RESPONDENTS EXHIBITS: NIL //TRUE COPY// P.A TO JUDGE bng P.B.SURESH KUMAR, J - - - - - - - - - - - - - - - - - - - W.P.(c) No.39369 of 2017 - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 8th day of January, 2018

JUDGMENT The petitioner, a partnership firm engaged in running a bakery, has been imposed a penalty under Section 67(1) of the Kerala Value Added Tax Act (the Act) by the second respondent as per Ext.P1 order. Ext.P1 order pertains to the business transaction of the petitioner for the year 2017-2018. The petitioner challenged Ext.P1 order in appeal before the fourth respondent. Ext.P2 is the appeal preferred by the petitioner before the fourth respondent. During the pendency of Ext.P2 appeal, proceedings have been initiated for realization of penalty covered by Ext.P1 order. The petitioner then approached this Court by filing W.P(c) No.36513/2017. The said writ petition was disposed of by this Court, as per Ext.P4 judgment, directing the fourth respondent to pass orders on the application for stay preferred by the petitioner in -2- Ext.P2 appeal. It was also directed in Ext.P4 judgment that till orders are passed on the application for stay by the fourth respondent, further proceedings for realization of the penalty shall be deferred. It is stated by the petitioner that orders are yet to be passed in compliance of Ext.P4 judgment. The grievance voiced by the petitioner, however, is that the third respondent has now initiated proceedings for assessing the escaped turn over of the petitioner of the relevant year under Section 25 of the Act. Ext.P5 is the notice issued by the third respondent in this connection. It is stated by the petitioner that Ext.P5 notice is issued solely based on Ext.P1 order imposing penalty on the petitioner, which has not become final. According to the petitioner, if the proceedings proposed in Ext.P5 notice is completed pending disposal of Ext.P2 appeal, they will be put to irreparable injuries in the event of the appellate authority -3- interfering with Ext.P1 order imposing penalty. The petitioner, therefore, seeks appropriate directions in this regard, in the writ petition.

Heard the learned counsel for the petitioner as also the learned Government Pleader.

A perusal of Ext.P5 notice indicates that the same is issued solely based on Ext.P1 order imposing penalty on the petitioner. There is, therefore, substance in the case set up by the petitioner that the petitioner will be put to irreparable loss, if Ext.P1 order is interfered with by the appellate authority after the culmination of the proceedings initiated in terms of Ext.P5 notice. In the circumstances, the writ petition is disposed of directing the fourth respondent to dispose of Ext.P2 appeal itself on merits, within two months from the date of receipt of a copy of this judgment. Needless to say that till -4- orders are passed on Ext.P2 appeal as directed above, further proceedings pursuant to Ext.P5 shall be deferred. P.B.SURESH KUMAR JUDGE bng