Quashed

M/S.Forest Industries(Travancore) Ltd., v. the Commercial Tax Officer and Others

Kerala HC30 Nov 2011WP(C)/8454/2010

Case brief

AI extract

What is this about?

The Court quashed a penalty order imposed on a State-owned company for alleged KVAT Act violations. It directed the tax authority to reconsider the matter and grant an opportunity for personal hearing and document production before finalizing the decision or enforcing recovery.

What did the court decide?

Ext.P5 order quashed, direction to 1st respondent to reconsider matter after affording personal hearing and receiving objections within two weeks, stay on recovery steps.

M/S.Forest Industries(Travancore) Ltd., Vs the… — GST and Indirect Tax | Kerala HC (2011)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT :

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THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 30TH NOVEMBER 2011 / 9TH AGRAHAYANA 1933

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WP(C).No. 8454 of 2010(F) -------------------------------------

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PETITIONER(S): -----------------------

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MESSRS FOREST INDUSTRIES (TRAVANCORE) LTD. (A KERALA GOVERNMENT COMPANY), THAIKATTUKARA P.O., ALUVA-683 106, REPRESENTED BY ITS MANAGING DIRECTOR.

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BY ADV. SRI.A.KUMAR

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RESPONDENT(S):

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--------------------------

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1. THE COMMERCIAL TAX OFFICER (WC), OFFICE OF THE DEPUTY COMMISSIONER, DEPARTMENT OF COMMERCIAL TAXES, ALAPPUZHA.

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2. THE ASSISTANT COMMISSIONER OF KVAT, DEPARTMENT OF COMMERCIAL TAXES, SPECIAL CIRCLE, KAP COMPLEX, ALUVA, (OFFICE OF THE ASST. COMMISSIONER, SPECIAL CIRCLE, MATTANCHERRY AT ALUVA).

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3. THE DY. TAHSILDAR, REVENUE RECOVERY, ALUVA.

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BY GOVT. PLEADER MR.MANOJ P.KUNJACHAN.

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 30/11/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).No. 8454 of 2010(F)

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APPENDIX

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PETITIONER'S EXHIBITS:

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EXT.P1:	COPY OF THE AGREEMENT WITH THE WORK SCHEDULE.
EXT.P2:	COPY OF THE INVOICE RAISED BY SREE SAKTHI CONSTRUCTIONS ON THE PETITIONER.
EXT.P3:	COPY OF THE INVOICE FOR THE SUPPLY EFFECTED TO KERALA FOREST RESEARCH INSTITUTE, PEECHI BY PETITIONER.
EXT.P4:	COPY OF THE NOTICE ISSUED TO PETITIONER BY FIRST RESPONDENT DATED 12/10/2009.
EXT.P5:	COPY OF THE ORDER PASSED BY THE FIRST RESPONDENT DATED 10/11/2009.
EXT.P6:	COPY OF THE LETTER DATED 11/02/2010 SENT TO FIRST RESPONDENT BY PETITIONER.
EXT.P7:	COPY OF THE COMMUNICATION DATED 19/02/2010 SENT BY FIRST RESPONDENT TO PETITIONER.
EXT.P8:	COPY OF THE LETTER SENT BY FIRST RESPONDENT TO PETITIONER DATED 01/02/2010.
EXT.P9:	COPY OF THE REVENUE RECOVERY NOTICE IN FORM 1 UNDER SECTION 7 DATED 10/02/2010.
EXT.P10:	COPY OF THE REVENUE RECOVERY NOTICE IN FORM 10 UNDER SECTION 34 OF ACT DATED 10/02/2010.

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RESPONDENT'S EXHIBITS:- NIL.

//TRUE COPY//

P.A. TO JUDGE

C.K.ABDUL REHIM, J. ------------------------------------------W.P.(C) No.8454 of 2010

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Dated this the 30^th day of November, 2011

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J U D G M E N T

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Challenge is against Ext.P5 order issued by the 1^st respondent imposing penalty on the petitioner company under Section 67 of the Kerala Value Added Tax Act, 2003 (KVAT Act) alleging violation of Section 10 of the said Act. The petitioner is a company fully owned by the State Government. It is evident that, before imposing the penalty the petitioner was issued with Ext.P4 notice calling upon to submit objections if any within 7 days of receipt of the said notice. But the petitioner had failed to submit any objections within the time stipulated. Hence the 1^st respondent confirmed the proposal. Subsequently on the basis of the request made by the petitioner company, Ext.P7 letter was issued by the 1^st respondent informing the petitioner that production of bills in Form-8 obtained from M/s.Sree Sakthi Constructions, Nangyarkulangara, Harippad is necessary to examine the request. It is further

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W.P.(C).8454/10-F

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-2-

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stated in Ext.P9 that on receipt of such bills the matter will be decided on merits. But without considering the request for reconsideration of the order imposing penalty, recovery steps were initiated. Hence the petitioner is approaching this court challenging the penalty order.

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From the facts and circumstances it is evident that there was omission on the part of the petitioner company in filing objections and in substantiating their contentions through production of necessary documents. But considering the fact that the petitioner company is fully owned by the Government and also considering the fact that the petitioner was requested by the 1^st respondent for producing the bill in question for the purpose of reconsideration of the matter, I am of the view that interest of justice will be served if the 1^st respondent is directed to reconsider the matter and to take a decision after affording an opportunity to the petitioner.

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Under the above mentioned circumstances Ext.P5 order is hereby quashed. The petitioner company is directed to file objections against Ext.P4 proposal within two weeks from the date of receipt of a copy of this judgment. On

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W.P.(C).8454/10-F

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-3-

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receipt of such objection, the 1^st respondent shall finalise the matter afresh, after affording an opportunity of personal hearing to the petitioner. Needless to say that the petitioner should produce Books of Accounts and other supportive documents in order to substantiate their contentions before the 1^st respondent.

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The needful in this regard shall be done at the earliest possible, at any rate, within a period of 6 weeks from the date of receipt of the objections as directed.

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It is made clear that since I had quashed Ext.P5 the recovery steps now initiated on the basis of Exts.P9 and P10 could not be pursued until a fresh decision is taken in compliance with the directions issued above. Needless to say that if there is any failure on the part of the petitioner in submitting the objections within the time stipulated, the respondents will be entitled to proceed with further steps on he basis of Ext.P5.

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(Sd/-)

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C.K.ABDUL REHIM, JUDGE.

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okb

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True copy

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P.A to Judge

M/S.Forest Industries(Travancore) Ltd., v. the Commercial Tax Officer and Others

Case brief

What is this about?

What did the court decide?

M/S.Forest Industries(Travancore) Ltd., v. the Commercial Tax Officer and Others

Case brief

What is this about?

What did the court decide?

What the court decided

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