Kerala High Court
M/S.Karthika Wines vs The Intelligence Officer (Ib) on 26 March, 1999
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR
FRIDAY, THE 9TH DAY OF NOVEMBER 2012/18TH KARTHIKA 1934
WP(C).No. 28827 of 2009 (W)
---------------------------
PETITIONER(S):
-------------
M/S.KARTHIKA WINES, FLR 54,
BOAT JETTY ROAD, ALAPPUZHA
REPRESENTED BY ITS PARTNER, MR.K.P.KARTHIKEYAN.
BY ADVS.SRI.ANIL D. NAIR
SRI.NIVEDITHA A.KAMATH
RESPONDENT(S):
--------------
1. THE INTELLIGENCE OFFICER (IB),
ERNAKULAM.
2. THE DEPUTY COMMISSIONER OF COMMERCIAL
TAXES, ALAPPUZHA.
3. THE COMMISSIONER OF COMMERCIAL TAXES,
THIRUVANANTHAPURAM.
4. THE STATE OF KERALA,
REPRESENTED BY ITS SECRETARY (TAXES)
THIRUVANANTHAPURAM.
BY SPL.GOVERNMENT PLEADER FOR RAXES SRI.MANOJ P.KURYACHAN
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
09-11-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C).No. 28827 of 2009 (W)
APPENDIX
PETITIONER'S EXHIBITS:
EXT.P1: TRUE COPY OF THE ORDER OF THE INTELLIGENCE OFFICER (IB) FOR 1997-
98 ISSUED TO THE PETITIONER DATED 26.3.1999.
EXT.P2: TRUE COPY OF THE ORDER OF THE DY.COMMISSIONER OF COMMERCIAL
TAXES ISSUED TO THE PETITIONER DATED 1.9.1999.
EXT.P3: TRUE COPY OF THE NOTICE ISSUED BY THE COMMISSIONER OF
COMMERCIAL TAXES TO THE PETITIONER DATED 27.5.2003.
EXT.P4: TRUE COPY OF THE OBJECTIONS FILED BY THE PETITIONER BEFORE THE
COMMISSIONER OF COMMERCIAL TAXES DATED NIL.
EXT.P5: TRUE COPY OF THE ORDER ISSUED BY THE COMMISSIONER OF
COMMERCIAL TAXES TO THE PETITIONER DATED 28.8.2003.
EXT.P6: TRUE COPY OF THE JUDGMENT IN MFA NO.675 OF 2003.
// TRUE COPY //
TKS
C.T.RAVIKUMAR, J.
-------------------------------
W.P.(C)No.28827 of 2009
--------------------------------
Dated 9th November, 2012
JUDGMENT
The petitioner was a dealer in Indian Made Foreign Liquor. He was liable to pay turn over tax. He filed returns for the months of April, 1995 to March, 1996, precisely from 1.4.1995 to 31.3.1996 disclosing a taxable turn over of Rs.50,26,437/-. The Intelligence Officer (I.B), Ernakulam collected the details of IMFL purchases of the petitioner for the year 1995-'96 and thereafter, the books of accounts were called for. Upon his failure to produce the books of accounts a penalty under Section 45(A)(i)(c) of the Kerala General Sales Tax Act (for short `KGST Act) was imposed on him. Later, the books of accounts were produced before the Intelligence Officer (I.B). On finding that the assessee had suppressed a huge turn over of Rs.71,09,384/- from the return proceedings were initiated under Section 45(A) of the KGST Act. Notice under Section 45(A) was issued on 1.2.1999. After completing the proceedings, in accordance with law, Ext.P1 order was passed by the Intelligence Officer. As per the same, a penalty of Rs.7,10,938/- was imposed for the year 1995-96 under Section 45A(i)
(d) of the Act. Feeling aggrieved by the same, the petitioner preferred a revision before the second respondent as R.P.No.42/99. The second respondent took into consideration the fact that the monthly returns WP(C).No.28827/2009 2 though did not disclose the entire turn over it was disclosed in annual return and also that the assessee had paid the tax on the turn over along with interest on 2.1.1999 and a certificate to that effect was issued to him by the assessing authority on 4.1.1999, found that as on the date of issuance of notice under Section 45(A) of the KGST Act there was no case for any action under Section 45(A). As per Ext.P2 order the second respondent further found that there was no evasion of tax payment. Based on the said findings and such other findings entered thereon the second respondent held that there was absolutely no justification for imposition of Rs.7,10,985/- as penalty and reduced it to Rs.1,00,000/-. The third respondent, thereafter, initiated suo motu proceedings invoking the power under Section 37 of the KGST Act. He issued Ext.P3 notice to the petitioner. On receipt of Ext.P3 the petitioner has filed his objections as per Ext.P4. Evidently, as per Ext.P4, the petitioner attempted to justify and sustain Ext.P2 order passed by the second respondent and contended that it invites no interference by invoking the power under Section 37 of the Act. Essentially, the contention was that the conditions required to be satisfied for invoking the power under Section 37 of the KGST Act are lacking in this case. Ext.P5 order was passed by the 3rd respondent setting aside Ext.P2 order and restoring Ext.P1 order passed WP(C).No.28827/2009 3 by the first respondent, the Intelligence Officer (I.B.). It is challenging the said order that this writ petition has been filed.
2. I have heard the learned counsel appearing for the petitioner and also the learned Special Government Pleader.
3. In view of the order I propose to pass in this writ petition, I do not think it necessary to delve into the facts or rival contentions in extenso. As already noticed hereinbefore, after the passing of Ext.P2 order by the second respondent the third respondent issued Ext.P3 notice to the petitioner proposing to cancel Ext.P2 order of the first respondent authority and to restore Ext.P1 penalty order of the assessing authority in exercise of the powers conferred under Section 37 of the KGST Act. Ext.P4 objection was admittedly filed by the petitioner. A perusal of Ext.P4 would reveal that the petitioner has raised manifold contentions and to buttress such contentions he has relied on the decisions of this Court in M/s.Bismillah Trading Co. v. The Intelligence Officer and others ((2000) 8 KTR 264 (Ker)), S.Unnikrishnan v. State of Kerala ((2000) 8 KTR 531) and KKS Khader Moideen v. State of Kerala ((2003) 130 STC 61). Ext.P5 WP(C).No.28827/2009 4 order would not reflect consideration of such contentions raised by the petitioner relying on the aforesaid decisions. The core contention of the petitioner is that in order to invoke the powers of suo motu revision under Section 37 of the KGST Act the order sought to be so reviewed must not only be an erroneous one but should be one `prejudicial to the interest of the revenue.' In fact, it is for substantiating such contention that the petitioner relied on those decisions. The contention of the petitioner is that in the light of those decisions the action on the part of the third respondent in interfering with Ext.P2 is not sustainable. I do not think that this Court should consider those aspects at this stage as evidently Ext.P5 would not disclose consideration of those legal contentions raised by the petitioner relying on those decisions referred above. When legal contentions are raised and in support of such contentions authoritative judicial pronouncements have been relied on, the authority is bound to look into that aspect. Failure to advert to such contentions supported by precedents would definitely compel this Court to arrive at the conclusion that the order was passed with a closed mind. In other words, there is total non-application of mind. When once it is so found Ext.P5 is liable to be set aside.
WP(C).No.28827/2009 5
4. In the result, without making any observation as to the merits of the contentions raised by the petitioner, Ext.P5 is set aside. The third respondent shall consider the contentions raised in Ext.P4 relying on the decisions referred above and pass fresh orders on the proceedings initiated by him as per Ext.P3. Such orders shall be passed expeditiously, in accordance with law, at any rate, within a period of three months from the date of receipt of a copy of this judgment.
The writ petition is disposed of accordingly.
Sd/-
C.T.RAVIKUMAR Judge TKS