The petitioner has approached this Court challenging the condition imposed by the Appellate Authority vide Ext.P7, directing the petitioner to satisfy 30% of the penalty imposed upon the petitioner, so as to avail the benefit of interim stay during pendency of the proceedings.
2. The case of the petitioner is that, the penalty was proposed to be inflicted upon the petitioner for the first time only as per notice dated 30.09.2011. Much before that the petitioner had sought to revise the return by submitting necessary application on 14.02.2011 and as such, the order is not correct or sustainable.
3. The learned counsel for the petitioner points out that, the original return was submitted by the petitioner on 25.03.2010 as borne by Ext.P1, followed by Profit and Loss Account and Audit Report, submitted on 05.02.2011. But later, the 1st respondent, allegedly on the basis of some incriminating circumstances, issued notice to impose penalty upon the petitioner on 30.09.2011 as aforesaid and in spite of the objection preferred by the petitioner, the proceedings were finalised mulcting huge penalty as per Ext.P3 order dated 31.12.2013. The observation is that, petitioner had virtually suppressed a turn over of nearly Rs.51,00,000/- (Rupees Fifty one lakhs only). Being aggrieved of the same, the petitioner filed an appeal and in view of the coercive proceedings, approached this Court by filing WP(C) No.7539 of 2014, which was disposed of as per Ext.P5 judgment, whereby the 2nd respondent is directed to consider the Interlocutory Application for stay. It was pursuant to this verdict, that Ext.P7 order came to be passed as mentioned herein before. The learned counsel also submits that the factum of filing the application for submitting the revised return as early as on 14.02.2011 has been noted by the Assessing Authority in Ext.P8 assessment order.
4. The version of the petitioner is sought to be rebutted by the learned Government Pleader, referring to the observations on the very next page of Ext.P8, which read as follows:
“The Intelligence Officer, (IB), Kottayam collected extracts of sale made to the dealer by the sellers (details of purchase “build from others”) from KVATIS and cross verified the same with reference to the monthly returns and the statements of purchases filed by the dealer electronically and found that the purchase turnover to the tune of Rs.3,07,745.94 in respect of 4% items and Rs.48,20,954.20 in respect of 12.5% items was suppressed by him in the returns and purchase lists filed along with the returns, electronically. So he had issued notice in Form 17 dated 09.11.2010 to the dealer on 18.11.2010 directing him to produce the books of accounts for the years 2009-2010. Adjournment for one month was sought by the dealer due to the reason that his accountant was engaged with the marriage of his daughter. Adjournment was granted and the case was posted to 30.11.2010.
Meanwhile, the Intelligence Officer vide e mail dated 20.01.2011 informed the undersigned the following.
Sir, Sub:- KVAT Act 2003-Sri. Sadasivan Pillai, Ottattu Hardwares, Kidangoor P.O., Pirayar- Requisition not to accept revised return, additional statements and resultant payments-Enquiry initiated-Year 2009-10-Reg.
Read:- Section 79B of the KVAT.
It is hereby brought to your notice that this office has undertaken an investigation regarding the business transactions done by the dealer (Sri.Sadasivan Pillai, Ottattu Hardwares, Kidangoor P.O., Pirayar) during the year 2009-10. It is requested that revised returns, statements or payments may not be accepted from the dealer without informing this office so that the proceeding initiated by this office are rendered infructuous.”
5. The learned Government Pleader points out that the offence was detected much earlier and notice was issued to the petitioner in respect of the suppression on 18.11.2010, directing the petitioner to produce Books of Accounts for the year 2009-
2010. The petitioner sought for one month's time for the reasons stated therein. Reliance is also sought to be placed on Section 79B of the KVAT Act, 2003, which stipulates that, where a case of tax evasion has been detected and proceedings have been initiated against such evasion, the dealer shall not be permitted to revise the return in respect of the return period covered by the proceedings.
6. After hearing both the sides, this Court finds that, this is not a fit case to grant the relief sought for by the petitioner. More so, when the discretion has been exercised by the Appellate Authority apparently in a judicious manner. However, there is a further case of the petitioner that the claim in respect of the 'input tax credit' has not been considered. This however is a fact which is to be established before the Appellate Authority in the pending proceedings. Taking note of the extent of liability now mulcted upon the petitioner, the condition imposed as per Ext.P7 directing the petitioner to satisfy 30% of the disputed liability will stand reduced to '20%'. The petitioner is granted further period of 'two weeks' to satisfy the condition as aforesaid.
7. If the petitioner intends to challenge Ext.P8 assessment order, it is open for the petitioner to file appropriate proceedings. If any such proceedings and any Interlocutory Application for stay, are filed within 'two weeks' from the date of receipt of a copy of this judgment, the Appellate Authority shall consider and pass appropriate orders in the I.A., in accordance with law, at the earliest, at any rate within 'one month' thereafter. Coercive proceedings shall be kept in abeyance till such time.
The writ petition is disposed of.
The petitioner shall produce a copy of this judgment, along with a copy of the writ petition, before the concerned respondent, for further steps.
P.R. RAMACHANDRA MENON, JUDGE sp