The petitioner has approached this Court challenging the correctness and sustainability of Ext.P1 notice dated 21.10.2014 issued by the first respondent/Intelligence Officer under Section 67(1) of the KVAT Act proposing to impose penalty upon the petitioner.
2. The petitioner has filed a reply affidavit as well as borne by Ext.P3 produced along with I.A.No.16619 of 2014. The learned Counsel for the petitioner points out that the proceedings sought to be pursued by the respondents is per se wrong and illegal in all respects. According to the petitioner, the sale was effected only to a customer situated in the Special Economic Zone, that too, based on Form 43, by virtue of which, such purchaser was entitled to satisfy additional tax as well and there is no obligation for the petitioner to collect any tax. This being the position, no penalty could have been imposed upon the petitioner, submits the learned Counsel for the petitioner.
3. The learned Government Pleader appearing for the respondents submits that the idea and understanding of the petitioner is thoroughly wrong and misconceived. The factual position is disclosed from Ext.P1 notice itself. Form 43 or Section 6(7)(b ) does not come to the rescue of the petitioner in so far as the commodity supplied by the petitioner to the purchaser situated in the Special Economic Zone was nothing other than 'Gloves'. As per Section 6(7)(b) of the Act, sale of any building material, industrial inputs, plant and machinery including components, spares, tools and consumables in relation thereto any developer or industrial unit, or establishments situated in any Special Economic Zone in the State for setting up the unit or use in the manufacture of other goods shall, subject to such conditions or restrictions as may be prescribed be exempted from tax. This being the position, the commodity sold and described in Form 43 does not come within the purview of Section 6(7)(b) of the KVAT Act and hence the claim for exemption is only to be rejected, submits the learned Government Pleader .
4. The position is sought to be rebutted by the learned Counsel for the petitioner as well.
5. After hearing both the sides, this Court does not find it necessary to deal with the merits of the case. Ext.P1 issued by the first respondent/Intelligence Officer is only a 'notice', as to the proposal to impose penalty. The petitioner has putforth his version vide Ext.P3. It is for the first respondent to consider the merit involved, in accordance with the relevant provisions of law and finalise the said proceedings.
Accordingly, there will be a direction to the first respondent /Intelligence Officer to consider Ext.P3 objection filed by the petitioner in response to Ext.P1 and P1(a) and pass appropriate orders, after affording an opportunity of hearing to the petitioner, which shall be done at the earliest, at any rate, within six weeks from the date of receipt of a copy of the judgment. The petitioner shall produce a copy of the judgment along with a copy of the writ petition before the concerned respondent for further steps.
P.R.RAMACHANDRA MENON JUDGE lk