Elambilat Agencies vs The State of Kerala and Others

P.R. Ramachandra Menon, J.—The petitioner has approached this Court with the following prayers:

(i) To declare that Rule 32(13B) of the KGST Rules, 1963 to the extent it contemplates a reduction of the tax payable by the trade mark or brand name holder by only such sum as represents the tax paid at the previous point of sale, is ultravires the provisions of the KGST Act, 1963 and hence illegal and unconstitutional;

(ii) To direct the respondents to refrain from including the turnover exempted at the hands of the selling dealer while computing the tax liability of the brand name/trade mark holder who effects the second sale(deemed first sale) of the goods under a brand name or trade mark;

(iii) To direct the second respondent to issue suitable directions to the statutory adjudicating/appellate authorities working under him to refrain from including the turnover exempted at the hands of the selling dealer while computing the tax liability of the brand name/trade mark holder who effects the second sale(deemed first sale) of the goods under a brand name or trade mark, pending disposal of the writ petition;

(iv) To call for the records leading to Ext.P5 order of the fifth respondent appellate tribunal and to quash the same by the issuance of a writ of certiorari or such other writ, order or direction;

(v) To direct the fifth respondent tribunal to consider and pass orders on Ext.P3 appeal as expeditiously as possible without insisting on any deposit of tax amount from the petitioner pending disposal of the appeal.

With regard to the sequence of events, the assessing authority passed Ext.P1 assessment order in respect of the assessment year 2001-02, which, though was subject to challenge by filing appeal before the fourth respondent, did not turn to fruitful as borne by Ext.P2. Met with the situation, the petitioner preferred further appeal before the fifth respondent Tribunal as evident from Ext.P3, along with Ext.P4 petition for stay. After considering the I.A. for stay, the Tribunal passed Ext.P5 order directing the petitioner to satisfy a sum of Rs. 7.5 lakhs and to furnish security for the balance amount so as to avail the benefit of interim stay during the pendency of appeal, which made the petitioner to approach this Court challenging the condition.

When the matter came up for consideration on 21-08-2006, the coercive proceedings were intercepted on condition that the petitioner deposited a sum of Rs. 4 lakhs, which is stated as complied with. The learned Counsel for the petitioner submits that during the pendency of the above writ petition, the appeal preferred before the fifth respondent was finalised confirming Ext.P2 order passed by the appellate authority as well as Ext.P1 order passed by the assessing authority.

It is, however, brought to the notice of this Court that the petitioner has challenged the constitutional validity of Rule 32(13B) of the KGST Rules, 1963 and has sought for other incidental reliefs. In this connection, the learned Counsel for the petitioner further brought it to the notice of this Court that during the pendency of the proceedings as above, the Government, taking note of the situation, issued a notification as per G.O.(P) No. 119/2007/TD dated 10-05-2007 which, by itself, provided necessary reliefs to the case covered by the petitioner and the challenge raised in the writ petition against the Rule has become redundant. However, the said notification was not available on the date of passing the order by the Tribunal and since the writ petition was pending before this Court, the petitioner could not proceed with further steps for getting appropriate reliefs, by filing appropriate proceedings before the Tribunal, based on the above fact.

Heard the learned Counsel for the petitioner as well.

Considering the facts involved in this case, this Court does not propose to go into the merits and the writ petition is disposed of, making it clear that the petitioner is at liberty to pursue appropriate remedy, if any, in accordance with law, by approaching the appropriate forum.