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Judgment
1. This Original Petition is filed in the year 1999 to declare that Section 13(3) of the Kerala Tax on Entry of Goods into Local Areas Act, 1994, to the extent of the requirement of remittance of the entire tax or penalty by the assessee as a pre-condition for the appellate authority to entertain the appeal, as illegal, arbitrary and discriminatory, to set aside Ext.P16 Order of penalty or, in the alternative, to set aside Exts.P21 and P22 Orders rejecting the Appeals filed by the Petitioner for want of compliance of the pre-deposit under Section 13(3), and to direct the Respondent No.2 to dispose of the said Appeals without any pre-deposit.
2. This Court had allowed the Writ Petition as per Judgment dated 27.05.2014 setting aside Ext.P16 Order relying on the Division Bench Judgment of this Court in Thressiamma L. Chirayil v. State of Kerala [2007 (1) KLT 303] holding that the demand and collection of entry tax under the Kerala Tax on Entry of Goods into Local Areas Act, 1994, is illegal, unauthorised and violative of Article 301 of the Constitution of India. The matter went up to the Supreme Court and in view of the decision of the Supreme Court in Jindal Stainless Limited and Another v. State of Haryana and Others [(2017) 12 SCC 1] upholding the levy of tax on entry of goods into local areas by the State enactments, the matter was remanded for consideration of the question of the legality of paying the penalty in terms of Section 13(3) of the Kerala Tax on Entry of Goods into Local Areas Act, 1994.
3. I heard the learned Counsel for the Petitioner and the learned Government Pleader for the Respondents.
4. The learned Counsel for the Petitioner submitted that the Petitioner had imported only soluble glass during the relevant accounting year. The same was not taxable. The learned Counsel invited my attention to Ext.P1 Finance Bill, in which the item included in the Schedule of the Kerala Tax on Entry of Goods into Local Areas Act, 1994, is only sodium silicate, which is different from soluble glass. As per Ext.P2 Notification also, the rate of tax is fixed only for sodium silicate and not soluble glass. But, in Ext.P3 Finance Act, soluble glass is also included. The Petitioner had submitted Exts.P4 to P7 when it imported sodium silicate for the months from April, 1997 to July, 1997. But when the Petitioner imported soluble glass, the Petitioner did not submit return since soluble glass was not taxable. The learned Counsel further contended that Ext.P16 impugned Order is passed by the Intelligence Officer and not by the Assessing Authority. As per Section 15 of the Kerala Tax on Entry of Goods into Local Areas Act, the Assessing Authority alone has the power to impose penalty and not the Intelligence Officer. The learned Counsel further contended that at any rate, the Appellate Authority ought to have considered Appeals filed against Ext.P16 Order without insisting on pre-deposit as mandated under Section 13(3) of the Kerala Tax on Entry of Goods into Local Areas Act. The learned Counsel prayed before this Court to consider the challenge against the Ext.P16 Order in this Original Petition, as this Original Petition has been pending before this Court for the last more than 25 years.
5. On the other hand, the learned Government Pleader advanced her arguments with reference to the contentions raised in the Counter Affidavit filed by the Respondents. The learned Government Pleader contended that the Respondent No.1 passed Ext.P16 Order under Section 15 of the Kerala Tax on Entry of Goods into Local Areas Act when it was found that the Petitioner had failed to pay tax for the item imported by it during the relevant time. The Petitioner was aware that the item imported by it is taxable, as revealed from Exts.P4 to P7 returns for the period from April, 1997 to July, 1997. There is no difference between soluble glass and sodium silicate. The item included as Serial No.12 in the Schedule to the Kerala Tax on Entry of Goods into Local Areas Act, 1994, includes all forms of sodium silicate, whether it is called soluble glass, water glass, sodium glass, or by any other name. It is the provision in the Finance Act which is to be considered to understand the provision. When the Act is passed, there could not be any reference to the provision in the Bill on the basis of which the Act is passed. It is well settled by the Division Bench decision of this Court in Key Foods v. State of Kerala [2003 SCC OnLine Ker 544] that the Intelligence Officer will also come under the Assessing Authority under the Kerala Tax on Entry of Goods into Local Areas Act to impose the penalty.
6. I have considered the rival contentions.
7. Ext.P16 is an appealable order under Section 13 of the Kerala Tax on Entry of Goods into Local Areas Act. The Petitioner had filed Appeals before the Appellate Authority. But the same were rejected as per Exts.P21 & P22 Orders on the ground that the Petitioner did not satisfy the condition of pre-deposit required under Section 13(3) of the Kerala Tax on Entry of Goods into Local Areas Act. This Court had earlier set aside Ext.P16 Order by Judgment dated 27.05.2014 relying on the Division Bench Judgment of this Court in Thressiamma L. Chirayil (supra) declaring that the demand and collection of the entry tax as per the Kerala Tax on Entry of Goods into Local Areas Act is illegal, unauthorized and violative of Article 301 of the Constitution of India. Though the said Judgment was confirmed in Writ Appeal No.1989/2014, the Hon’ble Supreme Court remanded the matter back for consideration of the question of the liability of the assessee to pay the penalty in terms of Section 13(3) of the Kerala Tax on Entry of Goods into Local Areas Act, relying on the Judgment of the Hon’ble Supreme Court in Jindal Stainless Limited (supra) upholding the levying of entry tax. This Original Petition has been remaining in this Court for the last more than 25 years. Hence, this Court deems it fit to consider the challenge against Ext.P16 on merits in this Original Petition rather than relegating the Petitioner to the appellate remedy.
8. The contention of the learned Counsel for the Petitioner is that the entry of soluble glass is not there in Ext.P1 Finance Bill for the year 1997. The entry included is only sodium silicate and not soluble glass. Hence, the rate of tax imposed as per Ext.P2 Notification is applicable only to sodium silicate and not to soluble glass. Admittedly, the entry included in the Ext.P3 Finance Act specifically refers to soluble glass. It is clear from the said entry that soluble glass is one of the forms of sodium silicate. Entry 12 included in the Schedule to the Kerala Tax on Entry of Goods into Local Areas Act says sodium silicate (Na Si O4) in all its forms, whether called soluble glass, water glass, sodium glass, or by any other name. Hence, it is clear that the entry of sodium silicate included in Exts.P1 & P2 includes soluble glass also. The confusion in Ext.P1 Bill is clarified when the Act is enacted as per Ext.P3. As rightly contended by the learned Government Pleader, it is the entry which is stated in the Act that is relevant and not the Bill which led to the passing of the Act. There may be several changes to the provisions of the Bill when the Act is enacted. Since soluble glass is another form of sodium silicate and since soluble glass is specifically included in Ext.P3 Enactment, the contention of the learned Counsel for the Petitioner that soluble glass was not taxable during the relevant time is unsustainable.
9. The further contention of the learned Counsel for the Petitioner is that the Respondent No.1/Intelligence Officer is not competent to pass Ext.P16 Order as he is not the Assessing Authority referred to in Section 15 of the Kerala Tax on Entry of Goods into Local Areas Act. The said point is covered against the Petitioner as per the Division Bench decision of this Court in Key Foods (supra) cited by the learned Government Pleader. It is specifically held that the Intelligence Officer will also come under the Assessing Authority to impose penalty under the Kerala Tax on Entry of Goods into Local Areas Act. Hence, I find that the contentions raised against Ext.P16 Order are unsustainable and the Original Petition is liable to be dismissed.
10. Accordingly, the Original Petition is dismissed.