St. Mary''s Hotels (P.) Ltd. vs Commercial Tax Officer (Works Contract and Luxury Tax) and Others

P.R. Ramachandra Menon, J.—The petitioner has challenged exhibit P2 series assessment orders in respect of the assessment years 2005-06, 2006-07 and 2007-08, passed by the first respondent, by approaching the second respondent/appellate authority preferring exhibits P3 to P5 appeals. The petitioner is stated as constrained to approach this court by virtue of the coercive proceedings taken in the meanwhile, as borne by exhibits P6, P6(a), P7 and P7(a) and also being aggrieved of the condition imposed as per exhibit P8 interim order passed by the appellate authority directing to deposit a portion of the disputed liability so as to avail of the benefit of interim stay. The learned counsel for the petitioner submits that, the course and proceedings pursued by the concerned authorities are per se wrong and illegal, as the only basis for having passed the assessment orders are the proceedings of the intelligence wing. The penalty ordered by the intelligence officer was subjected to challenge by filing appeal before the very same appellate authority, i.e., the second respondent, who considered the facts and figures and passed exhibit P1 order dated June 30, 2012, whereby the impugned order was set aside and the matter was remanded for fresh consideration. This crucial aspect was never considered by the second respondent, when the interim order was passed as per exhibit P8, casually imposing a condition upon the petitioner, which hence is sought to be intercepted in this writ petition.

The learned Senior Government Pleader appearing for the respondents submits that, this not at all a fit case where the discretionary jurisdiction of this court is warranted to be invoked, as the condition imposed by the appellate authority is only to an extent of five per cent of the disputed figure.

The learned counsel for the petitioner however submits that, the petitioner is more aggrieved of the way in which the proceedings have been finalised, rather than the quantum. Having set aside the order imposing penalty, by the second respondent, as early as on June 30, 2012, the position brought to the notice of the said respondent ought to have been given some weight while passing exhibit P8, instead of arbitrarily directing the petitioner to satisfy the condition, submits the learned counsel.

It is relevant to refer to the observation made by the second respondent in exhibit P1 appellate order, whereby the impugned order of penalty was set aside and the matter was remanded. It reads as follows:

But the learned advocate appearing for the appellant convinced that the issued copies are not legible and not compared with the original seized records. As discussed above it is evident that the intelligence officer had not returned the seized records to the appellant as prescribed in the provisions of law and denied the opportunity for verification of such records. Hence it is evident that the intelligence officer has arrived the above-mentioned suppressed turnover without conducting proper verification of the books of accounts and the connected records with the return filed for the assessment years 2005-06 to 2007-08 and also failed to allow reasonable opportunity to the appellant in order to substantiate his contention. For the reasons stated above and considering the facts and circumstances of the case I am of the view that the imposition of such penalties are not justified. In order to meet the ends of justice, the matter requires reconsideration by the Intelligence Officer, Squad No. 1, Kottayam. I, therefore, set aside the aforesaid penalty orders and remit the matter to the intelligence officer for fresh disposal according to law after affording reasonable opportunity to the appellant. The intelligence officer shall issue legible certified copies of the entire seized records to the appellant according to law, within 30 days from the date of receipt of this order. The intelligence officer is directed to complete the fresh order after verification of the entire books of accounts and connected records with the seized records and the assessment records for the years 2005-06 to 2007-08. Order accordingly.

Coming to the assessment orders impugned in the appeals, it is very much evident that the only basis for fixing the liability is with reference to the figures referred to by the intelligence wing. True, the penalty proceedings and the assessment proceedings are two different lines/streams. But since no other ground is discernible from exhibit P2 for fixing the liability, than the alleged suppression discovered by the intelligence wing this court finds considerable force in the submission made by the learned counsel for the petitioner and holds it appropriate to have the appeals preferred by the petitioner considered and disposed of within a reasonable time.

In the above circumstances, the second respondent is directed to consider and pass final orders on exhibits P3 to P5 appeals, on merits, in accordance with law, at the earliest at any rate within two months from the date of receipt of a copy of this judgment. Coercive proceedings pursuant to exhibits P6 and P7 series shall be kept in abeyance till such time, subject to the condition that the petitioner executes and furnishes a security bond before the first respondent with regard to the liability sought to disputed.

The petitioner shall produce a copy of this judgment along with a copy of the writ petition before the second respondent for further steps. Writ petition is allowed. No cost.