SHIHABUDEEN V. THE COMMERCIAL TAX OFFICER

WP(C)/24848/2016

AI Insights

The case involves T.M. Shihabudeen, the proprietor of M/s. Sevans Jewel Collections, who filed a writ petition challenging the conditional stay order imposed by the appellate authority regarding a tax assessment under the KVAT Act, 2003. The petitioner contested the assessment and the subsequent penalty, arguing that the appellate authority did not adequately consider his issues. The court reviewed the appellate authority's decision, which was based on an inspection by the intelligence wing of the department, leading to the discovery of incriminating records and subsequent penalties for suppression and discrepancies in tax records.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 732873 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 27-07-2016
• Assessment Year: misc
• Laws Referred To: KVAT Act, 2003
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: R RANJITH
• Assessee Lawyers: A KRISHNAN
• Keywords: Appeal; Assessment Order; Conditional stay; Demand notice; Penalty; Intelligence wing; Suppression quantified
• Section: 25(1); 6(2); 67(1)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE WEDNESDAY, THE 27TH DAY OF JULY 2016/5TH SRAVANA, 1938 WP(C).No. 24848 of 2016 (E) ---------------------------- PETITIONER(S): ------------------------ T.M. SHIHABUDEEN, PROPRIETOR, M/S. SEVENS JEWEL COLLECTIONS, VADUTHALA JETTY, AROOKUTTY, ALAPPUZHA DISTRICT. BY ADV. SRI.A.KRISHNAN. RESPONDENT(S): -------------------------- 1. THE COMMERCIAL TAX OFFICER, OFFICE OF THE AGRICULTURAL INCOME TAX & COMMERCIAL TAX OFFICER, KUTHIATHODE, ALAPPUZHA DISTRICT- 688 533. 2. DEPUTY COMMISSIONER (APPEALS) II, COMMERCIAL TAXES, BAPPUJI NAGAR, ASRAMAM, KOLLAM- 691 002. 3. STATE OF KERALA, REPRESENTED BY SECRETARY , COMMERCIAL TAXES, THIRUVANANTHAPURAM - 695 001. BY GOVT. PLEADER SRI.R. RANJITH. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 27-07-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs. WP(C).No. 24848 of 2016 (E) APPENDIX PETITIONER'S EXHIBITS:- EXHIBIT P1 TRUE COPY OF ASSESSMENT ORDER DATED 28-03-2016 PASSED BY THE 1ST RESPONDENT. EXHIBIT P1(A) TRUE COPY OF DEMAND NOTICE DATED 28-03-2016. EXHIBIT P2 TRUE COPY OF THE APPEAL DATED 26-06-2016 FILED BEFORE THE 2ND RESPONDENT. EXHIBIT P2(A) TRUE COPY OF THE STA Y PETITION FILED BEFORE 2ND RESPONDENT, DATED 26-06-2016. EXHIBIT P3 TRUE COPY OF THE STA Y ORDER DATED 29-06-2016 PASSED BY 2ND RESPONDENT. RESPONDENT'S EXHIBITS:- NIL. //TRUE COPY// P.S. TO JUDGE rs. A.M. SHAFFIQUE, J. ------------------------------------- W.P.(C) No. 24848 of 2016 -------------------------------------- Dated this the 27th day of July, 2016 JUDGMENT This writ petition has been filed challenging Ext.P3 by which stay of demand made has been granted on condition of the petitioner remitting 40% of the balance tax and interest within one month and furnishing security for the balance amount to the satisfaction of the assessing authority. 2. The main contention urged by the petitioner is that the appellate authority had not considered the issue raised by the petitioner. Perusal of Ext.P3 order would show that the appellate authority had after narrating the various contentions urged by the petitioner considered the matter in the following manner: “I have considered the arguments in details. The assessing authority in this case has proceeded against the appellant under Section 25(1) of the KVAT Act, 2003 on the basis of a crime file forwarded from the intelligence wing of the department. The place of W.P.(C) No. 24848 of 2016 -2- business was inspected by the intelligence wing of the department on 1.03.2011 and during the course of inspection the inspecting team recovered some incriminating records from the business place. The records were verified with reference to the books of accounts and the suppression quantified at Rs.16782186/-. The Intelligence officer also found some other discrepancies and the same was quantified and penalty was imposed upon the appellant under section 67(1) of the KVAT Act, 2003. The crime file was then verified by the assessing authority with reference the annual records. The assessing authority in order to determine the turnover by added purchase turnover under section 6(2) of the KVAT Act, 2003. The learned representative appearing on behalf of the appellant contented that the place of business of the appellant is situated in a remote place and by no stretch of imagination it cannot be inferred that the appellant transacted huge volume as fixed by the assessing authority. It is further contended that the assessing authority has proceeded against the appellant on the basis of crime file generated by the Intelligence wing of the department. The appeal against the penalty was pending before the Hon'ble STAT. On an examination of the above contention it is seen that the assessing authority has no other way except to proceed against the appellant under section 25(1) of the KVAT Act, W.P.(C) No. 24848 of 2016 -3- 2003. Even though the crime file is pending for disposal before the Hon'ble Tribunal that itself is not a ground to object the proceedings impugned. The genuineness and propriety of the assessment can be ascertained only at the time of final hearing. Till then a conditional stay will meet the ends of justice.” 3. Perusal of the aforesaid portion of the interim order would show that the appellate authority had considered the matter with due application of mind. It is taking into consideration the contentions urged by the petitioner as well as the manner in which the assessment proceedings had been taken that the interim order had been passed. I do not find any reason to sit in judgment over the above said finding at this stage of proceedings and interfere with the conditional order of stay. Accordingly, this writ petition is dismissed. Sd/- A.M. SHAFFIQUE JUDGE Scl/27.07.2016 "