MRF Limited v. State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** ## **THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON** ## **MONDAY, THE 1ST DAY OF APRIL 2013/11TH CHAITHRA 1935** ## **WP(C).No. 8985 of 2013 (W)** **------------------------------------** **PETITIONER:** ## **-------------------** **MRF LIMITED, P.B. NO. 2, VADAVATHOOR P.O., KOTTAYAM - 686 010 REPRESENTED BY ITS PLANT- HEAD, MR. SAJI VARGHESE.** **BY ADVS.SRI.A.K.JAYASANKARAN NAMBIAR (SR.) SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.GOPINATH MENON SRI.P.BENNY THOMAS SRI.K.JOHN MATHAI SRI.KURYAN THOMAS** **RESPONDENTS:** **-----------------------** ## **1. STATE OF KERALA** **REPRESENTED BY ITS SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM - 695 001.** **2. DEPUTY COMMISSIONER (APPEALS) COMMERCIAL TAXES, COMMERCIAL TAX COMPLEX, PERUMANOOR P.O, KOCHI - 682 015.** **3. THE INTELLIGENCE OFFICER, SQUAD NO.1, COMMERCIAL TAXES, KOTTAYAM - 686 001.** **BY SENIOR GOVERNMENT PLEADER SRI.S.SUDHEESH KUMAR** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 01-04-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **MJL** ## **WP(C).No. 8985 of 2013 (W)** **--------------------------------------** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **-------------------------------------** - **EXHIBIT-P1: TRUE COPY OF THE NOTICE DATED 15/06/2009 ISSUED TO THE PETITIONER BY THE 3RD RESPONDENT.** - **EXHIBIT-P2: TRUE COPY OF THE NOTICE DATED 11/03/2010 ISSUED TO THE PETITIONER BY THE 3RD RESPONDENT.** - **EXHIBIT-P3: TRUE COPY OF THE REPLY DATED 19/04/2010 FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT.** - **EXHIBIT-P4: TRUE COPY OF LETTER DATED 22/12/2011 FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT.** - **EXHIBIT-P5: TRUE COPY OF THE LETTER DATED 25/10/2012 FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT.** - **EXHIBIT-P6: TRUE COPY OF THE ORDER NO. ISK-I CR 35/09-10 (07-08) DATED 04/03/2013 ISSUED TO THE PETITIONER BY THE 3RD RESPONDENT.** - **EXHIBIT-P7: TRUE COPY OF THE ORDER NO. ISK-I CR 36/09-10 (08-09) DATED 04/03/2013 ISSUED TO THE PETITIONER BY THE 3RD RESPONDENT.** - **EXHIBIT-P8: TRUE COPY OF THE ORDER NO. ISK -I CR 37/09-10 (09-10) DATED 04/03/2013 ISSUED TO THE PETITIONER BY THE 3RD RESPONDENT.** - **EXHIBIT-P9: TRUE COPY OF THE APPEAL (WITHOUT ANNEXURES) DATED 25/03/2013 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT CHALLENGING EXHIBIT-P6 ORDER.** - **EXHIBIT-P10: TRUE COPY OF THE APPEAL (WITHOUT ANNEXURES) DATED 25/03/2013 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT CHALLENGING EXHIBIT-P7 ORDER.** - **EXHIBIT-P11: TRUE COPY OF THE APPEAL (WITHOUT ANNEXURES) DATED 25/03/2013 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT CHALLENGING EXHIBIT-P8 ORDER.** - **EXHIBIT-P12: TRUE COPY OF THE STAY APPLICATION DATED 25/03/2013 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT ALONG WITH EXHIBIT-P9 APPEAL.** - **EXHIBIT-P13: TRUE COPY OF THE STAY APPLICATION DATED 25/03/2013 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT ALONG WITH EXHIBIT-P10 APPEAL.** - **EXHIBIT-P14: TRUE COPY OF THE STAY APPLICATION DATED 25/03/2013 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT ALONG WITH EXHIBIT-P11 APPEAL.** **MJL** **WP(C).No. 8985 of 2013 (W)** **--------------------------------------** **EXHIBIT-P15: TRUE COPY OF THE COMMON ORDER DATED 25/03/2013 PASSED BY THE 2ND RESPONDENT IN KVAT NOS. 994, 995 AND 996 OF 2013.** ## **RESPONDENTS' EXHIBITS: NIL** ## **/TRUE COPY/** ## **P A TO JUDGE** **MJL** ## **P.R. RAMACHANDRA MENON, J.** ...................................................... ## **W.P.(C). No. 8985 of 2013** ....................................................... **Dated this the 1[st] day of April, 2013** ## **JUDGMENT** Ext.P15 order passed by the 2[nd] respondent directing the petitioner to satisfy 50% of penalty imposed under Section 67(1) of the KVAT Act, so as to avail the benefit of interim stay during the pendency of the appeal is the subject matter of challenge. 2. The sequence of events as narrated in the writ petition shows that the petitioner was served with P2 notice dated 11.03.2010 proposing to impose the penalty; in response to which the petitioner submitted Ext.P3 reply. It is contended that the petitioner sought for some particulars and filed Exts.P4 and P5; which however were not properly considered. Later, Exts.P6 to P8 orders were passed by the 3[rd] respondent on 04.03.2013, imposing a huge penalty upon the shoulders of the petitioner. 3. Being aggrieved of the above orders, the petitioner has approached the appellate authority by way of Exts.P9 to P11 appeals along with Exts.P12 to P14 petitions for stay. After considering the I.A. for stay, Ext.P15 order came to be passed on W.P.C. No. 8985 of 2013 -2- 25.03.2013 directing to satisfy 50% of the amount demanded in Exts.P6 to P8 on or before 30.03.2013, which in turn is under challenge in this writ petition. 4. The learned counsel for the petitioner submits that the impugned orders have been challenged on many a ground, primarily for the reason that the petitioner was not given effective and adequate opportunity to cross examine the witnesses concerned, despite the filing of Exts. P4 and P5. It is stated that the impugned orders have been passed much after 'three years' and it is hit by the 'proviso' to Section 67(1); being barred by limitation. 5. The learned Government Pleader submits with reference to the materials on record that, the idea and understanding of the petitioner is per se wrong and misconceived. It is stated that, the relevant date so as to attract the 'proviso' dealing with limitation shall be reckoned with reference to the date of detection of the offence and not the date of inspection of the relevant records. Reliance is sought to be placed on the decision rendered by this Court in **St. Mary's Hotels (P) LTD. v. Intelligence Officer, Squad No.1, Kottayam & Others ((2011) 19 KTR 317)** . The learned Government Pleader further W.P.C. No. 8985 of 2013 -3- points out that the petitioner was given notice and after considering the reply, opportunity of personal hearing was given on 22.12.2011 and this being the position, a finding could have been arrived at on the basis of relevant facts and figures only on a subsequent date. In the said circumstance, it can never be said that the proceedings are barred by limitation, so as to attract the proviso to Section 67(1) of the KVAT Act. Learned Government Pleader also submits that the petitioner never wanted to examine any person as their witness; nor did they produce any document so as to substantiate their claim, but for submitting Exts.P4 and P5 for permission to cross examine of the concerned persons listed therein. 6. The facts and circumstances leading to Ext.P6 have been discussed in detail in the said order. There is no case for the petitioner that the C-Forms submitted by the petitioner were genuine ones. The attempt of the petitioner appears to contend that, even if the C-Forms were of bogus in nature, they were given to the petitioner by the concerned purchasing dealers and if at all any act has been pursued by them conducting sale within the State without subjecting the commodity for interstate sale, the fault or lapse cannot be shifted to the shoulders of the W.P.C. No. 8985 of 2013 -4- petitioner. It is also pointed out that the case projected by the petitioner before the appellate authority has not been properly analysed while passing Ext.P15, but for the observation therein that, the sustainability of the contention can be examined in detail only after verification of the connected records and documents at the time of final hearing of the appeals. 7. The learned Government Pleader however submits that, the nature of contentions as put forth by the petitioner/appellant and the stand of the revenue has already been discussed by the appellate authority, as revealed from Ext.P15 itself. The issuance of bogus C-Forms is also not of serious dispute, but for the question as to who is actually liable. By virtue of the fact that the bogus C-Forms were submitted by the petitioner, seeking for the benefit of the same, the petitioner cannot escape from the liability, submits the learned Government Pleader. It is also stated with reference to the law declared by the Supreme Court in **Ravi Gupta v. Commissioner of Sales Tax, Delhi 22 VST 529 (SC)** that imposition of the appropriate condition cannot be of any uniform application and that, the discretion exercised by the appellate authority vide Ext.P15 directing the petitioner to satisfy 50% of the due amount is not liable to be assailed under W.P.C. No. 8985 of 2013 -5- any circumstance. 8. After hearing both the sides, this Court prima faice finds that there is considerable force in the submission made by the learned Government Pleader. The amount which is actually covered by the bogus C-Forms is not seen separately quantified. After considering the nature of the case put forth by the petitioner and in view of the extent of liability imposed, this Court finds it fit and proper to modify the condition. Accordingly, the liability to satisfy 50% of the disputed amount stands reduced to 1/3[rd] and the petitioner shall furnish adequate security to the satisfaction of the authorities concerned for the balance amount. This shall be done within 'ten days'; subject to which, the petitioner will continue to have the benefit of interim stay granted by the appellate authority, which shall be subject to the result of the appeal pending before the 2[nd] respondent. All the contentions raised by the parties are left open. Writ petition is disposed of. ## **P.R. RAMACHANDRA MENON, JUDGE.** Kp/-