M/S Bombay Colony Welfare Association (Regd.) v. Intelligence Officer (IB), Commercial Taxes, Palakkad & Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR** **TUESDAY, THE 30TH DAY OF MAY 2017/9TH JYAISHTA, 1939** **WP(C).No. 17944 of 2017 (P) ----------------------------** **PETITIONER(S):** **-------------** **1. M/S.BOMBAY COLONY WELFARE ASSOCIATION (REGD.) NO. CA 61/2011, CHAKKALAKUNDU, PALAPPURA, OTTAPPALAM -679 103, PALAKKAD DISTRICT, REPRESENTED ITS PRESIDENT SHRI. K.RAVINDRAN.** **2. SHRI. P.C. HARIHARAN,** **S/O. LATE CHAMI, AGED 66 YEARS, PLOT NO. 2, SHREELAXMI, BOMBAY COLONY, PALAPPURAM, OTTAPPALAM, PALAKKAD - 679 103.** **BY ADVS.SRI.T.M.SREEDHARAN (SR.) SRI.V.P.NARAYANAN SMT.DIVYA RAVINDRAN** **RESPONDENT(S):** - **--------------** **1. THE INTELLIGENCE OFFICER (IB), COMMERCIAL TAXES, PALAKKAD - 678 001.** **2. THE INSPECTING ASSISTANT COMMISSIONER (IB) COMMERCIAL TAXES, PALAKKAD -678 001.** **3. THE INTELLIGENCE OFFICER,** - **SQUAD NO. IV, DEPARTMENT OF COMMERCIAL TAXES, PALAKKAD - 678 001.** **4. THE COMMERCIAL TAX OFFICER (WC), DEPARTMENT OF COMMERCIAL TAXES, PALAKKAD - 678 001.** **5. THE COMMERCIAL TAX OFFICER, DEPARTMENT OF COMMERCIAL TAXES, OTTAPPALAM - 678 001.** **BY GOVERNMENT PLEADER SRI.SHAMSUDHEEN** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 30-05-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **msv/** ## **WP(C).No. 17944 of 2017 (P)** ## **----------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS -----------------------** - **EXHIBIT P1 TRUE COPY OF CERTIFICATE OF REGISTRATION NO. CA 61/11 OF 2011 DATED 16.11.2011 ISSUED BY THE DISTRICT REGISTRAR, PALAKKAD.** - **EXHIBIT P2 TRUE COPY OF MEMORANDUM OF ASSOCIATION DATED 23.01.2011 OF THE 1ST PETITIONER.** - **EXHIBIT P3 TRUE COPY OF LETTER DATED 05.04.2014 ISSUED BY THE 3RD RESPONDENT.** - **EXHIBIT P4 TRUE COPY OF THE PENALTY NOTICE NO. IB(B) 58/15-16 (11-12) DATED 27.02.2017 ISSUED U/S.67(1)(a)(b) AND (i) OF THE ACT BY THE 1ST RESPONDENT FOR THE ASST. YEAR 2011-12.** **EXHIBIT P4(A) TRUE COPY OF THE PENALTY NOTICE NO. IB(B) 58/ 15-16 (12-13) DATED 27.02.2017 ISSUED U/S.67(1) (a)(b) AND (i) OF THE ACT BY THE 1ST RESPONDENT FOR THE ASST. YEAR 2012-13.** - **EXHIBIT P4(B) TRUE COPY OF THE PENALTY NOTICE NO. IB(B) 58/ 15-16 (13-14) DATED 27.02.2017 ISSUED U/S.67(1) (a)(b) AND (i) OF THE ACT BY THE 1ST RESPONDENT FOR THE ASST. YEAR 2013-14.** - **EXHIBIT P4(C) TRUE COPY OF THE PENALTY NOTICE NO. IB(B) 58/ 15-16 (14-15) DATED 27.02.2017 ISSUED U/S.67(1) (a)(b) AND (i) OF THE ACT BY THE 1ST RESPONDENT FOR THE ASST. YEAR 2014-15.** - **EXHIBIT P5 TRUE COPY OF LETTER DATED 22.04.2017 SUBMITTED BY THE 1ST PETITIONER BEFORE THE 1ST RESPONDENT.** - **EXHIBIT P6 TRUE COPY OF HEARING NOTICE NO. IB(B) 58(A)/2015-16 DATED 10.05.2017 ISSUED BY THE 1ST RESPONDENT.** **RESPONDENT(S)' EXHIBITS:** **------------------------** **NIL** **//TRUE COPY//** **P.S.TO JUDGE** **Msv/** ## **“CR”** ## **A.K.JAYASANKARAN NAMBIAR, J.** - - - - - - - - - - - - - - - - - - - - - - - - - - ## **W.P.(C) No.17944 of 2017(P)** - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 30[th] day of May, 2017 ## **JUDGMENT** The challenge in the writ petition is against Ext.P4 series of penalty notices, that have been served on the petitioners by the 1[st] respondent Intelligence Officer. The learned Senior Counsel appearing for the petitioners would vehemently contend that the notices in question, although styled as show-cause notices, in fact reveal a decision already taken against the petitioners by the adjudicating authority, and therefore, the nomenclature of “notices” is farcical. It is contended that the authority has already made up his mind with regard to the penalty to be imposed on the petitioners and hence, there is no meaning in submitting any reply to the show-cause notices and going for an adjudication before the 1[st] respondent Intelligence Officer. On a perusal of the notices, that are impugned in the writ petition, I find that, the said notices merely refer to certain facts, and arrive at tentative computations with regard to the penalty that is proposed against the petitioners on various charges. The mere tentative quantification of the penalty amounts, made on the assumption that the allegations against the petitioners may ultimately be established, cannot be seen as an instance of the adjudicating authority already having W.P.(c).No.17944 of 2017 : 2 : made up his mind against the petitioners herein. It is relevant to note that the notices conclude with a sentence that suggests that the penalties are only proposed, and the petitioners are asked to submit their reply to the said proposals. It is not in dispute that the petitioners have since submitted Ext.P5 common reply to Ext.P4 series of notices that were served on them, raising, inter alia, contentions with regard to the jurisdiction of the officer to proceed with the penalty proposal, as also aspects relating to quantification of the penalty, that is proposed against the petitioners. Inasmuch as what is impugned in the writ petition are only show-cause notices, and the petitioner has already preferred Ext.P5 reply to the said show cause notices, I am of the view that the said notices need not be interfered with at this stage, in these proceedings under Article 226 of the Constitution of India. I find that, the petitioners are not prejudiced by the mere issuance of the show cause notices and have ample opportunity to establish their case on merits, before the adjudicating authority. I, therefore, dismiss the writ petition in its challenge against Ext.P4 series of notices. 2. The learned Senior Counsel for the petitioners would point out that although a request was made by the petitioners for an adjournment, so as to produce various documents to substantiate their W.P.(c).No.17944 of 2017 : 3 : contentions on merits, the 1[st] respondent has posted the matter for hearing on 31.05.2017. It is the submission of the learned Senior Counsel for the petitioners that the petitioners have not been given ample opportunity to produce documents necessary to substantiate their contentions on merits and, unless an opportunity is granted to them for producing the documents, the adjudication proceedings will work to their prejudice. Taking note of the said submission of the learned Senior Counsel for the petitioners, and finding that the respondents are obliged to give the assessee ample opportunity to produce documents to substantiate their case on merits, I find that the ends of justice would be met by directing the 1[st] respondent to defer the hearing of the cases by one month. Resultantly, the 1[st] respondent shall post the cases for hearing on any day after 30[th] of June and inform the petitioners of the date of posting, so that the petitioners would be in a position to produce documents to substantiate their contentions on merits before the 1[st] respondent, at the time of hearing. The 1[st] respondent shall pass orders in the matter, only after hearing the petitioners in the manner directed in this judgment. 3. Before parting with this case, and taking note of numerous instances where parties have approached this Court invoking the jurisdiction of this Court under Article 226 of the Constitution of W.P.(c).No.17944 of 2017 : 4 : India, against show cause notices and assessment orders that have been issued to them under various Statutes, it might be apposite to observe that, in matters of taxation, it is generally considered inappropriate for this Court to interfere in the exercise of its jurisdiction under Article 226 of the Constitution of India either at the stage of issuance of show cause notice or at the stage of assessment, where an alternate remedy by way of filing a reply or appeal, as the case may be, is available **[See: Union of India v. Hindalco Industries – [(2003) 5 SCC 194]]** . No doubt, the reluctance on the part of this Court to exercise its jurisdiction, in such matters, is the result of a self imposed limitation by the court while exercising its jurisdiction under Article 226 of the Constitution of India, and there are recognised exceptions to the said limitations. In cases where a show cause notice issued by a taxing authority is impugned before this Court, unless this Court is satisfied that the show cause notice is totally non-est, in the eye of law, for absolute want of jurisdiction of the authority to even investigate the facts, writ petitions would not ordinarily be entertained for the mere asking and as a matter of routine. In such cases, the writ petitioner would invariably be directed to respond to the show cause notice, and take all contentions before the adjudicating authority. In this connection, it is also relevant to note that the issue as to whether a show cause notice is W.P.(c).No.17944 of 2017 : 5 : founded, on any legal premise, is itself a jurisdictional issue, which can be urged by the assessee before the adjudicating authority issuing the notice. It is incumbent upon the assessee to urge the jurisdictional issue before the authority issuing the notice and await an adjudication, before approaching this Court challenging an order of the adjudicating authority on the ground of jurisdiction **[See: Special Director and another v. Mohd. Ghulam Ghouse and another – [(2004) 3 SCC 440]]** . 4. As regards the challenge against assessment orders, here too, this Court would not, under normal circumstances, interfere with orders of assessment in exercise of its powers under Article 226 of the Constitution of India, and would ordinarily relegate the assessee to his alternate remedy available under the Statute in question. Recognised exceptions to the aforesaid self imposed limitation by this Court would be cases where the remedy available under the Statute is not effective but a mere formality with no substantial relief, where the Statutory authority has not acted in accordance with the provisions of the enactment in question, where the statutory authority acts in defiance of the fundamental principles of judicial procedure, where the statutory authority resorts to provisions which are repealed or where the statutory authority passes the order in total violation of the W.P.(c).No.17944 of 2017 : 6 : principles of natural justice **[See: Commissioner of Income Tax and Others v. Chhabil Dass Agarwal – [(2014) 1 SCC 603]** . This Court feels that these aspects must be borne in mind by an assessee while taking a decision as to the forum to be approached against a notice/order that has been served on him by a taxing authority. Likewise, the aforesaid principles should also be kept in mind by the statutory authorities concerned, so as to ensure that assessees are not driven to this Court through notices/orders that do not comply with the requirements of law as envisaged under the statutory provisions. The writ petition is disposed as above. Sd/- **A.K.JAYASANKARAN NAMBIAR JUDGE** sm/