M/S Saj Batteries Private Limited v. State of Kerala and Others

# IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU WEDNESDAY,THE 27TH DAY OF FEBRUARY 2019 / 8TH PHALGUNA, 1940 WP(C).No. 4760 of 2019 ## PETITIONER/S: M/S.SAJ BATTERIES PRIVATE LIMITED 18/1490, KALLUTHANKADAVU, PUTHIYARA P.O. CALICUT - 673 004, REPRESENTED BY ITS MANAGER AND AUTHORIZED PERSON, JIJO.V.CHERIAN, S/O.V.J.CHERIAN, AGED 38 YEARS, RESIDING AT VELLACKALLIL, PERUNNA P.O., CHANGANASSERY KOTTAYAM DISTRICT. BY ADVS. SRI.MANU RAMACHANDRAN SRI.M.KIRANLAL SRI.R.RAJESH (VARKALA) SRI.T.S.SARATH ## RESPONDENT/S: - 1 THE STATE OF KERALA,REPRESENTED BY SECRETARY TO GOVERNMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM - 695 001. - 2 THE COMMERCIAL TAX COMMISSIONER COMMERCIAL TAX OFFICE THIRUVANANTHAPURAM - 695 001. - 3 THE DISTRICT COLLECTOR COLLECTORATE, KOZHIKKODE - 673 001. - 4 THE DEPUTY TAHSILDAR (RR) OFFICE OF TAHSILDAR FOR REVENUE RECOVERY KOZHIKKODE - 673 001. - 5 THE VILLAGE OFFICER, KASABA VILLAGE OFFICE KASABA, KOZHIKODE - 673 004. - 6 THE SUB INSPECTOR OF POLICE KASABA POLICE STATION KOZHIKODE DISTRICT-673001. WP(C).No. 4760 of 2019 2 ADDL R7 THE COMMERCIAL TAX OFFICER 3 RD CIRCLE,KOZHIKODE 673001 ADDL R8 THARUNKUMAR P, AGED 48 YEARS S/O CHANDRAN, GAYATHRI, PATTELATHU PARAMBU, POKKUNNU P O, PATTELATHUTHAZHAM VALAYANADU AMSOM, KOZHIKODE 673007 ADDL R7 AND R8 IMPLEADED AS PER ORDER DATED 19/2/2019 IN IA 1/19 SRI. C.E.UNNIKRISHNAN, SPL.GP THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 27.02.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 4760 of 2019 3 ## **JUDGMENT** The petitioner, a private limited company, manufactures Lead Acid Batteries. For the assessment years 2008-2009 and 2010-2011 it faced adverse assessment proceedings. By then, its Managing Director had been terminally ill and bedridden. Therefore, he authorised the 8[th] respondent, a sales tax practitioner, to represent the company before the authorities. Based on the 8[th] respondent's representation and the documents from a suspect source, the assessing authority rendered the Exts.P3 and P4 assessment orders. Later, the matter was taken through higher echelons of statutory appeal and, eventually, judicial review before this Court. In fact the petitioner approached this Court twice earlier: W.P.(C)No.2112/2015 and W.P.(C)No.3372/2016. 2. Based on the complaint the petitioner filed and the Government directive, the jurisdictional police investigated the crime against the Sales Tax Practitioner and filed the Ext.P12 charge sheet for the alleged offences under Sections 420, 409, 465 and 471 of IPC in Crime No.88/2015 of Kasaba Police Station, Kozhikode. WP(C).No. 4760 of 2019 4 3. Now faced with the revenue recovery proceedings, the petitioner has filed this Writ Petition. 4. Going by the charge sheet, which may not be a substantial piece of evidence, the allegations are disturbing, and foul play finds mentioned, _prima facie_ though. 5. I reckon after the death of the erstwhile Managing Director, his wife and daughter remain on the Board of the Company. Based on the charge sheet or final report, the petitioner insists that the authorities must revisit the matter and render fresh findings after providing an opportunity of hearing to the petitioner company, besides allowing it to file on record additional materials. 6. In response to the submissions made by the petitioner's counsel, the Government Pleader has initially contended that by the time the authorities rendered the Exts.P3 and P4 and even when the appellate authority considered the appeals, the petitioner company could not produce any material. According to him, the order did not suffer from any legal infirmity. 7. On the other hand, the petitioner's counsel in reply submits that the then Managing Director, by then, was terminally ill WP(C).No. 4760 of 2019 5 and had no occasion to defend the proceedings effectively. Unfortunately, the company's own representative, the 8[th] respondent, played fraud, fabricated documents, and invited adverse orders with an ulterior motive. Though the 8[th] respondent has been brought on record at the Court's directive, I do not propose to put the 8[th] respondent on notice because the Writ Petition is being disposed of at the threshold without any adverse findings against the 8[th] respondent. 8. The singular contention the petitioner's counsel has advanced is that fraud vitiates even solemn judicial acts. According to him, the source of the documents, apart from their authenticity, is suspicious. As of now, only the wife and the daughter remain at the helm of the affairs of the company. Initially, they had no means to know about the fraud the company had been subjected to. Given the massive material the police have unearthed if the petitioner company is given an opportunity, it would establish before the assessing authority conclusively that the company is not liable to pay any tax. To support his contentions, the learned counsel has relied on _S.P. Chengalvaraya Naidu v. Jagannath and Others_[1] and _A.V.Papayya_ > 1 1994(1) SCC 1 WP(C).No. 4760 of 2019 6 ## . _Sastry v. Government of Andhra Pradesh_[2] 9. The learned Special Government Pleader has strenuously contended in tune with the counter affidavit that the orders did not suffer from any legal infirmity. 10. I reckon, _prima facie_ , the Ext.P12 final report reveals an element of fraud. More particularly, the Company's erstwhile Managing Director died without having any effective opportunity of defending the company in the assessment proceedings, with a cloud of criminality cast on the 8[th] respondent, especially based on the _prima facie_ material available in Ext.P12, I reckon it is unsafe to let the petitioner company suffer an order mired in controversy and doubt. 11. That said, I clarify the Ext.P12 final report is only a piece of evidence which needs to be gone into by a competent judicial forum before the guilt of the alleged misdeeds attributed to the 8[th] respondent could be established. As far as the assessment proceedings are concerned, the allegation centres on the documents the assessing authority has relied. The petitioner company maintains that they have been fabricated and there is _prima facie_ proof to that 2 (2007) SCC 221 WP(C).No. 4760 of 2019 7 effect. 12. Under these circumstances, I refrain from adverting to the merits of the matter. Nor do I propose to hold anything adverse against the 8[th] respondent. I leave every issue open: both before the assessing authority and before the criminal court where the Ext.P12 final report seems to have already been filed. As a result, I set aside the Exts.P3, P4 and P13 and remand the matter to the 7[th] respondent for fresh adjudication. While adjudicating the matter, the 7[th] respondent will put the petitioner and the 8[th] respondent on notice, allow either party to file additional material and then adjudicate in accordance with law. **Sd/DAMA SESHADRI NAIDU JUDGE** sd WP(C).No. 4760 of 2019 8 ## APPENDIX PETITIONER'S/S EXHIBITS: - EXHIBIT P1 THE TRUE COPY OF THE RESOLUTION DATED 01/02/2019 PASSED BY THE DIRECTOR BOARD OF THE PETITIONER COMPANY. - EXHIBIT P2 THE TRUE COPY OF THE ENTREPRENEURS' MEMORANDUM FOR SETTING-UP MICRO, SMALL OR MEDIUM ENTERPRISE RE-REGISTERED WITH DISTRICT INDUSTRIES CENTRE, KOZHIKODE. - EXHIBIT P3 THE TRUE COPY OF THE ASSESSMENT ORDERS PASSED BY THE ASSESSING OFFICER FOR THE PERIOD 2008-2009. - EXHIBIT P4 THE TRUE COPY OF THE ASSESSMENT ORDERS PASSED BY THE ASSESSING OFFICER FOR THE PERIOD 2010-2011. - EXHIBIT P5 THE TRUE COPY RTI APPLICATION DATED 10/04/2015 AND REPLY THEREON DATED 04/05/2015. - EXHIBIT P6 THE TRUE COPY RTI APPLICATION DATED 19/05/2015 AND REPLY THEREON DATED 02/06/2015. - EXHIBIT P7 THE TRUE COPY OF THE JUDGMENT DATED 06/07/2015 OF THIS HON'BLE COURT IN W.P.(C) NO.2112/2015. - EXHIBIT P8 THE TRUE COPY OF THE GO(RT) NO.877/2015/TD DATED 04/12/2015. - EXHIBIT P9 THE TRUE COPY OF THE G.O(RT) NO.484/2017/TAXES DATED 20/06/2017. - EXHIBIT P10 THE TRUE COPY OF THE G.O.(RT) 81/2018/TAXES DATED 06/02/2018. - EXHIBIT P11 THE TRUE COPY OF THE REPRESENTATION LASTLY FILED BY THE PETITIONER THROUGH ITS MANAGING DIRECTOR BEFORE THE GOVERNMENT ON 04/11/2017. - EXHIBIT P12 THE TRUE COPY OF THE FINAL REPORT FILED BY THE 6TH RESPONDENT IN CRIME NO.88/2015 OF KASABA POLICE STATION, KOZHIKODE DISTRICT WHICH IS NOW PENDING AS C.C.NO.344/2018 ON THE FILES OF JFMC-IV, KOZHIKODE. - EXHIBIT P13 THE TRUE COPY OF THE NOTICE HAVING NUMBER C14557/2014 DATED 01/11/2018 ISSUED BY 4TH RESPONDENT. sd