Royal Blue Hotels Pvt. Ltd. v. State of Kerala and The Director, Vigilance and Anti-Corruption Bureau

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** # **`PRESENT`** ``` THE HONOURABLE MR.JUSTICE K. BABU ``` ``` WEDNESDAY, THE 9[TH] DAY OF NOVEMBER 2022 / 18TH KARTHIKA, 1944 ``` ## **`WP(CRL.) NO. 977 OF 2022`** ## **`PETITIONER:`** ``` ROYAL BLUE HOTELS PVT. LTD., HOTEL LAKE PALACE, II/175(1), THONIKADAVU, KADINAMKULAM, PUTHUKURICHY, THIRUVANANTHAPURAM REPRESENTED BY ITS DIRECTOR PRATHEESH KUMAR.S ``` ``` BY ADVS. SUMAN CHAKRAVARTHY K.R.RIJA ``` ## **`RESPONDENTS:`** ``` 1STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM - 682 031. ``` ``` 2THE DIRECTOR, VIGILANCE AND ANTI CORRUPTION BUREAU, VIKAS BHAVAN.P.O., THIRUVANANTHAPURAM - 695 033. ``` ``` BY ADV. SRI.RAJESH A(SPL G.P,VIG) ``` ``` THIS WRIT PETITION (CRIMINAL) HAVING COME UP FOR ADMISSION ON 09.11.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` W.P.(Crl) No.977 of 2022 ``` ``` 2 ``` # **K.BABU, J.** ------------------------------------------- ## W.P.(Crl.) No.977 of 2022 --------------------------------------------- Dated this the 9[th] day of November, 2022 # **JUDGMENT** The prayers in this Writ Petition (Criminal) filed under Article 226 of the Constitution of India are as follows:- “(i) A wit of mandamus or appropriate writ order or direction directing the 2[nd] respondent to conduct investigation by registering FIR or conduct preliminary enquiry, upon the allegations contained in Ext.P2 complaint preferred by the petitioner within a time frame to be prescribed by this Hon’ble Court. (ii) To issue such other reliefs that this Hon’ble Court may deem fit and proper considering the nature and circumstances of this case. (iii) To dispense with the filing of English translation of the vernacular documents produced along with the Writ Petition. 2. The petitioner is engaged in hotel business and he is a live dealer for the purpose of KGST Act and Rules. 3. The crux of the averments in the Writ Petition relates to demand of bribe by one Sri.Sabu Kumar, former Deputy Commissioner of State Goods and Services Tax Department, Special Circle, Thiruvananthapuram. The relevant averments in the Writ Petition are extracted below: “2. For the assessment year 2015-16 and 2016-17, for Hotel Lake Palace, the petitioner was assessed with ``` W.P.(Crl) No.977 of 2022 ``` ``` 3 ``` gross profit at the rate of 175% as against the conceded gross profit of 52%. This assessment was done by Asst. Commissioner, Special Circle, Thiruvananthapuram of the State Goods and Service Tax Department. The officer who passed the said assessment and made demand on 29.10.2019 was Sabu Kumar S. The petitioner challenged the said demand before the Joint Commissioner (Appeals) II U/s 17(3) of the KGST Act. The appeal was allowed by re-assessing the gross profit @120% and thereby modifying the assessment order. The assessment for the subsequent years i.e., 20182019 and 2019-2020 was done by Sajith P.S. who took charge of the office from Sabu Kumar since Sabu Kumar S. was transferred out from Thiruvananthapuram Special Circle to the Officer of the Deputy Commissioner, Special Circle Kasaragod by proceedings dated 21.04.2022. 3. When notices for the assessment year 2018-2019 and 2019-2020 was received by the petitioner for Hotel Lake Palace, it was found that there is mention with regard to an enquiry conducted by Sabu Kumar on 07.04.2022 at Hotel Lake Palace. However, to the best of the knowledge of the petitioner no such enquiry was conducted on 07.04.2022. It was also revealed that as per the said enquiry report according to Sabu Kumar a gross profit @ 350% is proposed to be given in the preassessement notices for the years 2018-2019 and 20192020. The petitioner has sought for the said report of Sabu Kumar under the Right to Information Act and was served with the same. A true copy of the report dated 07.04.2022 received under RTI Act is produced herewith and marked as Exhibit P1. 4. In fact on 07.04.2022 Sabu Kumar and four others came to Hotel Lake Palace and demanded a room for consuming alcohol and food. The petitioner provided the demanded room, liquor and food to Sabu Kumar and others. As per the records maintained at the hotel a total amount of Rs.5,680/- cost for food and Rs.2,170/was the amount involved for the liquor consumed. Sabu Kumar demanded that the said amount should be accounted as complementary. Further Sabu Kumar demanded an amount of Rs.25 Lakhs for completing the assessment for the years 2018-2019 and 2019-2020. The petitioner refused to pay the said demand for the reason that the petitioner has been paying all required government statutory payments correctly, the previous year assessment also shows that the petitioner was paying tax and other dues promptly and for the purpose of KGST Act gross profit was assessed only @ 120% ``` W.P.(Crl) No.977 of 2022 ``` ``` 4 ``` finally. Sabu Kumar left the premises with displeasure and the matter was intimated to the higher authorities also. 5. As submitted earlier Sabu Kumar who was transferred out was succeeded in office by Sajith P.S. who issued notices under Sec.17(3) of the KGST Act assessing gross profit @ 350% relying on the false report of Sabu Kumar dated 07.04.2022. The petitioner tried to convince the officer that no such enquiry as stated by Sabu Kumar was held on 07.04.2022 and that even according to the very same officer for the previous years the gross profit was only @150%, even though the same was reduced by the appellate authority subsequently to @120%. Hence by no stretch of imagination there can be a whopping increase of GP@350%. All relevant records and bill was produced before the officer. However, the officer was adamant and sticked on to the report of Sabu Kumar dated 07.04.2022. In the circumstances, the petitioner gave a written complaint before the Hon’ble Chief Minister of Kerala, Sales Tax Commissioner as well as the 2[nd] respondent herein for appropriate legal action against the erring officer. The complaint was accompanied by supporting documents. A true copy of the complaint dated 29.09.2022 along with the hotel bills and the postal receipt is produced herewith and marked as Exhibit P2.” 4. The grievance of the petitioner is that though Ext.P2 complaint was forwarded to the Director of VACB (R2) no action has been taken. 5. The Deputy Superintendent of Police-1, VACB,Central Range, Ernakulam, submitted a report through the Special Government Pleader (Vigilance). The report reads thus : “1. It was directed to make available necessary instructions in the matter related to W.P.(Crl.) 977/2022 filed by Royal Blue Hotels Pvt. Ltd. before the Hon’ble High Court of Kerala. The Director, Vigilance and Anti-Corruption Bureau, Thiruvananthapuram is the ``` W.P.(Crl) No.977 of 2022 ``` ``` 5 ``` 2[nd] respondent in the petition and the petitioner seeking an order directing the respondent 2 to conduct investigation by registering FIR or conduct preliminary enquiry upon the allegations contained in Exhibit P2 complaint preferred by the petitioner within a time frame. 2. In this regard, it is reported that the copy of the petition dated 29.09.2022 addressed to the Hon’ble Chief Minister of Kerala received from Royal Blue Hotels Pvt. Ltd. has been forwarded to Vigilance Department in Government by the Director, Vigilance and AntiCorruption Bureau, Thiruvananthapuram for appropriate action as per Lr.No.CPSP-4(A)-37388/2022/DVACB dated 20.10.2022. The complaint is related to the Yearly Assessments of their hotels and demand of money by the Deputy Commissioner of Sales Tax, Thiruvananthapuram, Sri.Sabu and others etc. facts.” 6. The learned counsel for the petitioner submitted that respondent No.2 is reluctant to proceed further in view of the bar contained in Section 17(A) of the Prevention of Corruption Act, 1988. Section 17(A) of the Act reads thus” ## “ **17A. Enquiry or Inquiry or investigation of offences relatable to recommendations made or decision taken by public servant in discharge of official functions or duties.-** No police officer shall conduct any enquiry or inquiry or investigation into any offence alleged to have been committed by a public servant under this Act, where the alleged ofence is relatable to any recommendation made or decision taken by such public servant in discharge of his ofcial functions or duties, without the previous approval- (a) in the case of a person who is or was employed, at the time when the offence was alleged to have been committed, in connection with the affairs of the Union, of that Government; (b) in the case of a person who is or was employed, at the time when the offence was alleged to have been committed, in connection with the affairs of a State, of that Government; ``` W.P.(Crl) No.977 of 2022 ``` ``` 6 ``` (c) in the case of any other person, of the authority competent to remove him from his office, at the time when the offence was alleged to have been committed: Provided that no such approval shall be necessary for cases involving arrest of a person on the spot on the charge of accepting or attempting to accept any undue advantage for himself or for any other person: Provided further that the concerned authority shall convey its decision under this Section within a period of three months, which may, for reasons to be recorded in writing by such authority, be extended by a further period of one month.” (Emphasis added) 7. The offences alleged are in no way relatable to any recommendation made or decision taken by the Public Servant involved in discharge of his official functions or duties. In such a situation, the question of prior approval as provided in Section 17A does not arise. This view is fortified by the decision of this Court in **Shankara Bhat and Others v. State of Kerala and Others [2021 (5) KHC 248]** and **Venugopal V. and Others v. State of Kerala and Another [2021 KHC 565]** 8. Ext.P2 complaint discloses cognizable offences. Therefore, respondent No.2 is directed to conduct a preliminary enquiry based on the allegations contained in Ext.P2 complaint and proceed further as per law. 9. The petitioner is at liberty to produce any material relating to the allegations levelled in the complaint before the ``` W.P.(Crl) No.977 of 2022 ``` ``` 7 ``` Enquiry Officer. The enquiry as directed above shall be completed within a period of one month from the date of production of a certified copy of this judgment. The Writ Petition (Criminal) is disposed of accordingly. Sd/- ``` K.BABU JUDGE ``` VPK ``` W.P.(Crl) No.977 of 2022 ``` ``` 8 ``` ## **`APPENDIX OF WP(CRL.) 977/2022`** ``` PETITIONER EXHIBITS ``` ``` Exhibit P1A TRUE COPY OF THE REPORT DATED 07.04.2022 RECEIVED UNDER RTI ACT. ``` ``` Exhibit P2A TRUE COPY OF THE COMPLAINT DATED 29.09.22 ALONG WITH THE HOTEL BILLS AND THE POSTAL RECEIPT. ``` ``` Exhibit P3A TRUE COPY OF THE REPRESENTATION ADDRESSED TO THE TAXES SECRETARY, KERALA GOVERNMENT DATED 14.10.2022. ```