O.M.MATHEW v. THE GOVERNMENT OF KERALA

H.L.DATTU, C.J. & A.K.BASHEER, J. ------------------------------------------- W.A.No.2189 of 2008 ------------------------------------------ Dated, this the 10th day of November, 2008JUDGMENTH.L.Dattu, C.J.Being aggrieved by the orders passed by the learned SingleJudge in W.P.(C) No.29607 of 2008 dated 21st October, 2008, the petitionerin the writ petition has presented this writ appeal.(2) In the writ petition filed, the petitioner had primarilyquestioned Ext.P6 order passed by the first appellate authority. By theimpugned order, the first appellate authority had directed the petitioner to pay40% of the penalty imposed by the Intelligence Officer of the Department forthe assessment years 2005-06 and 2006-07. (3) The Intelligence Officer of the Department has imposed apenalty of Rs.1,56,996/- in exercise of his powers under Section 67(1) of theKerala Value Added Tax Act, 2003 ('the Act' for short) for the return periods2005-06 and 2006-07. (4) Aggrieved by the penalty so imposed by the IntelligenceOfficer of the Department, the assessee has filed appeal before the firstappellate authority. Along with the appeal an application for stay was alsofiled. W.A.No.2189 of 2008 2(5) The first appellate authority has disposed of the applicationfor stay by its order dated 24.9.2008 and in that the first appellate authorityhas stated as under:“I have examined the contentions raised by the learnedcounsel and perused the impugned order. The Investigationbranch, Commercial Taxes, Pathanamthitta gathered certainwork details of the appellant and verified the details with thereturns of the appellant and found that the work executed forRs.6,50,000.00 awarded by the Anicadu Service co.op. BankLtd. was not included in the return filed. Hence tax due wasworked out at Rs.60,938.00 by adopting 12.5% rate and doublethe tax was imposed as penalty. The main argument of thelearned counsel is that the rate of tax applicable is 4% only as acompounded dealer and tax due was remitted by the bank but nodocuments produced in support of the contention. Butconsidering the fact that the penalty imposed was double the taxdue fixed at the rate of 12.5%. The following orders are passed.ORDER NO.KVATA 4095 & 4093/08 DATED 24-9-2008Steps for collection of penalty u/s 67(1) of the KVAT Actfor the return periods 2005-06 & 2006-07 are stayed till thedisposal of appeal subject to the condition that the appellant pays40% of the penalty imposed u/s 67(1) of the KVAT Act withintwo weeks from the date of receipt of this order. The appellantshould also furnish adequate security for the balance amount to W.A.No.2189 of 2008 3the satisfaction of the assessing authority. If any of the conditionis not fulfilled stay granted will automatically vacate.”(6) It is the correctness or otherwise of that discretionary orderpassed by the first appellate authority that is called in question by thepetitioner in the writ petition. The learned Single Judge, being of the opinion, that the order passed by the first appellate authority is a speaking order, in thesense the order contains reasons, has thought it fit to reject the writ petition. That is how the petitioner in the writ petition has presented this writ appeal.(7) The order passed by the first appellate authority is adiscretionary order. The said discretionary order passed by the first appellateauthority can be interfered with by this Court only if the order so passed iseither arbitrary, illegal or irregular, or if it does not contain any reasons. (8) In the instant case, the first appellate authority whiledisposing of the application filed by the petitioner for grant of an interimorder, in our opinion, has assigned sufficient reasons and thereafter hasdirected the petitioner to deposit 40% of the penalty imposed by theIntelligence Officer of the Department for the return periods 2005-06 and2006-07. (9) After carefully perusing the order passed by the firstappellate authority, we are of the opinion that the order passed by the firstappellate authority cannot be characterised as either arbitrary or capricious. W.A.No.2189 of 2008 4(10) In that view of the matter, we decline to entertain this writappeal. Accordingly the writ appeal requires to be rejected and it is rejected. Ordered accordingly. (H.L.DATTU) CHIEF JUSTICE (A.K.BASHEER) JUDGE vns