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Judgment
Petitioner is an assessee under the Kerala Value Added Tax Act (the Act) on the rolls of the first respondent. It is stated by the petitioner that it
is a partnership firm and the firm stopped its business during 2012, after intimating the same to the first respondent. It is also stated that by the
petitioner that the partners of the petitioner are at present working abroad. Exts.P1 and P1(a) are orders imposing penalty on the petitioner under
the Act. Exts.P1 and P1(a) orders have been issued ex-parte. Later, based on Exts.P1 and P1(a) penalty orders, assessments of the petitioner for
the years 2011-12 and 2012-13 were also revised in terms of Exts.P3 and P3(a) orders. The petitioner challenged Exts.P1 and P1(a) penalty
orders directly before this Court in a writ petition. This Court did not entertain the said writ petition. Petitioner challenged the decision in the writ
petition in Writ Appeal No.340/2017. The said writ appeal was allowed in terms of Ext.P2 judgment directing the competent authority to pass
fresh orders on the proposal for imposing penalty, after affording the petitioner an opportunity of hearing on terms. It is stated by the petitioner that
thereafter in respect of one year, proceedings initiated against the petitioner for imposing penalty has been completed accepting the application
preferred by the petitioner for compounding. As regards the remaining year, the proceedings are stated to be pending. The challenge in this petition
is against Exts.P3 and P3(a) orders revising the assessment for the relevant years. According to the petitioner, in the light of Ext.P2 judgment, the
petitioner is entitled to a similar treatment. The petitioner, therefore, seeks appropriate directions in this regard in the writ petition.
Heard the learned counsel for the petitioner as also the learned Government Pleader.
Paragraphs 4 and 5 of Ext.P2 judgment read thus :
4.Still, the fact remains that according to the appellant the firm has ceased to have any business and as per the pleadings that the partners are also
residing abroad. Therefore, we are not persuaded to think that this is a case there was deliberate refusal on the part of the partners to either accept
the notice from the postal authorities or to respond to the notice. We cannot also ignore the fact that by the issuance of Exts.P1 and P1(a) orders,
substantial liability is fastened on the partners.
In such circumstances, on equitable considerations, we are inclined to think that the petitioner should be given an opportunity so that they can
place their records before the second respondent and contest the matter on merits. However, the same shall be only on terms.
Accordingly, we dispose of this writ appeal with the following directions:
(i) the judgment under appeal and Exts. P1 and P1(a) will stand set aside
(ii) Appellant will treat Exs.P1 and P1(a) orders as notices issued under Section 67 of the KVAT Act, file its reply along with the documents
substantiating its contentions, within three weeks from today.
(iii) Once the reply to the notices are filed as above, appellant will appear before the second respondent for personal hearing at 11 a.m. On
22.3.2017. Thereupon or any day immediately thereafter, the second respondent shall afford an opportunity of hearing to the appellant and pass
fresh orders in the matter.
(iv) This shall, however, be subject to the appellant remitting Rs.50,000/- to the Kerala Mediation Centre within ten days from today and on
producing memo thereof before the Registry of this Court.
(v) In case, the appellant does not comply with any of the aforesaid directions, this judgment will stand automatically recalled.
In view of the stand aforesaid taken by the Division Bench, I deem it appropriate to dispose of this writ petition also in tune with Ext.P2 judgment.
In the result, the writ petition is allowed. Exts.P3 and P3 (a) orders are quashed and the assessing authority is directed to pass fresh orders after
affording the petitioner an opportunity of hearing. The petitioner shall treat Exts.P3 and P3 (a) orders as notices and shall appear before the
assessing authority for further proceedings on 15.02.2018. The assessing authority shall complete the proceedings referred to above, within a
month thereafter.