1994 (5) TMI 243 - HC - VAT and Sales Tax

Summary

Issues Involved:

1. Constitutionality of Section 45A of the Kerala General Sales Tax Act, 1963.
2. Jurisdiction of the Kottayam Officer.
3. Validity of search and seizure.
4. Quantum of penalty.
5. Violation of principles of natural justice.

Summary:

Issue 1: Constitutionality of Section 45A

The petitioner argued that Section 45A is unconstitutional and void as it violates Article 14 of the Constitution. The court, however, upheld the validity of Section 45A, stating that the circumstances under which penalties are imposed under Section 45A(1)(b) and Section 19(2) are different. The court emphasized that the remedies provided under Section 45A are adequate and not discriminatory, thus rejecting the plea of invalidity.

Issue 2: Jurisdiction of the Kottayam Officer

The petitioner questioned the jurisdiction of the Kottayam Officer, who relied on notifications S.R.O. No. 281/79 and S.R.O. No. 316/84 to claim statewide jurisdiction. The court held that these notifications were ultra vires the powers of the Government under Section 3(2) of the Act, which requires officers to operate within local limits. Consequently, the court quashed the impugned orders (Exhibits P11 and P12) due to lack of jurisdiction.

Issue 3: Validity of Search and Seizure

The petitioner challenged the validity of the search and seizure, alleging non-compliance with Section 28 and the Code of Criminal Procedure. The court referred to the decision in Deputy Commissioner of Sales Tax v. Prasad, stating that even if the search and seizure were illegal, the documents obtained could still be used for assessment purposes. Thus, the court did not find merit in this challenge.

Issue 4: Quantum of Penalty

The petitioner argued that the penalty imposed was disproportionate and lacked justification. The court refrained from addressing this issue in detail, noting that the matter was already pending before the Deputy Commissioner under Section 45A(3). The court emphasized the impropriety of dealing with the matter under Article 226 when a statutory remedy was available.

Issue 5: Violation of Principles of Natural Justice

The petitioner claimed a violation of natural justice due to the lack of further opportunity for hearing after an earlier judgment (Exhibit P10). The court found no merit in this claim, stating that the petitioner had been given a fair opportunity to present his case and that the observations in Exhibit P10 did not mandate additional hearings.

Conclusion:

O.P. No. 5084 of 1989 is allowed, quashing Exhibits P11 and P12 due to lack of jurisdiction. The court directed that the recovery of amounts demanded in O.P. No. 8422 of 1990 be kept in abeyance pending the disposal of the appeal, subject to the petitioner maintaining the bank guarantee and security bond. No order as to costs.