2019 (8) TMI 1228 - HC - VAT and Sales Tax

Maintainability of appeal - statutory remedy of appeal - Imposition of penalty - Section 67 of the Kerala Valued Added Tax Act, 2003 - HELD THAT - The learned Single judge cannot be blamed for not considering the legality or sustainability of the order imposing penalty on its merits. An equitable relief has already been granted by way of directing the Appellate Authority to dispose of the stay petition on an early basis. The recovery was also directed to be deferred for a period of three months, in order to facilitate consideration of the stay petition. Under such circumstances, there exists no illegality, error or impropriety in the impugned judgment, warranting interference in this writ appeal. Appeal dismissed.

Summary

Issues: Challenge to penalty under Section 67 of the Kerala Valued Added Tax Act, 2003, direction for disposal of appeal, consideration of stay petition, legality of penalty order, granting equitable relief, interference in the judgment, liberty to convince appellate authority, reference to a similar judgment.

Analysis:
1. The case involved a challenge to a penalty imposed under Section 67 of the Kerala Valued Added Tax Act, 2003. The appellant filed a statutory appeal against the penalty, seeking direction for the Appellate Authority to hear and pass orders on the appeal. Additionally, a request was made to stay the collection and recovery of the penalty amount pending the appeal's disposal.

2. An interim application (Ext.P7) was filed during the pendency of the writ petition, seeking a stay on recovery proceedings. The learned Single Judge directed the consideration of the stay petition by the Appellate Authority on an expedited basis, with a stay on recovery proceedings for three months to facilitate the Appellate Authority's decision on the stay petition.

3. The judgment of the learned Single Judge was challenged on the grounds that the appeal itself should have been disposed of, considering the merits of the contentions. The appellant argued that the penalty order was unsustainable and without jurisdiction, citing a similar case where such an order was quashed by another Judge.

4. The High Court, after hearing the Government Pleader for the respondents, noted that the appellant had availed the statutory remedy of appeal and had also sought an interim stay on recovery. The Court found no fault with the Single Judge's decision not to delve into the legality or sustainability of the penalty order, as an equitable relief had already been granted by directing the Appellate Authority to consider the stay petition promptly.

5. The High Court dismissed the writ appeal but clarified that the appellant could present the merits of the appeal to the Appellate Authority and request a hearing, referencing the judgment in a similar case. It was expected that the Appellate Authority would consider the prima facie merits of the penalty order while deciding on the appeal or the interim stay application, taking into account the mentioned judgment.

This detailed analysis covers the issues raised in the judgment, the arguments presented, and the Court's reasoning behind dismissing the writ appeal while providing guidance on further actions available to the appellant before the Appellate Authority.