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2014 Supreme(Online)(KER) 48104
HIGH COURT OF KERALA
P.R.RAMACHANDRA MENON, J
M/S OASIS DISTILLERIES LTD – Appellant
Versus
ASSISTANT COMMISSIONER (ASSMT), THRISSUR – Respondent
WRIT PETITION (CIVIL) 29968/2014
Penalties must be proportional to the violation, particularly when the delay is minor.
Headnote:
Penalty - Distillery - KGST Rules - Rule 21(7) - The court found the condition imposed by the Appellate Authority to be overly burdensome given the admitted delay in tax payment, resulting in a reduced interim stay requirement.
Fact of the Case:
The petitioner, a distillery, faced a penalty for not filing a tax return and remitting taxes on time. An appeal against this penalty was pending, and a stay was sought from the court due to an onerous condition imposed by the Appellate Authority.
Finding of the Court:
The court determined that the Appellate Authority did not adequately consider the petitioner's arguments regarding the penalty and modified the condition for interim stay to a lesser amount, recognizing the minor nature of the delay.
Issues: Whether the penalty imposed and the conditions for interim stay were appropriate given the circumstances of the case.
Ratio Decidendi: The court held that penalties must be proportionate to the violation and that a minor delay does not warrant excessive punishment.
Final Decision: The court ordered the petitioner to pay Rs.10,000 for interim stay, allowing the appeal to be processed.
JUDGMENT
The petitioner, a distillery under the name and style 'M/s.Oasis Distilleries Ltd.”, was mulcted with penalty as borne by Ext.P3 order passed by the 1st respondent, demanding to satisfy a sum of Rs.4,91,973/- (Rupees Four lakhs ninety one thousand nine hundred and seventy three only). The reason for imposing penalty is that, return was not filed and 90% of the tax due for the month of March, 2014 was not remitted before the end of the said month, to be in conformity with Rule 21(7) of the KGST Rules. According to the petitioner, it was only an inadvertent omission. The petitioner effected satisfaction of the tax as in the case of the other months, on 12.04.2014, filing the returns. The said delay was taken as a tool by the 1st respondent to impose huge penalty as borne by Ext.P3 order. This in turn has been taken up in appeal vide Ext.P4, which is pending consideration before the 2nd respondent.
2. After considering the Interlocutory Application for stay, the Appellate Authority passed a mechanical order as borne by Ext.P6, imposing condition to satisfy an extent of 30% of the liability, so as to avail the benefit of interim stay during pendency of the appeal. This made the petitioner to approach this Court by filing this writ petition.
3. Heard the learned Government Pleader as well, who submits on instructions and also with reference to the materials of record that the payment of tax was not effected in accordance with the relevant Rules on time and hence the impugned order.
4. After hearing both the sides, this Court finds that the Appellate Authority, while passing Ext.P6 order, has not properly applied the mind with regard to the nature of contentions raised by the petitioner and the extent of penalty, if at all any that could be imposed in view of the admitted guilt, ie. the delay in effecting the payment by 12 days. This of course is a matter to be considered in appeal and this Court does not intend to express any opinion in this regard, but for holding that the condition imposed as per Ext.P6 order is rather onerous. In view of the admitted delay, this Court directs the petitioner to satisfy Rs.10,000/- (Rupees Ten thousand only), upon which, the petitioner will continue to enjoy the benefit of interim stay during pendency of the appeal. The appeal shall be considered and finalised in accordance with law, at the earliest. It is made clear that, this Court has not expressed anything with regard to the merits of the case on either side.
The petitioner shall produce a copy of this judgment, along with a copy of the writ petition, before the second respondent.
The writ petition is disposed of.
P.R. RAMACHANDRA MENON, JUDGE sp
