VIDYUT METALIC LIMITED Vs. INTELLIGENCE OFFICER

JUDGEMENT

(1.) THE petitioner has approached this court for stay against recovery proceedings for recovery of arrears of penalty levied on the petitioner under section 29 -A of the Kerala General Sales Tax Act, 1963. It is seen that penalty is sustained in two rounds of appeal and Tribunal order, namely exhibit P -9, is stated to be subject -matter of revision before the division Bench. Of course it is open to the petitioner to move for stay before the division Bench if there is a case for him. However the petitioner's contention is that the goods were released on the transporter furnishing bank guarantee for the security amount demanded. According to the petitioner, bank guarantee was released even after penalty was levied though not on the transporter but on the petitioner. It may be an unwise act on the part of the sales tax authorities to have released bank guarantee which was furnished, to secure penalty levied under section 29 -A. Since penalty is sustained in the name of the petitioner, penalty is recoverable from the petitioner and the petitioner is not entitled to any stay against recovery proceedings merely because the department before collection of penalty released the bank guarantee furnished towards security. If the petitioner has a case that he suffered loss on account of the release of bank guarantee by the department to the transporter, it is for the petitioner to file a suit against the department or transporter, as the case may be, or against both. There is no scope for interference by this court in recovery proceedings for recovery of penalty levied on the petitioner and sustained in two levels. However, this is a case which requires enquiry by the department of Commercial Taxes because the department has released bank guarantee furnished towards security for release of goods. In the normal course when penalty was levied bank guarantee should have been furnished and it was for transporter and the petitioner to settle the liability between them. The Commissioner is directed to conduct enquiry and take appropriate action, if necessary, against the person who released the bank guarantee without any proper security being furnished by the petitioner, who was proceeded against for penalty. The writ petition is disposed of as above.