MOULANA HOSPITAL Vs. THE INTELLIGENCE OFFICER

JUDGEMENT

(1.) The petitioner is a hospital registered under the Kerala Value Added Tax Act, 2003. It had leased out a shop, in a shopping complex attached to the hospital, to the 2nd respondent for running a hotel and the hospital canteen. The arrangement between the petitioner and the 2nd respondent was basically in the nature of a lease of premises for specified purposes and the petitioner was receiving rent from the 2nd respondent pursuant to the said arrangement. By Ext. P5 notice dated 15.10.2008, the petitioner was informed by the 1st respondent of a proposal for imposition of penalty for the assessment years 2005-2006 to 2008-2009 based on an inspection that was allegedly carried out at the canteen premises on 01.07.2008. The notice indicated that the proceedings were taken in terms of Section 67 of the Kerala Value Added Tax Act, and that the proceedings were taken against both the petitioner and the 2nd respondent on a protective basis as contemplated in Section 26 of the Kerala Value Added Tax Act. On receipt of the notice, the petitioner made enquiries with the respondents and obtained a copy of the shop inspection report which is produced as Ext. P6. Thereafter, the petitioner preferred a detailed reply to the notice received by him. The said reply produced as Ext. P7. Thereafter, by Ext. P8 order of the 1st respondent, a penalty was imposed jointly on the petitioner and the 2nd respondent. Ext. P8 order, to the extent it makes the petitioner liable jointly with the 2nd respondent for the penalty amounts thereunder, is impugned in the writ petition.

(2.) A counter affidavit has been filed on behalf of the 1st respondent wherein the sequence of events leading to the issuance of the notice and the passing of the order by the 1st respondent are narrated. It is pointed out that the 2nd respondent had taken out registration under the Kerala Value Added Tax Act, only with effect from 01.04.2008, and therefore, the petitioner could not avoid the liability to tax for the period from 01.04.2005 to 31.03.2008. It is also pointed out that the petitioner had given the canteen to a contractor who was an agent of the petitioner and it was in that capacity that the petitioner was sought to be proceeded against for the defaults committed by the 2nd respondent.

(3.) I have heard Sri. S. Anil Kumar, the learned counsel for the petitioner as also the learned Government Pleader appearing on behalf of the respondents.