KUNNATH PHARMACEUTICALS Vs. STATE OF KERALA AND ORS.

JUDGEMENT

(1.) The petitioner is a registered dealer under the Kerala Value Added Tax Act, 2003, on the rolls of the 2nd respondent, engaged in the manufacture and sale of ayurvedic products. For the assessment year 2006-07, the 2nd respondent completed assessment under sub-section (1) of S.25 of the Kerala Value Added Tax Act, 2003 (hereinafter referred to as 'the KVAT Act') by Ext. P1 assessment order dated 16/06/2014, assessing the balance tax due at Rs.40,23,402/-. Against Ext. P1 assessment order, the petitioner filed Ext. P2 memorandum of appeal dated 08/01/2015 before the 3rd respondent, who is the First Appellate Authority. Along with Ext. P2 appeal, the petitioner has also filed Ext. P3 stay petition seeking absolute stay of collection of tax and interest assessed in Ext. P1 order.

(2.) Before the 3rd respondent, relying on Ext. P4 judgment of this Court dated 02/07/2013 in WA No. 937 of 2013, the petitioner sought for an absolute stay against collection of the tax and interest assessed in Ext. P1. In Ext. P4 judgment, a Division Bench of this Court observed that, the product of the petitioner, namely, 'Musli Power X'tra' prima facie falls within the entry relating to ayurvedic drugs and granted unconditional stay for the assessment years 2008-09 and 2009-10, pending appeal before the First Appellate Authority. On the issue of demand of differential tax (12.5% instead of 4% declared) the petitioner explained to the 3rd respondent the bifurcation of turnover on issues pertaining to 'Musli Power X'tra' assessed in Ext. P1 order, so as to enable the First Appellate Authority to cull out the same, for granting an absolute stay, in line with Ext. P4 judgment of this Court. Ext. P5 is a statement of computation of turnover and tax due for the assessment year 2006-07.

(3.) But, the First Appellate Authority, without adverting to any of the contentions raised by the petitioner relying on Ext. P4 judgment of this Court, issued Ext. P6 conditional order of stay, on the petitioner remitting 30% of the demand and furnishing adequate security to the satisfaction of the assessing authority for the remaining demand, within a period of three weeks of receipt of the order. It was made clear that, if the conditions stipulated above are not fulfilled, the order of stay will stand vacated automatically. It is aggrieved by the conditions imposed by the First Appellate Authority in Ext. P6 order, the petitioner is before this Court in this Writ Petition seeking a writ of certiorari to quash Ext. P6 order and seeking a declaration that the petitioner is entitled for an absolute stay in the facts and circumstances of the case and in the light of Ext. P4 judgment of this Court.