MC DOWELL AND CO LTD Vs. ASST COMMISSIONER

JUDGEMENT

(1.) The petitioner is a company registered under the Indian Companies Act. It is engaged in the business of manufacture and sale of Indian made Foreign liquor. It is an assessee on the files of the Ist respondent The Assistant Commissioner of Agricultural Income Tax & Sales Tax (Assessment), Special Circle, Alleppey. The petitioner was assessed under the Kerala General Sales Tax Act and the Central Sales Tax Act for the years 1976-77 to 1979-80. It was also assessed under the Central Sales Tax Act for the year 1975-76. There are in all 9 assessments for these years. They are evidenced by Exts. P13 to P21 orders. According to the petitioner, these assessments were made arbitrarily and without affording sufficient opportunity to the petitioner to substantiate its case. The notice calling for verification of accounts was issued on 16-4-1984. There were subsequent notices to similar effect on 3-5-1984, 3-8-1984 and 8-10-1984. Finally Ext. P1 pre-assessment notice dated 25-1-1985 was received by the petitioner on 2-2-1985. The petitioner was given 7 days time to file its objections. The petitioner made an attempt to get extension, of time by Ext. P2. By Ext. P3 order dated 6-2-1985 it was rejected. So, the petitioner filed, objections dated 8-2-1985, on 11-2-1985. Since 9th February, 1985 was a 2nd Saturday and a declared holiday and 10th was a Sunday, the objections could be filed only on 11-2-1985.Assessment orders dated 9-2-1985, evidenced by Exts. P13 to P21, were served on the petitioner on 16-2-1985. The petitioner filed appeals against all the nine assessment orders before the Deputy Commissioner of Agricultural Income Tax & Sales Tax (Appeals), Quilon-2nd respondent herein-on 28-2-1985. Petitions for stay of recovery proceedings were also filed. Since the matter was urgent, the petitioner moved a petition for early hearing of the stay petitions. The petitioner was heard on 7-3-1985 and Ext. P6 order dated 11-3-1985 was passed in all the petitions by the 2nd respondent. By the said order, the petitioner was directed to pay 50 per cent of the balance amount and surcharge that remained payable under the orders and to furnish adequate security for the balance 50 per cent of the amount within seven days from the date of receipt of the order. In the meanwhile, by Exts. P7, P8 and P9 garnishee proceedings were set in motion by the assessing authority. As could be seen from Exts.P10 and P11, revenue recovery proceedings were set in motion for recovering a sum of Rs. 32,81, 623.97( ) and Rs. 6,44,65,410.08. In para 27 of the O. P., the petitioner has stated that the total amount now demanded is Rs. 9,75,70,119.60. (Rs. 9 crores and odd). The assessing authority also initiated proceedings under S.23(2) of the Kerala General Sales Tax Act against the petitioner before the Sub Divisional Magistrate, Alleppey (Ext P12). In this Original Petition, the main grievance of the petitioner are two fold. (1) The assessment orders (Exts.P13 to P21) dated 9-2-1985 were passed in undue haste, without proper notice and without affording sufficient opportunity to the petitioner. It is contended that the said orders are violative of the principles of natural justice and so void and illegal. On that hypothesis, the petitioner further contends that the recovery proceedings in pursuance to such orders are equally bad in law and infirm. (2) Regard being had to the inordinate delay, in completing the assessments and in passing the assessment orders for the various years (Exts. P13 to P21) simultaneously, and also setting in motion, more than one of the recovery proceedings simultaneously have resulted in irreparable injury and harm to the petitioner. The petitioner has been asked to deposit 50 per cent of the balance of the tax due which is nearly Rs. 5 crores. It is impossible for any person, regularly doing business to deposit nearly 5 crores of rupees. So, it is contended that the recovery proceedings are also arbitrary and without bona fides.

(2.) Learned Advocate General invited our attention to the fact that the petitioner has filed appeals from Exts. P13 to P21 before the second respondent and that they are still pending. The learned Advocate General contends that in view of the pendency of the appeals, it is not open to the petitioner to simultaneously invoke the discretionary jurisdiction of this court under Art.226 of the Constitution of India as a parallel remedy and assail the assessment orders. That will in effect deprive the appellate authority of its jurisdiction to dispose of the appeals pending before it. Strong reliance was placed on a Division Bench decision reported in Kunjahammad Haji & others v. State of Kerala and others ( 1960 KLT 930 ) and also on the Supreme Court decision reported in Jai Singh v. Union of India ( AIR 1977 SC 898 ) to contend that it is not open to the petitioner to invoke the extraordinary jurisdiction of this court under Art.226 of the Constitution and assail the assessment orders when such orders are pending in appeals before the statutory authorities. Learned Advocate General also brought to our notice the decision reported in Assistant Collector of Central Excise v. Dunlop India Ltd. and others ( AIR 1985 SC 330 ) wherein the Supreme Court has adverted to its earlier decisions, Siliguri Municipality v. Amalendu Das ( AIR 1984 SC 653 ) and Titaghur Paper Mills Co. Ltd. v. State of Orissa ( AIR 1983 SC 603 ) and other decisions, wherein the guidelines in the matter regarding the scope of interference under Art.226 of the Constitution in taxation matters have been laid down. It is contended that this Original Petition is not maintainable. The petitioner does not deserve any relief at the hands of this court at this stage. The recovery proceedings initiated in this case are authorised and valid.

(3.) Mr. M. Rajasekharan Nair, Advocate has filed C.M.P. No. 9408 of 1985 to implead the General Secretary of Mc. Dowell & H R.B. Employees Congress and another in the Original Petition. We indicated to counsel that the petitioners have no locus standi, in these proceedings to get themselves impleaded. However, we intimated the counsel that we will hear him also in exercise of the powers under R.152(2) of the Rules of the High Court of Kerala, 1971. Accordingly, we heard Mr. Rajasekharan Nair also in the O.P.