TMI Blog2013 (2) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants must be treated as aware that he was not made a member of the team by the Commissioner. So, here is a case in which there were ten members in the team vide exhibits P1 and P1(a). Midway through, the subsequent incumbent who was not a member of the team previously, nor was made a member of the team either proceeded with the matter. This again indicates that at any rate the appellants were gambling for a favourable decision by sitting on the fence. Unlike the facts situation in the case law which were cited for the proposition that the persons who hear must decide being part of the principles of natural justice with which proposition we can have no quarrel, we do not see how it can be said that if the officer has jurisdiction and he hears and he decides, the said principle is flouted. As informed that the appellants have already approached the appellate forum and sought alternate remedies. Therefore it may not be appropriate to conclude the issue and the appellants will be at liberty to pursue their remedies before the appellate authority. The appellate forum will be free to proceed with the matter untrammeled by anything contained in this judgment and the appellants wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tituted for disposal of the pending files of the six live chicken dealers (three of whom who are the appellants before us). 3. The learned single judge See page [2013] 65 VST 523. has relegated the appellants to pursue the statutory remedies. It is being aggrieved by the same, the appellants are before us. 4. We heard Shri K. Srikumar, learned senior counsel appearing for the appellant in W.A. No. 2266 of 2012, Shri G. Shrikumar, learned senior counsel appearing for the appellant in W.A. No. 39 of 2013, Shri K.P. Mayankutty Mather, learned counsel appearing for the appellant in W.A. No. 40 of 2013 and also Shri Sojan James, learned Senior Government Pleader for Taxes. 5. The common contention which is raised by all the appellants is that the orders of penalty passed by the Intelligence Officer, Thrissur, are without jurisdiction. The argument is that in so far as the Commissioner has constituted a team of seven officers and later on added to the said team with further three officers, it is only the team of officers who could have proceeded to impose penalty on the appellants. In this context, support is sought to be drawn from the notification issued dated March 31, 2005 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Deputy Commissioner (Appeals) and Assistant Commissioner (Appeals) in the exercise of their appellate functions. (5) The Commissioner or the Deputy Commissioner may by order in writing,- (a) transfer any case or cases relating to any assessee or class of assessees pending before an assessing authority to another assessing authority having jurisdiction to deal with such case or cases; or (b) specify one of the assessing authorities having jurisdiction over an area, which shall deal with any case or cases relating to any assessee or class of assessees. (6) Where any case is transferred to an assessing authority under clause (a) of sub-section (5), such assessing authority may deal with the case either de novo or from the stage at which it was transferred. It is, therefore, contended that when once the Commissioner in exercise of the power granted to him under the statutory notification has constituted the team of officers to not only investigate into the affairs of the appellants and three others, but if necessary also to initiate penal action and prosecution, the matter which was commenced with the issuance of such an order by the Commissioner supplemented with exhib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edecessor without hearing the affected person. (iv) In Union of India v. E.K. Andrew [1999] 95 Comp Cas 537 (Ker), a Bench of this court again took the view that the person who heard the case should pass the orders, and that it is an indispensable requirement for observing the principles of natural justice. (v) In P. Sivaramakrishnan v. State of Kerala [1995] 99 STC 473 (Ker); [1994] KLJ (Tax Cases) 369, a learned single judge of this court dealt with the question as to whether the conferment of power under section 3(2) of the KGST Act which is in pari materia with section 3 of the Act, could extend to the entire State or only to defined areas of parts of the State. The learned single judge took the view that conferment of power throughout the State is not in consonance with section 3(2) and it is ultra vires the provisions. The said view was, however, disapproved and overruled by a Bench of this court in Star Traders v. Intelligence Officer [1995] KLJ (Tax Cases) 183. 7. Therefore, Shri K.P. Mayankutty Mather would contend that when under the notification which we have already noticed issued under the Act, the Commissioner has been empowered to assign such functions as he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , we notice the following case law: (i) In South Travancore Distilleries Allied Products v. Asst. Commr. of Commercial Taxes [1999] KHC 239, a Bench of this court was dealing with the question as to whether a writ petition would be maintainable when there are alternate remedies available. The court, inter alia, held that if there is violation of the principles of natural justice or if the proceedings are wholly without jurisdiction, the writ petition is maintainable. (ii) Hindustan Petroleum Corporation Limited v. Assistant Commissioner, Special Circle II, Commercial Taxes, Ernakulam [2011] 37 VST 567 (Ker); [2009] 4 KHC 819 was a decision of a Division Bench of this court rendered under section 17D of the KGST Act. The court, inter alia, held as follows (page 580 in 37 VST): . . . Assessment has to be completed after hearing the party by the team on the objection filed to the pre-assessment notice and in order to have a binding assessment, the assessment should be one completed with unanimous agreement of all the team members. In fact, ex parte assessment is contemplated only when parties, who are served notices informing the venue and date of hearing, fail to appear. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner to allocate separate areas for separate Assistant Sales Tax Officers. When such an allocation was made, the jurisdiction of each officer was confined to the area allotted to him. (vi) In Chakkiath Engineering Works v. Sales Tax Officer (Audit), Export and Import Department of Commercial Taxes, Ernakulam [2008] 11 VST 319 (Ker), the court held as follows: This is a fit case where the High Court should interfere because if the petitioner is directed to pursue the statutory remedies against the killer dose of tax and penalty and wait for the result for continued business, the same will destroy the petitioner's business as no foreign party is willing to wait for protracted litigation in India to be over to continue the business. Above all the impugned proceedings are an antithesis of the liberalised policies of the Government to promote international trade and commerce. (vii) Shri K. Srikumar, learned senior counsel, finally drew our attention to a two-Judge Bench decision of the apex court in Cantonment Board v. Church of North India [2011] KHC 4506. It arose out of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971. The writ petition f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, pecuniary and jurisdiction over the subjectmatter or inherent. For reasons which we will indicate later on, we would think that the principles in the said judgment may not assist the appellant. 11. Per contra, learned Government Pleader would contend that this is a case where the sixth respondent-Intelligence Officer undoubtedly possessed jurisdiction. He also had jurisdiction to impose penalty. He would submit that by exhibits P1 and P1(a), the Commissioner had, having regard to the nature and the volume of the work, constituted a special team for the disposal of the pending files relating to six persons. As the investigation required more manpower, the team was reconstituted. He drew our attention to the wording of exhibit P1 to indicate that the essential purpose of the team was to investigate. He emphasised the words if necessary appearing before initiating penal action . He would also contend that even going by exhibit P1 order of the Commissioner, what was contemplated is only initiating penal action by the team, even accepting the argument of the appellants. He would further draw our attention to the decision of this court in Trivandrum Co-operative District Wholesa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the proposition that the Intelligence Officer, Thrissur, is an empowered person to impose penalty. The empowered person, if he is the Intelligence Officer and if he is considered as the empowered officer, has indeed issued the notice proposing the penalty and there is no case that he has not considered the matter as a statutory authority and he has imposed the penalty. The only question is whether by reason of a constitution of a team, the team alone could consider and the team alone could impose the penalty? No doubt, the argument flows from a combined reading of section 3(3) of the Act and the terms of the notification and the powers which are vested with the Commissioner. The argument is that the order passed by the officer is without jurisdiction. The word jurisdiction has many shades of meaning based on the context. In the context of civil law, broadly it is divided into pecuniary, inherent and territorial. Any flaw as far as inherent jurisdiction, in that, there is lack of inherent jurisdiction, would be fatal and lack of inherent jurisdiction would deprive the decision of the legal authority which it would otherwise possess. It can be set up at any stage. There can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aise their objections for the reason that they were under the impression generated by the presence of the members of the team that ultimate decision will be rendered by that team. Here again, we are at a loss how such argument would lie at the mouth of the appellants. Even according to them, there are ten members going by exhibit P1 and P1(a). There were only four members who participated. Matters were being processed even according to them, by four members out of the team of ten members. They should have been on guard and immediately objected to it, if advised. They acquiesced and the conduct of the appellants instils in us the impression that here is a case where the appellants were clearly sitting on the fence. Still further, we may notice another development. Though the notice was issued by the Intelligence Officer who was a member of the team, subsequently he was transferred. The successor incumbent in the office of the Intelligence Officer, Thrissur (IB) took over. He continued with the proceedings and the final order was passed by him. The appellants must be treated as aware that he was not made a member of the team by the Commissioner. So, here is a case in which there were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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