Kerala High Court
State Of Kerala vs M/S.Bharath Petroleum Corporation Ltd on 11 February, 2025
Author: A.K.Jayasankaran Nambiar
Bench: A.K.Jayasankaran Nambiar
O.T. Revision No.6 of 2021 1 2025:KER:11329
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR
&
THE HONOURABLE MR. JUSTICE EASWARAN S.
TUESDAY, THE 11TH DAY OF FEBRUARY 2025 / 22ND MAGHA, 1946
OT.REV NO. 6 OF 2021
AGAINST THE ORDER DATED 31.1.2019 IN TA NO.50 OF 2015 OF
KERALA VALUE ADDED TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH,
ERNAKULAM
REVISION PETITIONER/RESPONDENT/REVENUE :
STATE OF KERALA
REPRESENTED BY JOINT COMMISSIONER (LAW) ,
KERALA GST DEPARTMENT, ERNAKULAM.
BY ADV V.K. SHAMSUDHEEN, SR. GOVERNMENT PLEADER
RESPONDENT/APPELLANT/ASSESSEE :
M/S.BHARATH PETROLEUM CORPORATION LTD.
ERNAKULAM.
BY ADVS. K.I.MAYANKUTTY MATHER (SR.)(K/272/1984)
PARVATHI S
T.K.SREEKALA(K/000246/1987)
NIKITHA SUSAN PAULSON(K/001533/2019)
ANAND GEO(K/2561/2023)
THIS OTHER TAX REVISION (VAT) HAVING COME UP FOR ADMISSION ON
11.02.2025, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
O.T. Revision No.6 of 2021 2 2025:KER:11329
ORDER
Dr. A.K.Jayasankaran Nambiar, J.
This O.T. Revision is preferred by the State against the order dated 31.01.2019 of the Kerala Value Added Tax Act Appellate Tribunal, Additional Bench, Ernakulam in T.A. No.50 of 2015.
2. The sole issue that arises for consideration in this revision petition is whether or not the assessment completed against the respondent/assessee for the assessment year 2005-2006 under the Kerala General Sales Tact Act, (for short, 'the KGST Act') is barred by limitation or not. The appellate tribunal, in the impugned order, finds as follows on the said issue in paragraph Nos.3, 4 and 5 :
" 3. The fourth proviso to Section 17(6) provides that all assessments pending as on 31st March 2013 shall be completed on or before 31st March, 2014. As mentioned in the preceding paragraph the time for completing the assessment for the year 2005-06 as provided under Section 17(6) of the Act was on or before 31/03/2010. However by the Finance Act, 2011 (Act 16 of 2011), the fourth proviso was substituted and it was provided that the assessments relating to the orders up to and including the year 2005-06 pending as on 31st March, 2011 shall be completed on or before 31st March, 2012. Later by the Kerala Finance Act, 2012 (Act 16 of 2012), the fourth proviso was again substituted and it was provided that all assessments pending as on 31st March 2011- shall be completed on or before 31st March, 2013. The Kerala Finance Act, 2013 (Act 29 of 2013) again substituted the fourth proviso and it was provided that all assessments pending as on 31st March, 2013 shall be completed on or before 31st March, 2014. Thereafter, no further extension has been O.T. Revision No.6 of 2021 3 2025:KER:11329 provided. We have gone through the Kerala Finance Act, 2014, Kerala Finance Act, 2015 and Kerala Finance Act, 2016. No further amendments have been made to the fourth proviso to Section 17(6) of the Act. Thus, it is clear that all assessments pending should have been completed on or before 31st March, 2014. It is an admitted fact that the assessment for the year 2005-06 has been completed only on 26/06/2014 that is, after the expiry of the period of limitation as provided in the fourth Proviso to Section 17(6) of the Act, that is, 31/03/2014. Thus the fourth Proviso does not come to the rescue of the Revenue on the question of limitation.
4. In this connection, it is also relevant to note the specific argument of the appellant's learned counsel that the fourth proviso to Section 17(6) of the Act applies only in the case of "pending assessment". According to the learned counsel, an assessment can be said to be pending only when assessment proceedings have been initiated after verification of the books of accounts and issue of pre-assessment notice. In the present case, it is submitted that a perusal of the assessment order will show that the pre-assessment notice under Section 17(3) of the Act has been issued only on 23/02/2013. So according to him, the assessment for the year 2005-06 having not been completed before 31/03/2010 has become time barred and since no preassessment notice has been issued before 31/03/2010, the assessment for the year 2005-06 cannot be said to be pending as on 31/03/2010. Therefore, the assessment has become time barred and the fourth Proviso will not be applicable since the assessment for the year 2005-06 is not pending. In support of this contention, he has placed reliance on the decision of the Hon'ble High Court of Kerala in Hakeem. K. Vs. Deputy Commissioner, Commercial Taxes. Palakkad and Others [WP(C) No: 11049 of 2012]. A copy of the judgment dated 27/11/2015 was produced before us. At Paras 3 of the judgment, the Hon'ble High Court has held as under:-
"3. On a consideration of the facts and circumstances of the case as also the submissions made across the bar, I find that O.T. Revision No.6 of 2021 4 2025:KER:11329 going by the provisions of Section 17 of the KGST Act, the assessments in relation to the petitioner for the assessment years 2003-04 and 2004-05, ought to have been completed by 31.03.2009 and 31.03.2010 respectively. As on those dates, it is not in dispute, that a notice under Section 17D or under Section 17 had not been served on the petitioner in respect of the said assessment years. The effect of this inaction on the part of the respondents was that, as on 31.03.2009 and 31.03.2010, the assessments in relation to the petitioner for the assessment years 2003-04 and 2004-
05 became time barred. Although the Finance Act 2011 amended Section 17(6) of the KGST Act, so as to enable the respondents to complete the assessments upto the assessment year 2005-06 that were pending as on 31.03.2011, before 31.03.2012, the same would not come to the aid of the respondents in the instant case since on the date of the amendment introduced by the Finance Act, 2011, there was no assessment of the petitioner pertaining to the assessment years 2003-04 and 2004-05, that was pending. I therefore, find that the orders impugned in the writ petitions namely, Exts.P8 and P9, cannot be legally sustained and I quash the same. In taking the aforesaid view I am fortified by the decision of a Division Bench of this Court in Commissioner of Agricultural Income Tax v. Panampunna Estates [1997 (2) KLT 206] where also, in the context of an assessment under the Agricultural Income Tax Act, 1950, the Court took note of the fact that the three year period for completing the assessment had already expired by the time the amendment extending the period of three years to five years was given effect to in the Agricultural Income Tax Act. It was held that the subsequent amendment in the Act could not have conferred the assessing officer, with power to assess in cases, where the assessments had O.T. Revision No.6 of 2021 5 2025:KER:11329 already become barred by efflux of time. Resultantly, the writ petition succeeds with consequential reliefs to the petitioner."
5. In the light of the above judgment of the Hon'ble High Court of Kerala, we can only conclude that the assessment for the year 2005- 06 having not been completed on or before 31/03/2010 has become time barred. Since no preassessment notice has been issued prior to 31/03/2010, the assessment for the year 2005-06 cannot be said to be pending so as to apply the time limit specified under Section 17(6) of the Act. Even if we apply the time limit specified in 17(6) of the Act which provided that all assessments pending as on 31st March, 2013 shall be completed on or before 31st March, 2014, we find that the assessment has been completed only on 26/06/2014 that is, after the time limit specified under the fourth proviso to Section 17(6) of the Act. For the aforesaid reasons, we can only conclude that the assessment for the year 2005-06 is time barred applying the provision contained in Section 17(6) of the Act as well as the fourth proviso to Section 17(6)."
3. We find that the judgment dated 27.11.2015 of the learned Single Judge in Hakeem K. Vs. Deputy Commissioner, Commercial Taxes, Palakkad and Others [W.P.(C) No.11049 of 2012] that was relied on by the tribunal is pending in appeal before the Division Bench of this Court, but there is no order of stay of operation of the said judgment. Even otherwise, as rightly noticed by the tribunal in its order, the assessment pending as on 31.3.2013 had to be completed on or before 31.3.2014, and, in the instant case, the assessment was completed only on 26.6.2014. In the absence of any extension of the time limit beyond 31.3.2014 by any further amendment of the KGST Act, the said finding O.T. Revision No.6 of 2021 6 2025:KER:11329 of the appellate tribunal is legally unassailable. We, therefore, see no merit in the O.T. Revision, and the same is dismissed as devoid of merit by answering the questions of law raised against the revenue and in favour of the assessee.
Sd/-
DR. A.K.JAYASANKARAN NAMBIAR JUDGE Sd/-
EASWARAN S.
JUDGE
NS
O.T. Revision No.6 of 2021 7 2025:KER:11329
APPENDIX OF OT.REV 6/2021
PETITIONER ANNEXURES
ANNEXURE A TRUE COPY OF THE ASSESSMENT ORDER BEARING
NO. 23040371 /2005-06 DATED 26.06.2014.
ANNEXURE B TRUE COPY OF THE 1ST APPELLATE ORDER STA NO.
182/2014 DATED 27.07.2015.
ANNEXURE C CERTIFIED COPY OF THE ORDER PASSED BY THE
APPELLATE TRIBUNAL IN T.A. NO.50/2015 DATED
31.01.2019.