Kerala High Court
Agricultural Income Tax & Commercial ... vs M/S.Sobha Gold on 1 June, 2017
Author: Dama Seshadri Naidu
Bench: Antony Dominic, Dama Seshadri Naidu
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE ANTONY DOMINIC
&
THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU
THURSDAY, THE 17TH DAY OF AUGUST 2017/26TH SRAVANA, 1939
WA.No. 1454 of 2017
IN WP(C).33522/2016
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AGAINST THE JUDGMENT IN WP(C) 33522/2016 of HIGH COURT OF KERALA
DATED 01-06-2017
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APPELLANTS/RESPONDENTS IN WPC:
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1. AGRICULTURAL INCOME TAX & COMMERCIAL TAX OFFICER
ALATHUR-678541
2. DEPUTY COMMISSIONER
DEPARTMENT OF COMMERCIAL TAXES, SALES TAX COMPLEX,
PALAKKAD- 678 001
BY SR. GOVERNMENT PLEADER SRI.MUHAMMED RAFIQ
RESPONDENT/PETITIONER IN WPC:
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M/S.SOBHA GOLD
IV/814, CHANTHAPURA, KUZHALMANNAM, PALAKKAD, REP. BY ITS
MANAGING PARTNER, OUSEPH JOY.
BY SRI.HARISANKAR V. MENON
THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON
17-08-2017, ALONG WITH WA. 1459/2017, WA. 1485/2017, THE COURT ON
THE SAME DAY DELIVERED THE FOLLOWING:
ANTONY DOMINIC,
&
DAMA SESHADRI NAIDU, JJ.
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W. A. Nos.1454, 1459 & 1485 of 2017
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Dated this the 17th day of August, 2017
JUDGMENT
Antony Dominic, J.
1. aThese appeals arise from the common judgment of the learned single Judge in W.P.(C) Nos.24958/15 and 33522 of 2016. Among the three appeals, W.A. No.1459 of 2017 is filed by the assessee and W.A. Nos.1454 and 1485 of 2017 are filed by the State.
2. Briefly stated, the case is that, a proprietorship, the appellant in W.A. No.1459 of 2017, obtained registration under the KVAT Act in October, 2013 to commence business in gold jewellery. In December, 2013, by Exts.P1 and P1(a) in W.P.(C) No.24958 of 2015, they acquired certain quantity of gold. However, in the return concerning the month of December, 2013, the stock was not declared. Subsequently, W. A. Nos.1454, 1459 & 1485 of 2017 -2- the registration itself was got cancelled on the application of the assessee with effect from 31.03.2014. Thereafter, by its letter dated 16.05.2014 to the Assessing Officer, the assessee declared the discrepancy in his return for December, 2013 caused on account of his omission to declare the stock of gold. However, without permitting the assessee to revise the return, the Assessing Officer issued notice to complete assessment including the gold for the Assessment Year 2013-14. Simultaneously, penalty notice was also issued. Although the assessee filed his reply notice and contested the matter, by Exts.P5 and P5(a) in W.P.(C) No.24958 of 2015, assessment was completed and penalty was also levied. It was, in these circumstances, the assessee filed W.P.(C) No.24958 of 2015 seeking to quash Exts.P5 and P5(a) mentioned above.
3. In the meantime, with effect from 01.04.2014, the assessee commenced business of gold in partnership and W. A. Nos.1454, 1459 & 1485 of 2017 -3- the stock of gold acquired by him in December, 2013 was brought in as his contribution to the capital of the firm. Here again, the firm omitted to indicate stock of gold in its return for the month of April, 2014. Almost one and a half years thereafter, on 24.08.2015, Assessing Officer issued notice to produce books on 08.09.2015. Subsequently, assessee by its letter dated 14.10.2015, disclosed the Assessing Officer their omission to indicate the stock of gold in their return and requested to allow them to revise their returns. That request was rejected and thereafter, pre-assessment notice as well as notice of penalty was issued. Accordingly, vide Exts.P6 and P6(a) in W.P.(C) No.33522 of 2016, assessment was completed and penalty of double the amount of tax was also levied. It was challenging these proceedings, the assessee filed W.P.(C) No.33522 of 2016.
4. By the judgment under appeal, the learned single Judge allowed W.P.(C) No.24958 of 2015 and quashed the W. A. Nos.1454, 1459 & 1485 of 2017 -4- impugned proceedings and directed that the assessee be permitted to revise his return and on that basis to complete the assessment.
5. Insofar as W.P.(C) No.33522 of 2016 is concerned, the learned single Judge upheld Ext.P6 order of assessment, but interfered with the penalty order by reducing the same to `1 lakh.
6. In W.A. Nos.1454 and 1485 of 2017, the State is challenging the judgment of the learned single Judge while in W.A. No.1459 of 2017, the assessee is challenging the judgment of the learned single Judge in W.P.(C) No.33522 of 2016 to the extent assessment order has been upheld by the learned single Judge.
7. We heard the learned Government Pleader appearing for the State and the learned counsel appearing for the Revenue.
8. Insofar as the judgment in W.P.(C) No.24958 of W. A. Nos.1454, 1459 & 1485 of 2017 -5- 2015 is concerned, the complaint of the learned Government Pleader is that the learned single Judge has allowed the assessee to file his revised return long after the registration itself has been cancelled. Therefore, according to the learned Government Pleader, the judgment of the learned single Judge is illegal. Similarly, insofar as the judgment in W.P.(C) No.33522 of 2016 is concerned, his complaint is that the learned single Judge for no valid reason has reduced the penalty from double the amount of tax to `1 lakh.
9. At the same time, learned counsel for the assessee complains that the assessee having made a request for revising the return of the partnership firm, should have been allowed to revise his return and for that reason, the judgment of the learned single Judge to the extent the assessment order challenged in W.P.(C) No.33522 of 2016 is illegal.
W. A. Nos.1454, 1459 & 1485 of 2017 -6-
10. Having considered the rival submissions of both sides, we confess our inability to accept the arguments raised before us. As far as the permission given to the assessee, the proprietorship, to revise its return for the month of December, 2013 in the judgment in W.P.(C) No.24958 of 2015 is concerned, as rightly found by the learned single Judge, long before the notice was issued by the Assessing Officer, the assessee himself had by its letter dated 16.05.2014 informed the Assessing Officer of the discrepancy caused on account of his omission to include the stock of gold in the return for the month of December, 2013. When such a request was made, as rightly found by the learned single Judge, the Assessing Officer ought to have given him an opportunity. True, the request was made long after 31.03.2014 when the registration was got cancelled by the assessee. But, however, as stated by the learned single Judge, even in such a case, revision of W. A. Nos.1454, 1459 & 1485 of 2017 -7- assessment pertaining to the period of which the assessee was carrying on the business on the strength of the registration granted to him, was permissible in law and it was therefore, the learned single Judge has taken the view.
11. Coming to the complaint of the learned Government Pleader that in the judgment in W.P.(C) No.33522 of 2016, the learned single Judge has erroneously reduced the penalty imposed to `1 lakh, is concerned, according to us, levy of penalty should always be proportionate to the gravity of the offence committed by the assessee. Insofar as this case is concerned, though at a belated stage, the assessee himself has confessed his mistake and sought an opportunity to revise his return, though such revision could not have been allowed, still taking into account such conduct of the assessee, we feel that the learned single Judge was justified in taking the view that the penalty of double the amount of tax imposed, viz. W. A. Nos.1454, 1459 & 1485 of 2017 -8- `23,61,076/- was too disproportionate. Therefore, we do not find any reason to interfere with that relief granted by the learned single Judge also.
12. Turning to W.A. No.1459 of 2017 filed by the assessee, the partnership firm, their grievance is to the extent that Ext.P6 order of assessment challenged was sustained by the learned single Judge. The contention raised is that when they made a request for revision of the returns that ought to have been allowed.
13. We cannot ignore the fact that the omission in question had occurred in April, 2014. The Assessing Officer had issued notice calling upon the assessee to produce the books of accounts on 24.08.2015. The date specified for appearance was 08.09.2015. It is still thereafter that on 14.10.2015, the assessee made request for revision of their returns. In such a situation, when the request was rejected and assessment is completed, we cannot say that the W. A. Nos.1454, 1459 & 1485 of 2017 -9- Assessing Officer has committed an illegality in completing the assessment. We, therefore, agree with the view taken by the learned single Judge in that regard also.
14. Resultantly, we do not find any merit in these appeals.
The appeals, therefore, fail and are accordingly dismissed.
Sd/-
ANTONY DOMINIC JUDGE Sd/-
DAMA SESHADRI NAIDU JUDGE kns/-
//TRUE COPY// P.S. TO JUDGE W. A. Nos.1454, 1459 & 1485 of 2017 -10-