Kerala High Court
Modicare Ltd vs Intelligence Officer on 29 August, 2016
Author: K. Vinod Chandran
Bench: K.Vinod Chandran
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN
WEDNESDAY, THE 4TH DAY OF JANUARY 2017/14TH POUSHA, 1938
WP(C).No. 171 of 2017 (V)
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PETITIONER(S):
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MODICARE LTD.
I FLOOR, JANATHA ROAD,
VYTTILA, ERNAKULAM - 682 019.
(REPRESENTED BY SRI.VASANTHA KUMAR,
AUTHORIZED SIGNATORY)
BY ADVS.SRI.K.N.SREEKUMARAN
SRI.K.M.CHERIAN
SMT.V.P.SEENA DEVI
RESPONDENT(S):
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1. INTELLIGENCE OFFICER
SQUAD NO.VIII, COMMERCIAL TAXES,
ERNAKULAM, KOCHI - 682 015.
2. COMMISSIONER OF COMMERCIAL TAXES
TAX TOWERS, KARAMANA,
THIRUVANANTHAPURAM - 695 001.
3. DEPUTY COMMISSIONER
COMMERCIAL TAXES, ERNAKULAM,
KOCHI - 682 015.
4. INSPECTING ASSISTANT COMMISSIONER
COMMERCIAL TAXES, KAKKANAD,
KOCHI - 682 030.
BY GOVERNMENT PLEADER SRI.V.K.SHAMSUDHEEN
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 04-01-2017, THE COURT ON THE SAME
DAY DELIVERED THE FOLLOWING:
bp
WP(C).No. 171 of 2017 (V)
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APPENDIX
PETITIONER(S)' EXHIBITS
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P1: TRUE COPY OF THE ANNUAL RETURN FOR 2011-12 FILED
BEFORE THE ASSISTANT COMMISSIONER, SPECIAL CIRCLE-I,
ERNAKULAM.
P2: TRUE COPY OF THE ANNUAL RETURN FOR 2012-13 FILED
BEFORE THE ASSISTANT COMMISSIONER, SPECIAL CIRCLE-I,
ERNAKULAM.
P3: TRUE COPY OF THE ANNUAL RETURN FOR 2013-14 FILED
BEFORE THE ASSISTANT COMMISSIONER, SPECIAL CIRCLE-I,
ERNAKULAM.
P4: TRUE COPY OF THE ANNUAL RETURN FOR 2014-15 FILED
BEFORE THE ASSISTANT COMMISSIONER, SPECIAL CIRCLE-I,
ERNAKULAM.
P5: TRUE COPY OF THE APPLICATION FOR CLARIFICATION WITH
URGENT HEARING PETITION FILED BEFORE THE 2ND
RESPONDENT ON 01.9.2016.
P6: TRUE COPY OF THE PENALTY ORDER DATED 29.8.2016 FOR
2011-12 ISSUED BY THE 1ST RESPONDENT.
P7: TRUE COPY OF THE PENALTY ORDER DATED 29.8.2016 FOR
2012-13 ISSUED BY THE 1ST RESPONDENT.
P8: TRUE COPY OF THE PENALTY ORDER DATED 29.8.2016 FOR
2013-14 ISSUED BY THE 1ST RESPONDENT.
P9: TRUE COPY OF THE PENALTY ORDER DATED 29.8.2016 FOR
2014-15 ISSUED BY THE 1ST RESPONDENT.
P10: TRUE COPY OF THE REVISION PETITION FILED AGAINST
EXT.P6 BEFORE THE 3RD RESPONDENT ON 08.11.2016.
P10(A): TRUE COPY OF THE STAY APPLICATION FILED IN EXT.P10
APPEAL BEFORE THE 3RD RESPONDENT ON 08.11.2016.
P10(B): TRUE COPY OF THE EARLY APPLICATION FILED IN EXT.P10
APPEAL BEFORE THE 3RD RESPONDENT ON 08.11.2016.
P11: TRUE COPY OF THE REVISION FILED FILED AGAINST
EXT.P7 BEFORE THE 3RD RESPONDENT ON 08.11.2016.
WP(C).No. 171 of 2017 (V)
P11(A): TRUE COPY OF THE STAY APPLICATION FILED IN
EXT.P11 APPEAL BEFORE THE 3RD RESPONDENT ON
08.11.2016.
P11(B): TRUE COPY OF THE EARLY APPLICATION FILED IN
EXT.P11 APPEAL BEFORE THE 3RD RESPONDENT ON
08.11.2016.
P12: TRUE COPY OF THE REVISION PETITON FILED
AGAINST EXT.P8 BEFORE THE 3RD RESPONDENT ON
08.11.2016.
P12(A): TRUE COPY OF THE STAY APPLICATION FILED IN
EXT.P12 APPEAL BEFORE THE 3RD RESPONDENT ON
08.11.2016.
P12(B): TRUE COPY OF THE EARLY APPLICATION FILED IN
EXT.P12 APPEAL BEFORE THE 3RD RESPONDENT ON
08.11.2016.
P13: TRUE COPY OF THE REVISION PETITION FILED
AGAINST EXT.P9 BEFORE THE 3RD RESPONDENT ON
08.11.2016.
P13(A): TRUE COPY OF THE STAY APPLICATION FILED
EXT.P13 APPEAL BEFORE THE 3RD RESPONDENT ON
08.11.2016.
P13(B): TRUE COPY OF THE EARLY APPLICATION FILED IN
EXT. P13 APPEAL BEFORE THE 3RD RESPONDENT ON
08.11.2016.
P14: TRUE COPY OF THE DEMAND NOTICE NO. A5-3050/16
DATED 01.12.2016 FOR 2011-12 ISSUED BY THE 4TH
RESPONDENT.
P15: TRUE COPY OF THE DEMAND NOTICE NO. A5-3052/16
DATED 01.12.2016 FOR 2012-13 ISSUED BY THE 4TH
RESPONDENT.
P16: TRUE COPY OF THE DEMAND NOTICE NO. A5-3051/16
DATED 01.12.2016 FOR 2013-14 ISSUED BY THE 4TH
RESPONDENT.
P17: TRUE COPY OF THE DEMAND NOTICE NO. A5-3047/16
DATED 01.12.2016 FOR 2014-15 ISSUED BY THE 4TH
RESPONDENT.
WP(C).No. 171 of 2017 (V)
P18: TRUE COPY OF THE COMMON STAY ORDER NO.
RP. 265/16 266/16, 267/16 & 268/16 DATED
09.12.2016 ISSUED BY THE 3RD RESPONDENT.
RESPONDENT(S)' EXHIBITS : NIL.
//TRUE COPY//
P.A. TO JUDGE
bp
K. VINOD CHANDRAN, J.
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W.P.(C) No. 171 of 2017 (V)
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Dated: 4th January, 2017
J U D G M E N T
The petitioner is aggrieved with the order passed at Ext.P18 directing payment of 25% of the disputed penalty, imposed for the years 2011-2012, 2012-2013, 2013-2014 and 2014-2015. The petitioner, admittedly, is a multi-level marketing company as defined under the Kerala Value Added Tax Act, 2003 ('KVAT Act' for short). The penalty proceedings were initiated by the Intelligence Officer on the ground of non payment of surcharge as per Sub Section (1A) of Section 3 of the Kerala Surcharge on Taxes Act, 1957, which is extracted herein below:
"(1A) The tax payable under sub-
sections (1) and (2) of section 6 of the Kerala Value Added Tax Act, 2003 (30 W.P.(C) No. 171/2017 -2- of 2004), other than declared goods as defined in section 14 of the Central Sales Tax Act, 1956 (Central Act 74 of 1956) shall, in the case of national or multinational companies functioning in the State as retail chains or direct marketing chains who import not less than fifty per cent of their stock from outside the State or country and not less than seventy-five per cent of whose sales are retail business, and whose total turnover exceeds five crore rupees per annum, but excluding such class of dealers of certain commodities, which may be notified by the Government from time to time, be increased by a surcharge at the rate of ten per cent, and the provisions of the Kerala Value Added Tax Act, 2003 (30 of 2004) shall apply in relation to the said surcharge as they apply in relation to the tax payable under the said Act." W.P.(C) No. 171/2017 -3-
2. The petitioner's contention is that the petitioner is not a retail dealer, as in the case of many other multi-level marketing companies which have their own retail outlets. The said contention cannot be accepted especially since Sub Section (1A), as extracted herein above, does not speak of retail outlets and only speaks of retail chains or direct marketing chains. The petitioner, admittedly, employs agents for marketing of its products and all other conditions, as seen from Sub Section (1A), are satisfied. The petitioner imports their stock from outside the State and more than 75% of the sales is through the agents, which again is a retail sale.
3. In such circumstance, the petitioner cannot wriggle out of the liability as per Sub Section (1A). The revisional authority has only imposed 25% of the total penalty. The order at Ext.P18 has also considered the contentions of the petitioner in detail. This Court does W.P.(C) No. 171/2017 -4- not find any reason to interfere with Ext.P18 order. However, it is made clear that the revision itself will be considered untramelled by the observations made herein, which are only prima facie in nature. The petitioner would be granted two months' time to satisfy Ext.P18 order.
The writ petition is dismissed with the above reservation of extended time. No Costs.
Sd/-
K.VINOD CHANDRAN, JUDGE jjj 4/1/17