Kerala High Court
Mathew V.J vs Commercial Tax Officer on 11 July, 2012
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR
MONDAY, THE 1ST DAY OF FEBRUARY 2016/12TH MAGHA, 1937
WP(C).No. 3510 of 2016 (K)
-------------------------------------------
PETITIONER(S) :
--------------------------
MATHEW V.J,
PROPRIETOR, GREAT QUEEN HOTEL, 49/180,
PUNNACHAL JUNCTION, ELAMAKKARA, COCHIN- 682 026.
BY ADV. SRI.TOMSON T.EMMANUEL
RESPONDENT(S) :
----------------------------
1. COMMERCIAL TAX OFFICER,
COMMERCIAL TAXES, 1ST CIRCLE, KALAMASSERY AT KAKKANAD,
COCHIN- 682 030.
2. INTELLIGENCE OFFICER(IB),
COMMERCIAL TAXES, EDAPPALLY, COCHIN- 682 024.
3. DEPUTY COMMISSIONER,
COMMERCIAL TAXES, SALES TAX COMPLEX, THEVARA,
COCHIN- 682 015.
4. STATE OF KERALA,
REPRESENTED BY SECRETARYTO GOVERNMENT,
TAXES DEPARTMENT, SECRETARIATE,
THIRUVANANTHAPURAM- 695 033.
BY GOVERNMENT PLEADER SMT.LILLY.K.T
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON 01-02-2016, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
Msd.
WP(C).No. 3510 of 2016 (K)
----------------------------------------
APPENDIX
PETITIONER(S)' EXHIBITS :
----------------------------------------
P1: TRUE COPY OF ANNUAL E-RETURN DATED 11-07-2012 SUBMITTED IN
FORM NO.10D FOR THE YEAR 11-12, WITH PROOF OF PAYMENT OF TAX
U/S. 8(C) OF THE KVAT ACT.
P1(A): TRUE COPY OF ANNUAL E-RETURN DATED 06-10-2014 SUBMITTED IN
FORM NO.10D FOR THE YEAR 12-13, WITH PROOF OF PAYMENT OF TAX
U/S. 8(C)(I) OF THE KVAT ACT.
P1(B): TRUE COPY OF ANNUAL E-RETURN DATED 06-10-2014 SUBMITTED IN
FORM NO.10D FOR THE YEAR 13-14, WITH PROOF OF PAYMENT OF TAX
U/S. 8(C)(I) OF THE KVAT ACT.
P1(C): TRUE COPY OF ANNUAL E-RETURN DATED 15-12-2015 SUBMITTED IN
FORM NO.10D FOR THE YEAR 14-15, WITH PROOF OF PAYMENT OF TAX
U/S. 8(C)(I) OF THE KVAT ACT.
P2: TRUE COPY OF SUMMONS DATED 13.05.2015 ISSUED TO PETITIONER BY
2ND RESPONDENT CALLING BOOKS OF ACCOUNTS FOR THE YEARS
2011-2012 TO 2014-2015.
P3: TRUE COPY OF PROCEEDINGS DATED 18.06.2015 U/S.74 FOR
THE YEAR 2011-2012 ISSUED TO THE PETITIONER BY 2ND RESPONDENT.
P3(A): TRUE COPY OF PROCEEDINGS DATED 18.06.2015 U/S.74 FOR
THE YEAR 2012-2013 ISSUED TO THE PETITIONER BY 2ND RESPONDENT.
P3(B): TRUE COPY OF PROCEEDINGS DATED 18.06.2015 U/S.74 FOR
THE YEAR 2013-2014 ISSUED TO THE PETITIONER BY 2ND RESPONDENT.
P3(C): TRUE COPY OF PROCEEDINGS DATED 18.06.2015 U/S.74 FOR
THE YEAR 2014-2015 ISSUED TO THE PETITIONER BY 2ND RESPONDENT.
P4: TRUE COPY OF NOTICE DATED 26.11.2015 ISSUED TO PETITIONER BY
1ST RESPONDENT PROPOSING TO CANCEL THE PERMISSION TO PAY
TAX U/S.8(C) GRANTED EARLIER FOR 2011-2012.
P4(A): TRUE COPY OF NOTICE DATED 26.11.2015 ISSUED TO PETITIONER BY
1ST RESPONDENT PROPOSING TO CANCEL THE PERMISSION TO PAY
TAX U/S.8(C) GRANTED EARLIER FOR 2012-2013.
P4(B): TRUE COPY OF NOTICE DATED 26.11.2015 ISSUED TO PETITIONER BY
1ST RESPONDENT PROPOSING TO CANCEL THE PERMISSION TO PAY
TAX U/S.8(C) GRANTED EARLIER FOR 2013-2014.
WP(C).No. 3510 of 2016 (K)
----------------------------------------
P4(C): TRUE COPY OF NOTICE DATED 26.11.2015 ISSUED TO PETITIONER BY
1ST RESPONDENT PROPOSING TO CANCEL THE PERMISSION TO PAY
TAX U/S.8(C) GRANTED EARLIER FOR 2014-2015.
P5: TRUE COPY OF REQUEST DATED 10.12.2015 SUBMITTED BEFORE
1ST RESPONDENT FOR REVISING RETURN TO PAY ADMITTED TAX
U/S.6(2) FOR 2011-2012, BASED ON EXT.P3.
P5(A): TRUE COPY OF REQUEST DATED 10.12.2015 SUBMITTED BEFORE
1ST RESPONDENT FOR REVISING RETURN TO PAY ADMITTED TAX
U/S.6(2) FOR 2012-2013, BASED ON EXT.P3(A).
P5(B): TRUE COPY OF REQUEST DATED 10.12.2015 SUBMITTED BEFORE
1ST RESPONDENT FOR REVISING RETURN TO PAY ADMITTED TAX
U/S.6(2) FOR 2013-2014, BASED ON EXT.P3(B).
P5(C): TRUE COPY OF REQUEST DATED 10.12.2015 SUBMITTED BEFORE
1ST RESPONDENT FOR REVISING RETURN TO PAY ADMITTED TAX
U/S.6(2) FOR 2014-2015, BASED ON EXT.P3(C).
P6: TRUE COPY OF REPLYDATED 17.12.2015 SUBMITTED AGAINST EXT.P4
NOTICE, BEFORE 1ST RESPONDENT.
P6(A): TRUE COPY OF REPLYDATED 17.12.2015 SUBMITTED AGAINST EXT.P4(A)
NOTICE, BEFORE 1ST RESPONDENT.
P6(B): TRUE COPY OF REPLYDATED 17.12.2015 SUBMITTED AGAINST EXT.P4(B)
NOTICE, BEFORE 1ST RESPONDENT.
P6(C): TRUE COPY OF REPLYDATED 17.12.2015 SUBMITTED AGAINST EXT.P4(C)
NOTICE, BEFORE 1ST RESPONDENT.
P7: TRUE COPY OF ORDER DATED 22.12.2015 ISSUED TO PETITIONER
ON 15.01.2016 IN CANCELLING PERMISSION TO PAY TAX U/S.8(C)(I)
GRANTED EARLIER FOR 2011-2012.
P7(A): TRUE COPY OF ORDER DATED 22.12.2015 ISSUED TO PETITIONER
ON 15.01.2016 IN CANCELLING PERMISSION TO PAY TAX U/S.8(C)(I)
GRANTED EARLIER FOR 2012-2013.
P7(B): TRUE COPY OF ORDER DATED 22.12.2015 ISSUED TO PETITIONER
ON 15.01.2016 IN CANCELLING PERMISSION TO PAY TAX U/S.8(C)(I)
GRANTED EARLIER FOR 2013-2014.
P7(C): TRUE COPY OF ORDER DATED 22.12.2015 ISSUED TO PETITIONER
ON 15.01.2016 IN CANCELLING PERMISSION TO PAY TAX U/S.8(C)(I)
GRANTED EARLIER FOR 2014-2015.
P8: TRUE COPY OF NOTICE DATED 02.01.2016 ISSUED TO PETITIONER
ON 15.01.2016 BY 1ST RESPONDENT U/S.25(1), PROPOSING BEST
JUDGMENT ASSESSMENT FOR THE YEAR 2011-2012.
WP(C).No. 3510 of 2016 (K)
----------------------------------------
P8(A): TRUE COPY OF NOTICE DATED 02.01.2016 ISSUED TO PETITIONER
ON 15.01.2016 BY 1ST RESPONDENT U/S.25(1), PROPOSING BEST
JUDGMENT ASSESSMENT FOR THE YEAR 2012-2013.
P8(B): TRUE COPY OF NOTICE DATED 02.01.2016 ISSUED TO PETITIONER
ON 15.01.2016 BY 1ST RESPONDENT U/S.25(1), PROPOSING BEST
JUDGMENT ASSESSMENT FOR THE YEAR 2013-2014.
P8(C): TRUE COPY OF NOTICE DATED 02.01.2016 ISSUED TO PETITIONER
ON 15.01.2016 BY 1ST RESPONDENT U/S.25(1), PROPOSING BEST
JUDGMENT ASSESSMENT FOR THE YEAR 2014-2015.
RESPONDENT(S)' EXHIBITS :
-------------------------------------------
NIL
//TRUE COPY//
P.A.TO JUDGE.
Msd.
A.K.JAYASANKARAN NAMBIAR, J.
===========================================
W.P.(C). No. 3510 of 2016
=====================================================
Dated this the 1st day of February, 2016
JUDGMENT
The challenge in the writ petition is against Exts.P7 to P7(c) orders passed by the 1st respondent cancelling the option of payment of tax under compounded rate, granted to the petitioner for the assessment years 2011-12 to 2014-15 under Section 8(C) of the Kerala Value Added Tax Act, hereinafter referred to as the KVAT Act. There is also a challenge against Ext.P8 series of notices issued to the petitioner under Section 25(1) of the KVAT Act to the extent they propose completion of the assessment in relation to the petitioner on best judgment basis. The grievance of the petitioner in the writ petition is two fold. On the one hand, he would point out that the cancellation of the permission to pay tax on compounded basis was effected solely for the reason that the petitioner had not paid a portion of the admitted tax due under Section 6(2) of the KVAT Act, after having compounded the offence of non payment of that tax during the relevant assessment years in terms of Section 74 of the KVAT Act. Counsel for the petitioner submits that in terms of Section 22(10) of the KVAT Act, the dealer has an option of filing a revised return, incorporating therein details of the amounts that he had not paid by way of tax, and on the said returns being filed, the assessment should be completed by -2- W.P.(C). No. 3510 of 2016 taking into account even these payments, which the petitioner has made subsequently. It is therefore, the contention of the petitioner that the marginal delay occasioned in approaching the respondents for revising the returns in accordance with Section 22 (10) of the KVAT Act, should be condoned and Exts.P7 series of orders set aside. Secondly, the petitioner would contend that, even if the permission for paying tax on compounded basis is cancelled, the respondents would necessarily, while completing the assessment under Section 25(1) of the KVAT Act, have to give input tax credit/rebate of the tax paid by the petitioner under Sections 6(1) and 6(2) of the KVAT Act. It is the apprehension of the petitioner that, while adjudicating the matter pursuant to Ext.P8 series of notices, the 1st respondent will not give credit/rebate to the petitioner, of the taxes paid under Sections 6 (1) and 6(2) of the KVAT Act. It is the further contention of the petitioner that the petitioner would also have to be given credit of the tax paid by him on compounded basis, while completing the assessment under Section 25(1) of the KVAT Act.
2. I have heard the learned counsel appearing for the petitioner as also the learned Government Pleader appearing for the respondents.
-3- W.P.(C). No. 3510 of 2016
3. On a consideration of the facts and circumstances of the case as also the submissions made across the bar, I find that in respect of the amounts towards purchase tax that had to be paid by the petitioner in respect of certain purchases effected by him during the assessment years in question, the petitioner had compounded the offence of non payment of tax under Section 6(2) departmentally under section 74 of the KVAT Act. Although these amounts are not exorbitant, and the petitioner had paid the purchase tax in respect of the majority of the transaction, the fact remains that the entire purchase tax liability under Section 6(2) was not initially discharged by the petitioner. No doubt, the petitioner had compounded the offence departmentally, and by virtue of the provisions of Section 22(10) of the KVAT Act, the petitioner had an option of filing a revised return within three months from the date of the compounding order, so as to include even the amounts inadvertently omitted, in the returns to be filed before the authorities. I note in this connection, that the first communication by the petitioner to the respondents, brining to their notice the fact of non filing of returns and seeking a permission to file revised returns in accordance with Section 22 (10) of the KVAT Act, was made only through Exts.P5 series of letters dated 10.12.2015. This was admittedly beyond the period of three months, that is granted under Section 22(10) of the KVAT -4- W.P.(C). No. 3510 of 2016 Act. Inasmuch as the petitioner did not comply with this requirement of filing revised returns in respect of the tax amount not paid under Section 6(2), I cannot find fault with Exts.P7 series of orders passed by the 1st respondent under Section 8(C) of the KVAT Act read with Rule 11(6) of the KVAT Rules, cancelling the permission granted to the petitioner for payment of tax under compounded rate. The challenge in the writ petition against the said order, therefore fails and is accordingly, rejected.
As regards the apprehension of the petitioner with regard to the manner of completion of the assessment proceedings pursuant to Exts.P8 series of notices, I am of the view that the respondent assessing authority would have to consider the specific claim of the petitioner for the grant of input tax credit/rebate of taxes paid under Sections 6(1) and 6(2) of the KVAT Act, and also give credit to the payments effected by the petitioner, while paying tax on compounded basis before the passing of Exts.P7 series of orders, while completing the assessments pursuant to Exts.P8 series of notices. The learned counsel for the petitioner has an apprehension that the proceedings will be completed with undue haste and without hearing the petitioner. Taking note of the said apprehension of counsel for the petitioner, I make it clear that the respondent assessing authority shall complete the proceedings -5- W.P.(C). No. 3510 of 2016 pursuant to Exts.P8 series of notices, only after giving the petitioner two weeks time from the date of receipt of a copy of this judgment, to prefer a detailed reply to Ext.P8 series of notices, and considering his objections on merits at the time of the personal hearing to be granted to the petitioner. The respondent assessing authority shall also take note of the contention of counsel for the petitioner that there is no pattern of suppression noticed in the instant case. The 1st respondent assessing authority shall pass orders consequent to Exts.P8 series of notices, after observing the aforementioned procedural formalities, within a period of two months from the date of receipt of a copy of this judgment.
Sd/-
A.K.JAYASANKARAN NAMBIAR JUDGE das /01.02.2016