Kerala High Court
M.U.Gopi vs Intelligence Officer on 18 January, 2012
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 18TH DAY OF JANUARY 2012/28TH POUSHA 1933
WPC.No. 22776 of 2008 (J)
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PETITIONER(S):
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1. M.U.GOPI, PROPRIETOR, INLAND PROPERTIES
AND DEVELOPERS, POONKUNNAM, THRISSUR.
2. INLAND PROPERTIES AND DEVELOPERS,
POONKUNNAM, THRISSUR, REPRESENTED BY ITS
MANAGING PARTNER-M.G.GOPI.
BY ADVS.SRI.K.I.MAYANKUTTY MATHER
SRI.P.P.RAMACHANDRAN
RESPONDENT(S):
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1. INTELLIGENCE OFFICER, SQUAD NO.III,
TRICHUR.
2. COMMERCIAL TAX OFFICER, (WC & CT),
TRICHUR.
BY SENIOR GOVERNMENT PLEADER SRI.S.SUDHISH KUMAR
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
18-01-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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WPC NO. 22776 OF 2008
APPENDIX
PETITIONER'S EXHIBITS:
P1: COPY OF CONSTRUCTION AGREEMENT ENTERED INTO BETWEEN THE PETITIONER
AND THE INTENDING BUYER.
P2: COPY OF THE AGREEMENT FOR SALE ENTERED INTO BETWEEN THE PETITIONER
AND THE INTENDING BUYER
P3: COPY OF THE DETAILS OF AMOUNTS RECEIVED BY THE PETITIONER AND ITS
YEAR WISE BREAK UP DETAILS
P4: COPY OF THE DETAILS OF THE AMOUNTS DISBURSED TO THE SUB
CONTRACTORS.
P5: COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT TO AAYILYAM
CONSTRUCTIONS.
P6: COPY OF ACKNOLEDGEMENT OBTAINED FROM THE OFFICE OF THE
INTELLIGENCE
P7: COPY OF THE LETTER GIVEN BY THE PETITIONERS TO THE INTELLIGENCE
OFFICER (IB) TRICHUR
P7(A):COPY OF THE LETTER GIVEN BY THE PETITIONERS TO THE INTELLIGENCE
OFFICER (IB), TRICHUR
P8: COPY OF THE APPLICATION FOR REGISTRATIONFILED BY THE 1ST
PETITIONER BEFORE THE 2ND RESPONDENT
P9: COPY OF THE RETURN FOR THE ASSESSMENT YEAR 205-2006
P10: COPY OF THE RETURN FOR THE ASSESSMENT YEAR 2006-2007
P11: COPY OF THE RETURN FOR THE ASSESSMENT YEAR 2007-2008
P12: COPY OF THE APPLICATION TO OPT FOR COMPOUNDING METHOD OF
ASSESSMENT
P13: COPY OF THE RECEIPT EVIDENCING PAYMENT OFTAX FOR THE YEAR
2005- 2006
P13(A):COPY OF THE RECEIPT EVIDENCING PAYMENT OF TAX FOR THE YEAR
2006-2007
P13(B):COPY OF THE RECEIPT EVIDENCING PAYMENT OF TAX FOR THE YEAR
2006-2007
contd..3
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P13(C):COPY OF THE RECEIPT EVIDENCING PAYMENT OF TAX FOR THE YEAR
2007-2008
P13(D):COPY OF THE RECEIPT EVIDENCING PAYMENT OF TAX FOR THE YEAR
2007-2008
P13(E):COPY OF THE RECEIPT EVIDENCING REMITTANCE OF TAX FOR THE
ASSESSMENT YEAR 2004-2005
P14: COPY OF APPLICATION SUBMITTED BY THE PETITIONERS BEFORE THE 1ST
RESPONDENT FOR THE YEAR 2004-2005
P14(A):COPY OF APPLICATION SUBMITTED BY THE PETITIONERS BEFORE THE 1ST
RESPONDENT FOR THE YEAR 2005-2005
P14(B):COPY OF APPLICATION SUBMITTED BY THE PETITIONERS BEFORE THE 1ST
RESPONDENT FOR THE YEAR 2006-2007
P14(C):COPY OF APPLICATION SUBMITTED BY THE PETITIONERS BEFORE THE 1ST
RESPONDENT FOR THE YEAR 2007-2008
P15: COPY OF THE RECEIPT EVIDENCING PAYMENT OF THE COMPOUNDING FEE FOR
THE YEAR 2005-2006
P15(A):COPY OF THE RECEIPT EVIDENCING PAYMENT OF THE COMPOUNDING FEE
FOR THE YEAR 2005-2006
P15(B):COPY OF THE RECEIPT EVIDENCING PAYMENT OF THE COMPOUNDING FEE
FOR THE YEAR 2006-07
P15(C):COPY OF THE RECEIPT EVIDENCING PAYMENT OF THE COMPOUNDING FEE
FOR THE YEAR 2007-2008
P16: COPY of the PROCEEDINGS OF THE INTELLIGENCE OFFICER, SQUAD NO. II,
THRISSUR (2004-2005)
P17: COPY OF THE PROCEEDINGS OF THE INTELLIGENCE OFFICER, SQUAD NO.
III, THRISSUR (2005-2006)
P18: COPY OF THE PROCEEDINGS OF THE INTELLIGENCE OFFICER, SQUAD NO. II,
THRISSUR (2006-2007)
P19: COPY OF THE PROCEEDINGS OF THE INTELLIGENCE OFFICER, SQUAD NO.
II, THRISSUR (2007-2008)
P20: COPY OF THE CERTIFICATE OF REGISTRATION
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WPC NO. 22776 OF 2008
P21: COPY OF APPLICATION OF PERMISSION TO OPT PAYMENT OF TAX AT
COMPOUNDED RATES UNDER SECTION 8 OF THE ACT
P21(A):COPY OF THE APPLICATION FOR PERMISSION TO OPT PAYMENT OF TAX AT
COMPOUNDED RATES UNDER SECTION 8 OF THE ACT
P21(B):COPY OF THE APPLICATION FOR PERMISSION TO OPT PAYMENT OF TAX AT
COMPOUNDED RATES UNDER SECTION 8 OF THE ACT.
P22: COPY of the SALE AGREEMENT 16.08.2008
RESPONDENT'S EXHIBITS: NIL
\\TRUE COPY\\
PA TO JUDGE
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K.VINOD CHANDRAN, J
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W.P.C.No.22776 of 2008
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Dated this the 18th day of January, 2012
JUDGMENT
The petitioner is the proprietor of a firm engaged in development of land and construction of flats. Having commenced their business in the year 2004-05, the petitioner admittedly did not take out registration under the KGST Act on commencement nor under the KVAT Act for the subsequent years. On detection by the Intelligence Wing of the Commercial Taxes department, proceedings were initiated against the petitioner for the years 2004-2005 to 2007-08, during which period, the petitioner had been conducting their business without registration and without payment of tax. The petitioner having applied for composition of offence under Section 74 of the KVAT Act and under Section 41 of the KGST Act for one year; the authorities passed Exts P16 to P19 orders computing the actual taxes due from the petitioner for the respective years W.P.C.No.22776 of 2008 2 as also imposing a further amount of Rs.2,00,000/- as provided under the provisions for composition of offence. The petitioner not having availed of the statutory remedies, approached this Court under Article 226 of the Constitution of India, challenging Exts P16 to P19 orders as being wholly without jurisdiction. This Court at the admission stage, granted a stay on condition that the petitioner pay a sum of Rs.15,00,000/-, which the petitioner had complied with.
2. When the matter was taken up, the petitioner's counsel submitted that with respect to regular assessments, the petitioner had filed applications for compounding under Section 8, availing the benefits conferred under Section 15 (B) for the said years under the VAT Act and also under the KGST Act for one year. The counsel for the petitioner raised various contentions regarding the exigibility of tax on the transactions carried on by the petitioner as also the rate of tax applicable and the issue of set off with respect to the W.P.C.No.22776 of 2008 3 tax paid by the sub contractors etc; Further, the petitioner would urge before me that in passing Exts P16 to P19 orders, the respondents have taken into account the land value, which, it is submitted cannot be included in computing the tax due on the works contract. Exts P16 to P19 orders however, does not clearly show the computation or the amounts taken for assessment with reference to the business carried on by the petitioner. This Court cannot go into the facts or refer to the documents evidencing transactions of the petitioner to arrive at a finding regarding the legality of Exts P16 to P19 orders in this proceeding. In fact, better option for the petitioner would have been to approach the statutory authorities, who are the fact finding authorities under the respective enactments. But, taking into account the fact that this Court had admitted the writ petition and granted stay on condition, which condition has been complied with by the petitioner, the petitioner cannot be W.P.C.No.22776 of 2008 4 relegated to the statutory authority at this distance of time. More so, since the original authority has not considered the issue, inter alia, of the payment made by the sub contractors, the value of the land involved in the transaction, the tax payable on declared goods etc, I am of the opinion that the matter can be reconsidered by the first respondent within a time frame. However, since admittedly, the petitioner had carried on the business for more than four years without registration and without payment of tax and also considering the volume of business conducted by the petitioner, I am of the view that the denovo consideration by the first respondent shall be on condition that the petitioner pays a sum of Rs.40,00,000/- towards the tax dues under the KGST Act and KVAT Act. The petitioner also has a contention that they had submitted applications for compounding under Section 8 of the KVAT Act read with Section 15 (B) as also W.P.C.No.22776 of 2008 5 of the KGST Act for the respective years, which have not been considered; probably due to the stay granted by this Court in the above writ petition.
2. In the circumstances, the above writ petition is partly allowed on the following terms and conditions:
1) Exts. P16, 17, 18 and P19 orders to the extent it computes, the tax payable is set aside and the first respondent is directed to consider the same afresh after affording an opportunity to the petitioner.
2) However, the denovo consideration of the first respondent would be subject to the condition that the petitioner deposits an amount of Rs.40,00,000/- in five equal monthly instalments starting from 18/2/2012 and on failure of deposit of any one instalment, the same shall result in W.P.C.No.22776 of 2008 6 revival of Exts.P16 to 19 orders as also demands made thereunder.
3) The compounding applications submitted by the petitioners for the respective years would be considered by the appropriate authority, taking into account the beneficial provision of 15(B) of the KVAT Act in the years in which the same is applicable in accordance with law.
4) The petitioners shall produce a certified copy of the judgment before the first respondent as also before the appropriate authority before whom the compounding applications have been filed and the appropriate authorities shall issue notice to the petitioner after affording them reasonable opportunity for a hearing, orders shall be W.P.C.No.22776 of 2008 7 passed. The entire exercise shall be completed within a period of six months from the date of receipt of a copy of the judgment.
K.VINOD CHANDRAN, JUDGE su