Kerala High Court
K.K.Vikraman vs The Intelligence Officer
Author: A.K.Jayasankaran Nambiar
Bench: A.K.Jayasankaran Nambiar
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR
TUESDAY, THE 4TH DAY OF JULY 2017/13TH ASHADHA, 1939
WP(C).No. 8573 of 2017 (V)
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PETITIONER :
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K.K.VIKRAMAN
PROPRIETOR, M/S.OORJAKENDRAM,
NEAR HOTEL PERIYAR,
BYE PASS JUNCTION, ALUVA,
ERNAKULAM-683 101.
BY ADV. SRI.V.DEVANANDA NARASIMHAM
RESPONDENTS :
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1. THE INTELLIGENCE OFFICER, ERNAKULAM
SQUAD NO.III, COMMERCIAL TAXES,
ERNAKULAM-682 015.
2. THE COMMERCIAL TAX OFFICER (WORKS CONTRACT)
CLAS TOWER, 2N FLOOR,
OLD RAILWAY STATION ROAD,
ERNAKULAM, KOCHI-682 018.
3. THE COMMISSIONER OF COMMERCIAL TAXES
TAX TOWERS, KILLIPALAM,KARAMANA,
THIRUVANANTHAPURAM-695 002.
BY GOVERNMENT PLEADER SRI.SHAMSUDHEEN
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 04-07-2017, THE COURT ON THE SAME
DAY DELIVERED THE FOLLOWING:
bp
WP(C).No. 8573 of 2017 (V)
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APPENDIX
PETITIONER(S)' EXHIBITS
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EXHIBIT P1: TRUE COPY OF ANNUAL RETURN DATED 05-08-15
E-FILED IN KVATIS FOR THE YEAR 2014-15
BEFORE THE 2ND RESPONDENT.
EXHIBIT P2: TRUE COPY OF THE ANNUAL RETURN DATED 29-
06-16 E-FILED IN KVATIS FOR THE YEAR 15-
16 CONCEDING TAXABLE TURNVER OF
RS.13,63,529/-BEFORE 2ND RESPONDENT.
EXHIBIT P3: TRUE COPY OF SHOP INSPECTION REPORT DATED
05-10-15 ISSUED BY 1ST RESPONDENT TO THE
PETITIONER.
EXHIBIT P4: TRUE COPY OF COMPOUNDING ORDER DATED
28-11-15 PASSED BY 1ST RESPONDENT FOR THE
YEAR 14-15 AND RECEIVED BY THE PETITIONER
ON 09-12-16.
EXHIBIT P5: TRUE COPY OF COMPOUNDING ORDER DATED
28-11-15 PASSED BY 1ST RESPONDENT FOR THE
YEAR 15-16 AND RECEIVED BY THE PETITIONER
ON 09-12-16.
EXHIBIT P6: TRUE COPY OF ORDER DATED 30-04-15 PASSED
BY THE AUTHORITY FOR CLARIFICATION U/S 94
OF THE KVAT ACT SPECIFYING THE RATE OF
TAX AS 5% ON WASTE BURNING PLANT.
EXHIBIT P7: TRUE COPY OF PRE-ASSESSMENT NOTICE DATED
19-10-16 ISSUED U/S 25(1) OF THE KVAT ACT
FOR THE YEAR 2014-15 PROPOSING TO RE-OPEN
ASSESSMENT AND TO MAKE BEST JUDGMENT
ASSESSMENT BY 2ND RESPONDENT TO THE
PETITIONER.
EXHIBIT P8: TRUE COPY OF PRE-ASSESSMENT NOTICE DATED
19-10-16 ISSUED U/S 25(1) OF THE KVAT ACT
FOR THE YEAR 2015-16 PROPOSING TO RE-OPEN
ASSESSMENT AND TO MAKE BEST JUDGMENT
ASSESSMENT BY 2ND RESPONDENT TO THE
PETITIONER.
WP(C).No. 8573 of 2017 (V)
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EXHIBIT P9: TRUE COPY OF REPLY DATED 12-12-16
SUBMITTED BEFORE 2ND RESPONDENT ON
14-12-16 FOR THE YEAR 2014-15.
EXHIBIT P10: TRUE COPY OF REPLY DATED 12-12-16
SUBMITTED BEFORE 2ND RESPONDENT ON
14-12-16 FOR THE YEAR 2015-16.
EXHIBIT P11: TRUE COPY OF RECTIFICATION APPLICATION
DTD 12-12-16 FILED U/S 66 OF THE KVAT ACT
BEFORE 1ST RESPONDENT FOR 2014-15.
EXHIBIT P12: TRUE COPY OF RECTIFICATION APPLICATION
DTD 12-12-16 FILED U/S 66 OF THE KVAT ACT
BEFORE 1ST RESPONDENT FOR 2015-16.
EXHIBIT P13: TRUE COPY OF THE ASSESSMENT ORDER DATED
30-12-16 FOR 14-15 PASSED BY 2ND
RESPONDENT U/S 25(1) OF THE KVAT ACT.
EXHIBIT P14: TRUE COPY OF THE ASSESSMENT ORDER DATED
30-12-16 FOR 2015-16 PASSED BY 2ND
RESPONDENT U/S 25(1) OF THE KVAT ACT.
EXHIBIT P15: A COPY OF THE BROACHER OF THE PRODUCTS
FABRCATED BY THE PETITIONER.
EXHIBIT P16: TRUE COPY OF THE CLARIFICATION
NO.C3/22771/14/CT DATED 11-11-2015 ISSUED
BY THE AUTHORITY FOR CLARIFICATION U/S 94
OF THE KVAT ACT RELIED BY 1ST & 2ND
RESPONDENT.
RESPONDENT(S)' EXHIBITS : NIL.
//TRUE COPY//
P.A. TO JUDGE
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A.K.JAYASANKARAN NAMBIAR, J.
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W.P.(C).No.8573 Of 2017 -(V )
.............................................................
Dated this the 4th day of July, 2017
J U D G M E N T
The petitioner, who is a registered dealer under the Kerala Value Added Tax Act (hereinafter referred to as the KVAT Act) engaged in fabrication of Municipal solid Waste Management Equipment and Plant (Wast Burning Plant), is aggrieved by Exts.P13 and P14 assessment orders that have been passed against him, for the assessment years 2014-2015 and 2015-2016. In the writ petition, it is the case of the petitioner that, pursuant to the detection of an offence relating to suppression of details regarding contracts that he had undertaken during the aforesaid years, he had approached the respondents with an application for compounding the offence in terms of Section 74 of the Kerala Value Added Tax Act. The compounding applications were accepted and the offence compounded, and the petitioner was directed to pay tax at the applicable rate for those contracts that were suppressed. A separate compounding fee, equal to the tax liability, was also -2- W.P.(C).No.8573 Of 2017 -(V ) imposed on the petitioner. It is not in dispute that the petitioner has since paid the said tax amount, as also the compounding fee. In the writ petition, the challenge against Exts.P13 and P14 assessment orders is essentially that, while completing the assessment, by including the suppressed turnover pertaining to works contracts, the Assessing Officer has adopted the rate applicable to works contract and not the rate applicable to the item as specified in the IIIrd Schedule to the KVAT Act. The contention of the learned counsel for the petitioner, in other words, is that, the assessing authority erred in subjecting the suppressed turnover to tax at the rate applicable to works contract because, it is the case of the petitioner that the suppressed turnover pertained to sale of individual items and not to any works contract undertaken by the petitioner.
2. I have heard the learned counsel appearing for the petitioner and also the learned Government Pleader appearing for the respondents.
On a consideration of the facts and circumstances of the case -3- W.P.(C).No.8573 Of 2017 -(V ) as also the submissions made across the bar, I find that this is a case where, for the assessment years in question, the petitioner had chosen to opt for the compounded basis for payment of tax under Section 8 (a) (ii) of the KVAT Act, in respect of works contracts, in lieu of the regular method of assessment under Section 6 of the Act. While declaring the works contracts for the years in question, the petitioner had suppressed the turnover relating to certain other works, and it was in connection with these suppressed works that the petitioner preferred an application under Section 74 for compounding the offence. The assessment that followed, for the assessment years in question, took note of the declaration given by the petitioner with regard to the nature of the works undertaken, and it was on finding that the petitioner himself had declared the suppressed turnover as attributable to works contract, and further that, the compounding proceedings under Section 74 were completed on that basis, that the assessments were completed, by applying the rate applicable to works contract to the suppressed turnover that was detected. The additions made against the petitioner in the assessment orders are also on that basis. Inasmuch as the petitioner himself had -4- W.P.(C).No.8573 Of 2017 -(V ) admitted the fact of suppression of works contracts that he had undertaken during the assessment years in question, I am of the view that it is not open to the petitioner to now contend that the suppressed turnover that was detected, pertained to sales of individual items and not to works contracts undertaken by the petitioner. The admission of the petitioner, in the compounding proceedings under Section 74, estopps the petitioner from taking such a stand now. I, therefore, see no reason to interfere with the assessment orders in these proceedings under Article 226 of the Constitution of India, since I do not see the said orders as vitiated by any error of jurisdiction or violation of the principles of natural justice. Resultantly, the writ petition in its challenge against the said assessment orders fail and is accordingly dismissed.
Taking note of the submission of the learned counsel for the petitioner that there are other issues, such as those relating to the additions made in the assessment order, which he would like to agitate before the appellate authority, I direct that the recovery steps for recovery of the amounts pursuant to Exts.P13 and P14 assessment orders shall be kept in abeyance for a period of three -5- W.P.(C).No.8573 Of 2017 -(V ) weeks so as to enable the petitioner to approach the appellate authority under the KVAT Act against the said orders, in the meanwhile.
Sd/-
A.K.JAYASANKARAN NAMBIAR JUDGE mns/4.07.17