Kerala High Court
Satish Warriar (Mg.Director) vs State Of Kerala on 14 August, 2013
Author: K. Vinod Chandran
Bench: K.Vinod Chandran
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN
&
THE HONOURABLE MR. JUSTICE ASHOK MENON
WEDNESDAY, THE 28TH DAY OF FEBRUARY 2018 / 9TH PHALGUNA, 1939
OT.Rev.No. 11 of 2018
AGAINST THE ORDER IN TA(VAT) NO.68/2014 OF THE KERALA VALUE TAX APPELLATE
TRIBUNAL, ERNAKULAM
REVISION PETITIONER/ASSESSEE:
SATISH WARRIAR (MG.DIRECTOR),
M/S.KAAIZEEN MEDITECH(P)LIMITED,
5/206 B1 & B2 KALIASH NAGAR,
TRIKAKARA-682 028.
BY ADV.SRI.K.J.VINCENT (MUNDAMVELI)
RESPONDENT/REVENUE:
STATE OF KERALA
REPRESENTED BY SECRETARY TO GOVERNMENT,
TAXES DEPARTMENT, SECRETARIAT,
THIRUVANANTHAPURAM-695 001.
BY SENIOR GOVERNMENT PLEADER SRI.MOHAMMED RAFIQ
THIS OTHER TAX REVISION (VAT) HAVING COME UP FOR ADMISSION ON 28-02-2018,
THE COURT ON THE SAME DAY PASSED THE FOLLOWING:
OT.Rev.No. 11 of 2018
APPENDIX
ANNEXURE I - COPY OF THE ORIGINAL ASSESSMENT ORDER NO.320718 59414/
2011-12 DATED 14.08.2013 OF THE ASST. COMMISSIONER
SPECIAL CIRCLE-II, ERNAKULAM.
ANNEXURE II - COPY OF THE FIRST APPELLATE ORDER NO.KVATA/2653/13 DATED
25.10.13 OF DEPUTY COMMISSIONER [APPEALS]-II, ERNAKULAM.
ANNEXURE III - COPY OF THE MODIFIED ASSESSMENT ORDER NO.32071859414/
2011-12 DATED 18.01.2014 OF THE ASST. COMMISSIONER
SPECIAL CIRCLE-II, ERNAKULAM.
ANNEXURE IV - COPY OF THE SECOND APPEAL FILED BY THE ASSESSEE DATED
27.01.2014 BEFORE THE KVAT APPELLATE TRIBUNAL, ERNAKULAM.
ANNEXURE V - COPY OF THE APPLICATION FOR RECTIFICATION U/S 66 DATED
03.02.2014 PENDING BEFORE THE INSPECTING AUTHORITY TO
RECONSIDER THE COMPOUNDING BASED ON FACTUAL AND LEGAL
MISCONCEPTIONS.
ANNEXURE VI - COPY OF THE DEPOSIT AGREEMENT DATED 01.01.2013 WITH SREE
CHITRA TIRUNAL INSTITUTE OF MEDICAL SCIENCES, TRIVANDRUM.
ANNEXURE VII- COPY OF THE DECLARATION DATED 06.09.2013 MADE BY
DR.RAJEESH THACHTATHODIYIL, AMRUTHA INSTITUTE OF
MEDICAL SCIENCES, EDAPPALLY.
ANNEXURE VIII- COPY OF THE APPLICATION IN I.A. NO.339/14 DATED 03.07.2014
FILED BY THE REVISION PETITIONER TO EXAMINE EXPERT
WITNESS.
ANNEXURE IX - COPY OF THE ORDER IN I.A. NO.339/14 DATED 13.01.2015
REJECTING PETITION TO EXAMINATION OF EXPERT WITNESS.
ANNEXURE X - COPY OF THE APPLICATION DATED 28.02.2017 SUBMITTED UNDER
REGULATION 51(1) OF KVAT TRIBUNAL ALONG WITH COPIES OF
RECEIPTS ACKNOWLEDGING THE STOCK ISSUED BY VARIOUS
HOSPITALS.
ANNEXURE XI - COPY OF THE DEBIT NOTES AND CREDIT NOTES SUBMITTED
UNDER REGULATION 51(1) OF KVAT TRIBUNAL ALONG WITH
ANNEXURE X APPLICATION DATED 28.02.2017.
ANNEXURE XII- ORIGINAL ORDER IN T.A. NO.68/14 DATED 30.08.2017 OF KERALA
VALUE ADDED TAX APPELLATE TRIBUNAL.
//TRUE COPY//
P.A. TO JUDGE
sp
K. VINOD CHANDRAN & ASHOK MENON, JJ.
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O.T.[Rev] No.11 of 2018
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Dated this the 28th day of February, 2018
O R D E R
K. Vinod Chandran, J.
The petitioner is aggrieved by the additions made by the Assessing Officer as modified by the First Appellate Authority based on a crime file, with respect to an inspection, detection of suppression and compounding effected by the petitioner. The petitioner relies on Velimparambil Hardwares v. State of Kerala [(1994) 92 STC 98 (Ker)] to contend that there is no estoppel against agitating and defending estimations proposed on assessment, merely for reason of the compounding effected of the offences alleged. The assessee O.T.[Rev] No.11 of 2018 2 would be competent to produce sufficient evidence to show that in fact the suppression detected was incorrect or solitary, not capable of basing upon, for further additions.
2. An inspection was carried out in the premises of the assessee and there was a stock variation of Rs.97,19,554/- detected. A compounding application dated 03.12.2012 was filed by the petitioner and the offence compounded on payment of fees of Rupees Four lakhs. The Assessing Officer took note of the compounding effected by the assessee and issued notice, proposing additions on the basis of the suppression detected. Annexure I is the assessment order passed, wherein the actual suppression detected was added to the turnover along with an addition of two times, to cover up O.T.[Rev] No.11 of 2018 3 probable omission and suppression. The petitioner took up the matter in appeal. In Annexure II, the First Appellate Authority modified the addition to Rs.25 lakhs, which is about 1/4th of the actual suppression. An appeal was filed before the Tribunal, which also stood rejected as per Annexure XII. The revision is filed by the assessee contending that despite the compounding effected before the Intelligence Officer, the assessee could challenge the additions proposed; by furnishing substantiating material and even refute the allegations of suppression.
3. Velimparambil Hardwares [supra] was a case in which assessment proceedings were initiated on the basis of the stock variation detected; at two inspections carried on in the period of three O.T.[Rev] No.11 of 2018 4 months, in which the business was functioning in the year of its commencement. On appeal, the Appellate Authority found that the statements filed in the first appeal would indicate certain discrepancies and remanded the matter for further consideration. The Revenue filed an appeal to the Tribunal, in which the order of remand was set aside. The assessment, making additions on the basis of the compounding effected, was upheld. The assessee was before this Court in revision, in which this Court found that there was no material before the First Appellate Authority to find that there were discrepancies, which could lead to a valid challenge against the compounding proceedings. The Tribunal order was upheld and so was the assessment made with additions based on the O.T.[Rev] No.11 of 2018 5 compounding effected.
4. Having rejected the claims of the assessee, the Division Bench considered the finding of the Appellate Tribunal that, when compounding is effected in a crime file, then the assessee would be estopped from denying the same for reason of the admission by reason of the compounding effected. Setting aside the said finding, the Division Bench of this Court said so:
b