Kerala High Court
Zigma Power Line vs The Authority To Issue Clarification on 27 November, 2013
Author: Antony Dominic
Bench: Antony Dominic
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE ANTONY DOMINIC
&
THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU
MONDAY, THE 5TH DAY OF SEPTEMBER 2016/14TH BHADRA, 1938
OT.Appeal.No.11 of 2016 ()
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AGAINST THE JUDGMENT IN C3 23011/2013/CT of COMMR. OF COMMERCIAL
TAXES, TRIVANDRUM DATED 27-11-2013
APPELLANT/3RD PARTY:
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ZIGMA POWER LINE
MARS COMPLEX, POOTHOLE,
THRISSUR,
REP. BY ITS MANAGING PARTNER SURESH.M.
BY ADVS.SRI.K.M.FIROZ
SRI.SAHEER IBRAHIM
SRI.S.KANNAN
SRI.TONY CHACKO
SMT.UMMUL FIDA
RESPONDENTS:
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1. THE AUTHORITY TO ISSUE CLARIFICATION
UNDER SECTION 94 OF THE KVA ACT,
REP. BY TH COMMISSIONER OF COMMERCIAL TAXES,
PUBLIC OFFICE BUILDING, THIRUVANANTHAPURAM-695 001
2. THE STATE OF KERALA,
REP. BY THE SECRETARY TO GOVERNMENT
TAXES DEPARTMENT, SECRETARIAT,
THIRUVANANTHAPURAM - 695 001
3. THE COMMERCIAL TAX OFFICER (WORKS CONTRACT)
OFFICE OF THE DEPUTY COMMISSIONER,
DEPT. OF COMMERCIAL TAXES, THRISSUR- 680 004
4. THE ASSISTANT COMMISSIONER (APPEALS)
COMMERCIAL TAXES DEPARTMENT,
THRISSUR - 680 001
5. DEPUTY TAHSILDAR (REVENUE RECOVERY)
THISSUR-20.
BY GOVERNMENT PLEADER SRI.MOHAMMED RAFIQ
THIS OTHER TAX APPEAL HAVING BEEN FINALLY HEARD ON
05-09-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
OTA No.11 of 2016
APPENDIX
ANN.A1 TRUE COPY OF THE CLARIFICATION ORDER DATED 27.11.2013
ISSUED BY THE AUTHORITY FOR CLARIFICATION UNDER SECTION
94 OF THE KVAT Act.
ANN.A2 TRUE COPY OF THE PROPOSAL NOTICE DATED 16.1.2016 FOR
THE ASSESSMETN YEAR 2009-10 ISSUED BY THE COMMERCIAL TAX
OFFICER (WORKS CONTRACT), THRISSUR-680 004.
ANN.A3 TRUE COPY OF THE ORDER DATED 8.3.2016 FOR THE
ASSESSMENT YEAR 2009-2010 CANCELLING THE COMPOUNDING
PERMISSION GRANTED ISSUED BY THE COMMERCIAL TAX
OFFICER (WORKS CONTRACT), THRISSUR - 680 004.
ANN.A4 TRUE COPY OF THE ORDER DATED 8.3.2016 FOR THE
ASSESSMENT YEAR 2010-2011 CANCELLING THE COMPOUNDING
PERMISSION GRANTED ISSUED BY THE COMMERCIAL TAX
OFFICER (WORKS CONTRACT), THRISSUR 680 004.
ANN.A5 TRUE COPY OF THE ASSESSMENT ORDER DTD.15.3.2016 FOR
THE ASSESSMENT YEAR 2009-2010 ISSUED BY THE
COMMERCIAL TAX OFFICER (WORKS CONTRACT), THRISSUR-680004
ALONG WITH DEMAND NOTICE.
ANN.A6 TRUE COPY OF THE ASSESSMENT ORDER DATED 15.3.2016 FOR
THE ASSESSMENT YEAR 2010-2011 ISSUED BY THE COMMERCIAL
TAX OFFICER (WORKS CONTRACT), THRISSUR - 680 004
ALONG WITH DEMAND NOTICE.
ANN.A7 TRUE COPY OF THE APPEAL MEMORANDUM DATED 13.4.2016
FILED BY THE APPELLANT AGAINST THE CANCELLATION ORDER
DATED 8.3.2016 FOR THE ASSESSMENT YEAR 2009-2010
BEFORE THE ASSISTANT COMMISSIONER (APPEALS), THRISSUR.
ANN.A8 TRUE COPY OF THE APPEAL MEMORANDUM DATED 13.4.2016
FILED BY THE APPELLANT AGAINST THE CANCELLATION ORDER
DATED 8.3.2016 FOR THE ASSESSMENT YEAR 2010-2011
BEFORE THE ASSISTANT COMMISSIONER (APPEALS), THRISSUR.
ANN.A9 TRUE COPY OF THE APPEAL MEMORANDUM DATED 20.4.2016
FILED BY THE APPELLANT AGAINST THE ASSESSMENT ORDER
DATED 15.3.2016 FOR THE ASSESSMENT YEAR 2009-2010
BEFORE THE ASSISTANT COMMISSIONER (APPEALS), THRISSUR.
ANN.A10 TRUE COPY OF THE APPEAL MEMORANDUM DATED 20.4.2016
FILED BY THE APPELLANT AGAINST THE ASSESSMENT ORDER
DATED 15.3.2016 FOR THE ASSESSMETN YEAR 2010-2011
BEFORE THE ASSISTANT COMMISSIOENR (APPEALS), THRISSUR.
ANN.A11 TRUE COPY OF THE RELEVANT EXTRACT OF ORDER NO.
C3/23011/13/CT DATED 27.11.2013 AS PUBLISHED IN
KERALA TAX REPORTER 2015(23) KTR 53 (statutes).
True copy
P.S.TO JUDGE
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Antony Dominic & Dama Seshadri Naidu, JJ.
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OTA No.11 of 2016
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Dated this the 5th day of September, 2016
JUDGMENT
Antony Dominic, J.
This appeal involves challenge against Annexure- A1, a clarification order dated 27.11.2013 issued by the first respondent in exercise of its power under Section 94 of the KVAT Act.
2. The appellant is an Electrical Contractor and a dealer under the KVAT Act. For the assessment years 2009-2010 and 2010-2011, the appellant had opted for payment of tax at compounded rates. The application was allowed and the tax due was also paid. Subsequently on 16.1.2016, Annexure-A2 notice was issued by the third respondent placing reliance on Annexure A1 order under Section 94 of the KVAT Act, proposing to cancel the order permitting the appellant to pay tax at compounded rates and to complete the assessment under Section 25 of the OTAPNo.11 of 2016 2 said Act. Though the appellant objected to the proposal, Annexures A3 and A4 orders were issued cancelling the orders permitting compounding. Later, Annexures A5 and A6 were also issued completing assessment for the aforesaid two years under Section 25 of the KVAT Act.
3. It is also seen that challenging Annexures A3 & A4 orders and Annexures A5 and A6 orders of assessment, the appellant has filed Annexures A7 to A10 appeals before the 4th respondent, the Appellate Authority. Though Annexure A1 order under Section 94 was passed at the instance of yet another assessee, having regard to the provisions of the KVAT Act, making such an order binding on the assessing authority, the appellant has filed this appeal.
4. In the appeal, the main contention raised by the learned counsel for the appellant is that Annexure-A1 order of clarification was issued entirely placing reliance on the Apex Court judgment in the case of State of A.P. v Kone Elevators (India) Ltd.1.
The said judgment has been subsequently overruled by 1 2005(3) SCC 389 OTAPNo.11 of 2016 3 the Apex Court in its judgment in Kone Elevators India (P) Ltd. v State of Tamilnadu.2 (2014) 7 SCC 1. Therefore, according to the appellant, Annexure-A1 order of clarification is illegal and cannot be relied on against the appellant and that therefore, Annexures A3 to A6 are liable to be vacated.
5. On the other hand, the learned Government Pleader submitted that the applicant, at whose instance Annexure-A1 order was passed, himself had filed OTA No.2 of 2014 and that by judgment dated 6.2.2014, this Court has dismissed the appeal. It is also stated that the judgment of the Apex Court in State of A.P. v Kone Elevators (India) Ltd. is only prospective in nature and that therefore, the proceedings initiated against the appellant are to be decided in accordance with the law.
6. We heard the learned counsel for the appellant and the learned Government Pleader appearing for the respondents.
7. Having heard the learned counsel for both sides, we find from Annexure-A1 itself that this order has been 2 (2014) 7 SCC 1 OTAPNo.11 of 2016 4 issued by the Government entirely placing reliance on the law laid down by the Apex Court in State of A.P. v Kone Elevators (India) Ltd. Admittedly, that judgment of the Apex Court has been reversed by a larger Bench of the Apex Court in its subsequent judgment in Kone Elevators India (P) Ltd. v State of Tamilnadu (supra). In that judgment, the Apex Court has also clarified thus:
"207. Keeping in view the conclusions of the majority, expressed in the judgment of Dipak Misra, J., it is held that the decision rendered in State of A.P. V Kone Elevators, 2005(3) SCC 389 does not correctly lay down the law and it is accordingly overruled.
208. It is directed that the show-cause notices, which have been issued by taking recourse to reopening of assessment, shall stand quashed. The assessment orders which have been framed and are under assail before this Court are set aside. It is necessary to state here that where the assessments have been framed and have attained finality and are not pending in appeal, they shall be treated to have been closed, and where the assessments are challenged in appeal or revision, the same shall be decided in accordance with the decision rendered by us."
8. In the light of the above, irrespective of Annexure- A1 and the judgment of this Court in OTA No.2 of 2014, Annexures A7 to A10 appeals pending before the 4th respondent are required to be disposed of applying the law as laid down by the Apex Court in its judgment in Kone Elevators India (P) Ltd. v State of Tamilnadu (supra).
OTAPNo.11 of 2016 5 Therefore, this appeal is disposed of directing that the 4th respondent shall dispose of Annexures A7 and A8 appeals filed by the appellant against Annexures A3 and A4 orders and Annexures A9 and A10 appeals filed against Annexures A5 and A6 assessment orders, duly adverting to the principles laid down in the judgment of the Apex Court in Kone Elevators India (P) Ltd. v State of Tamilnadu (supra). It is also ordered that recovery of the amounts, if any due under Annexures A5 and A6 will stand stayed till the appeals are disposed of as directed above.
The appellant is directed to produce a copy of the judgment before the 4th respondent for information and compliance.
sd/- Antony Dominic, Judge
sd/- Dama Seshadri Naidu, Judge
css/ true copy
P.S.TO JUDGE