Kerala High Court
M/S Josco Fashion Jewelers vs State Of Kerala on 25 September, 2016
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
MONDAY, THE 10TH DAY OF JULY 2017/19TH ASHADHA, 1939
WP(C).No. 32456 of 2016 (F)
----------------------------
PETITIONER:
-----------
M/S JOSCO FASHION JEWELERS,
RAJIV GANDHI SHOPPING COMPLEX,
KOTTAYAM, REPRESENTED BY ITS PROPRIETOR,
SRI. P.A.JOSE.
BY ADVS.SRI.A.KUMAR
SRI.P.J.ANILKUMAR
SMTG.MINI(1748)
SRI.P.S.SREE PRASAD
RESPONDENT(S):
--------------
1. STATE OF KERALA,
REP. BY TAXES SECRETARY,GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM-695001.
2. COMMISSIONER OF COMMERCIAL TAXES,
THIRUVANANTHAPURAM-695001.
3. ASSISTATANT COMMISSIONER (KVAT)
SPECIAL CIRCLE, KOTTAYAM-686001.
BY GOVERNMENT PLEADER SRI SHAMSUDHEEN
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 10-07-2017, ALONG WITH WPC.28/2017, AND CONNECTED CASES
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
K.V.
WP(C).No. 32456 of 2016 (F)
----------------------------
APPENDIX
PETITIONER(S)' EXHIBITS
-----------------------
EXHIBIT P1 TRUE COPY OF THE REGISTRATION CERTIFICATE UNDER THE
KVAT ACT DATED 25.9.2016.
EXHIBIT P2 TRUE COPY OF THE APPLICATION FOR COMPOUNDING FOR THE
ASSESSMENT YEAR 2013-14.
EXHIBIT P3 TRUE COPY OF THE PERMISSION FOR COMPOUNDING FOR THE
ASSESSMENT YEAR 2013-14.
EXHIBIT P4 TRUE COPY FO THE APPLICATION FOR COMPOUNDING FOR THE
ASSESSMENT YEAR 2014-15.
EXHIBIT P5 TRUE COPY OF THE PERMISSION FOR COMPOUNDING FOR THE
ASSESSEMENT YEAR 2014-15.
EXHIBIT P6 TRUE COPY FO THE NOTICE DATED 22.8.2016 FOR THE
ASSESSMENT YEAR 2013-14.
EXHIBIT P7 TRUE COPY OF THE NOTICE DATED 22..8.2016 FOR THE
ASSESSMENT YEAR 2014-15.
EXHIBIT P8 A TRUE COPY OF THE REPLY DATED 29/9/2016
EXHIBIT P9 A TRUE COPY OF THE CIRCULAR NO.42/2006
EXHIBIT P10 A TRUE COPY OF THE CIRCULAR NO 38/2008
DATED 18/9/2008.
RESPONDENT(S)' EXHIBITS NIL
-----------------------
/TRUE COPY/
P.S.TO JUDGE
K.V.
A.K.JAYASANKARAN NAMBIAR, J.
.............................................................
W.P.(C).No.32456 of 2016, W.P.(C).Nos.28, 59,85,
102, 321, 511, 639, 670, 703, 720, 722, 723, 724,
728, 729, 730, 731, 732, 804, 816, 831, 874, 986,
1001, 1013, 1085, 1086, 1266, 1683 of 2017
&
W.P(C).No.12590 of 2017
.............................................................
Dated this the 10th day of July, 2017
J U D G M E N T
The petitioners in all these writ petitions are dealers in gold ornaments, who had opted for payment of tax on compounding basis under Section 8(f) of the Kerala Value Added Tax Act [hereinafter referred to as the "KVAT Act']. For the assessment years 2013-14 onwards, the Assessing Authorities, while completing the assessments pertaining to the petitioners, took a stand that insofar as the tax payable at the concessional rate under Section 8(f) of the KVAT Act is in lieu of tax on sale, and not in lieu of purchase tax under Section 6(2) of the KVAT Act, the said tax under Section 6(2) would be payable by the dealers on regular basis, and assessed under a regular assessment. In these writ petitions, the pre-assessment notices, the penalty notices, assessment orders and penalty orders issued to the petitioners by -2- W.P.(C).No.32456/16 & connected cases.
the adjudicating authority under the KVAT Act, are called in question, to the extent, they propose the levy of purchase tax under Section 6(2), and imposition of a consequential penalty, on the ground that the payments of tax on compounded basis under Section 8(f) of the KVAT Act, will not exonerate the dealer from the liability to purchase tax under Section 6(2) of the KVAT Act.
2. During the pendency of these writ petitions, the Kerala Finance Act, 2017, was enacted with effect from 1.4.2017. Through the said Act, Section 6(2) of the KVAT Act was amended by inserting the following proviso to Section 6(2)(a), namely, "provided that notwithstanding anything contained in clause (f) of Section 8, a dealer paying compounded tax for the goods mentioned in that clause, shall not be liable to pay tax under this sub section on such goods with effect from 1st April, 2013".
The amendment aforementioned has the effect of clarifying that, dealers paying tax on compounded basis under Section 8(f), need not pay tax under Section 6(2) of the KVAT Act, on the goods in question, with effect from 1.4.2013. In view of the amendment -3- W.P.(C).No.32456/16 & connected cases.
with effect from 1.4.2013, these writ petitions are allowed, by quashing the impugned notices that propose an assessment to purchase tax, the impugned orders, to the extent, they confirm a demand of purchase tax and the impugned penalty orders, to the extent, they are based on the aforementioned assessment orders. The respondent shall do the needful in finalising the assessments and penalty proposals in relation to the petitioners on the basis of the observations in this judgment.
Sd/-
A.K.JAYASANKARAN NAMBIAR JUDGE mns/10.07.17