Kerala High Court
M/S.Sherin Builders vs The Commercial Tax Officer (Wc) ... on 10 June, 2024
Author: P Gopinath
Bench: P Gopinath
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE GOPINATH P.
THURSDAY, THE 6TH DAY OF JUNE 2024 / 16TH JYAISHTA, 1946
WP(C) NO. 34374 OF 2015
PETITIONER/S:
M/S.SHERIN BUILDERS
NEW KAVITHA AUTOMOBILES, CBE ROAD, PALAKKAD,
REPRESENTED BY L. SALEEM, MANAGING PARTNER
BY ADVS.
SMT.MEERA V.MENON
RESPONDENT/S:
1 THE COMMERCIAL TAX OFFICER (WC)
DEPARTMENT OF COMMERCIAL TAXES,
PALAKKAD 678 001
2 THE STATE OF KERALA
REPRESENTED BY ITS SECRETARY, TAXES DEPARTMENT,
GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM 695 001
BY ADVS.
DR. THUSHARA JAMES, SR. GOVERNMENT PLEADER
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
06.06.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C) NO. 34374 OF 2015 2
JUDGMENT
Petitioner has approached this Court, challenging Exts.P3 and P3(a) orders of assessment (for the assessment years 2007-08 and 2008-09 respectively) under the Kerala Value Added Tax Act, 2003 (hereinafter referred to as 'the Act').
2. The petitioner is stated to be engaged in the construction and sale of apartments. For the assessment years 2007-08 and 2008-09, the petitioner was issued with Exts.P1 and P1 (a) pre-assessment notices, to which the petitioner submitted Exts.P2 to P2(b) replies. The Assessing Authority, through Exts.P3 and P3(a) orders, completed the assessment. A reading of Exts.P3 and P3(a) will show that, during the relevant years, the petitioner was not a registered dealer and that since the petitioner was engaged in the construction and sale of apartments, after giving the exemption under Rule 10(2) of the Kerala Value Added Tax Rules, the assessable turn over of the petitioner for the relevant years have been arrived at.
3. Learned counsel appearing for the petitioner would submit that Exts.P1 and P1(a) notices and Exts.P3 and P3(a) orders proceed on the basis of the law laid down by the Supreme Court in WP(C) NO. 34374 OF 2015 3 M/s. Larsen & Toubro Limited and Another V. State of Karnataka and Another; [(2014) 1 SCC 708] [judgment in Civil Appeal No.8672 of 2013]. It is submitted that the said judgment has been considered by a Five Judge Bench of the Supreme court in Kone Elevator India Pvt. Ltd., V. State of Tamil Nadu and Others [(2014) 71 VST 1 (SC); (2014) 7 SCC 1]. It is submitted that the notices were also barred by limitation as they were issued beyond the time prescribed in Section 25(1) of the Act. Learned counsel appearing for the petitioner also submits that the sale in question was a sale of immovable property and therefore there is no question of any tax being levied on such transactions under the provisions of the Act.
4. Learned Senior Government Pleader appearing for the respondents would submit that the question of limitation does not arise for consideration in this case as it is admitted that during the year 2007-08 and 2008-09, the petitioner had not taken out any registration. It is pointed out that the limitation prescribed in Section 25(1) of the Act will apply only to the registered dealers and not to unregistered dealers, like the petitioner. It is submitted that the decision in Kone Elevator (Supra) does not come to the aid of the petitioner as the issue in Kone Elevator (supra) was WP(C) NO. 34374 OF 2015 4 completely different to the issue arising for consideration in the facts of this case. It is submitted that Kone Elevator (supra) only decides that a contract for supply of a lift cannot be seen as a 'contract for sale' of goods, which are included in the supply and it can only be seen as a works contract. It is submitted that, in the facts of the present case the assessment has been completed as a 'works contract' and the petitioner cannot therefore, had any grievance in the matter. It is also submitted that the contention taken by the learned counsel appearing for the petitioner that the flats were sold after completion, is a question of fact to be decided by the competent authorities and as can be seen from the impugned orders of assessment, the petitioner had failed to produce any document to substantiate that the sale was only sale of immovable property and there was no works contract element in the matter.
5. Having heard the learned counsel appearing for the petitioner and the learned Senior Government Pleader appearing for the respondents, I am of the view that the petitioner has not made out any case for interference with Exts.P3 and P3 (a) orders in exercise of writ Jurisdiction under Article 226 of the Constitution of India. The contention of the petitioner that the WP(C) NO. 34374 OF 2015 5 assessment was completed beyond the time, cannot be accepted as during the years 2007-08 and 2008-09 [in respect of which the assessment was completed by Exts.P3 and P3(a)], the petitioner was not a registered dealer. Therefore, the proceedings cannot be said to be barred by limitation. Coming to the question as to whether the petitioner had sold the flats after completion, as immovable property, or whether there was any element of works contract involved, this is a pure question of fact to be decided by the competent authority on the basis of the materials to be placed before it. The impugned assessment orders state that though petitioner was given sufficient opportunity to produce materials in support of the contention that there was only sale of immovable property, the petitioner had failed to produce the same. That being the position, no ground has been made out for interference with the impugned assessment orders notwithstanding the availability of an effective alternative remedy.
In the light of the above findings, the writ petition will stand dismissed, making it clear that, if the petitioner files an appeal before the Appellate Authority against Exts.P3 and P3(a) orders, within a period of one month from the date of receipt of a certified copy of this judgment, those appeals shall be treated as one filed WP(C) NO. 34374 OF 2015 6 in time and shall be disposed of by the Appellate Authority, in accordance with the law and being untrammelled by any observations contained in this judgment. It will be open to the petitioner to file an application for stay of recovery pursuant to Exts.P3 and P3(a) orders of assessment. If any such applications for stay is filed along with the appeals, the recovery proceedings pursuant to Exts.P3 and P3(a) shall be kept in abeyance till orders are passed on the stay petitions. It will be open to the petitioner to produce all materials before the Appellate Authority in support of its contention that the transaction was only sale of immovable property and if any such materials are placed before the Appellate Authority, the Appellate Authority shall take into consideration such materials also while taking a decision on the appeals. I make it clear that I have not expressed any opinion on the merits on the petitioner's claim and it will be open to the Appellate Authority to decide the matter, in accordance with the law.
Sd/-
GOPINATH P. JUDGE ajt WP(C) NO. 34374 OF 2015 7 APPENDIX OF WP(C) 34374/2015 PETITIONER EXHIBITS EXHIBIT P1 COPY OF THE NOTICE ISSUED FOR THE YEAR 2007- 08 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER .
EXHIBIT P1(a) COPY OF THE NOTICE ISSUED FOR THE YEAR 2008- 09 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER .
EXHIBIT P2 COPY OF THE REPLY FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT.
EXHIBIT P2(a) COPY OF THE REPLY FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT.
EXHIBIT P2(b) COPY OF THE REPLY FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT.
EXHIBIT P3 COPY OF THE ORDER ISSUED BY THE 1ST
RESPONDENT FOR THE YEAR 2007-08 .
EXHIBIT P3(a) COPY OF THE ORDER ISSUED BY THE 1ST
RESPONDENT FOR THE YEAR 2008-09.