Kerala High Court
Kerala Steel Traders Association vs State Of Kerala on 21 July, 2012
Author: P.R.Ramachandra Menon
Bench: P.R.Ramachandra Menon
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON
TUESDAY,THE 23RD DAY OF SEPTEMBER 2014/1ST ASWINA, 1936
WP(C).No. 11901 of 2014 (K)
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PETITIONER(S):
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1. KERALA STEEL TRADERS ASSOCIATION,
THOMAS TOWER, IST FLOOR, HMC LINE,
NEAR PULLEPADY RAILWAY GATE, LISIE HOSPITAL ROAD,
ERNAKULAM, KOCHI - 682 018,
REPRESENTED BY ITS SECRETARY,
SRI.K.M. MOHAMMED SAGEER.
2. KERALA MERCHANTS UNION,
MERCHANTS UNION BUILDINGS, MERCHANTS UNION ROAD,
ERNAKULAM - 682 031,
REPRESENTED BY ITS GENERAL SECRETARY - G. GOPAL SHENOI.
3. RUPESH AND COMPANY,
40/6633, SHENOY ESTATE, T.D. ROAD,
ERNAKULAM - 682 035,
REPRESENTED BY ITS PARTNER JITHESH R. SHENOY.
4. A.S. METALS,
MUSLIM STREET, KOCHI - 35,
REPRESENTED BY ITS PARTNER SHIHAB K.A.
BY ADVS.SRI.V.V.ASOKAN (SR.)
SRI. JAIKRISHNA R.
RESPONDENT(S):
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1. STATE OF KERALA,
REPRESENTED BY ITS CHIEF SECRETARY, SECRETARIAT,
THIRUVANANTHAPURAM - 695 001.
2. COMMISSIONER OF COMMERCIAL TAXES,
OFFICE OF THE COMMISSIONER OF COMMERCIAL TAXES,
8TH FLOOR, KARAMANA, THIRUVANANTHAPURAM - 695 002.
3. JOINT COMMISSIONER I,
OFFICE OF THE JOINT COMMISSIONER, KARAMANA,
THIRUVANANTHAPURAM - 695 002.
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WP(C).No. 11901 of 2014 (K)
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4. DEPUTY COMMISSIONER,
COMMERCIAL TAXES, ERNAKULAM - 682 015.
5. DEPUTY COMMISSIONER (INTELLIGENCE),
COMMERCIAL TAXES, ERNAKULAM - 682 015.
BY SPECIAL GOVERNMENT PLEADER SRI.GEORGE MECHERIL
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
23-09-2014 ALONG WITH WP(C) 17161/2014 & WP(C) 12730/2014,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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WP(C).No. 11901 of 2014 (K)
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APPENDIX
PETITIONER(S)' EXHIBITS
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EXHIBIT-P1-TRUE COPY OF THE CIRCULAR NO. 21/2012 DATED 21/07/2012.
EXHIBIT-P2-TRUE COPY OF THE CIRCULAR NO.25/2012 DATED 27/09/2012.
EXHIBIT-P3-TRUE COPY OF THE CIRCULAR NO. 30/2012 DATED 29/12/2012.
EXHIBIT-P4-TRUE COPY OF THE CIRCULAR NO.3/2013 DATED 01/04/2013.
EXHIBIT-P5-TRUE COPY OF THE CIRCULAR NO. 8/2014 DATED 22/04/2014.
EXHIBIT-P6-TRUE COPY OF THE REPRESENTATION SUBMITTED BY THE
IST PETITIONER BEFORE THE 2ND RESPONDENT DATED 25/04/2014.
RESPONDENT(S)' EXHIBITS
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NIL
/TRUE COPY/
P.S. TO JUDGE
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P.R. RAMACHANDRA MENON, J.
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W.P.(C). Nos. 11901, 12730 & 17161 of 2014
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Dated this the 23rd day of September, 2014
JUDGMENT
The Circulars issued by the Commissioner of Commercial Taxes insisting for 'digitally signed' Form 15 declaration, procured online, to support the transportation of the goods dealt with by the petitioners ('Timber' in W.P.(C). Nos. 17161 and 12730 and 'Steel' in the other case) are under challenge in these writ petitions.
2. The petitioner in W.P.(C). No. 17161 of 2014 is an individual dealer and the challenge raised by him is against Ext.P6 Circular bearing No. 8/2014 dated 22.4.2014. It is stated that the course stipulated by the Commissioner as per the impugned Circular to have digitally signed Form 15 is not practical, to be followed in the case of the persons like the petitioners in the other two cases; who are engaged in the field of timber business; particularly procuring the same from deep in the woods/forest. It is sated that the spot like 'Kulathupuzha Forest Depot' is situated nearly 75 km away from the nearest town i.e., Punalur and there is no internet facility at Kulathupuzha. If the petitioner is insisted to produce digitally W.P.C. Nos.11901, 17161 & 12730 of 2014 -2- signed Form 15 in compliance with Ext.P6 Circular, every time the petitioner will have to travel all the way through the forest to reach the Punalur town and such other places depending upon the contract/place of work/transaction, which will adversely affect the rights and interest of the persons like the petitioner and hence the challenge. It is also pointed out that, the Commissioner has adopted a discriminative stand in so far as, some of the dealers trading 'Cement' and 'Rubber' stand excluded from satisfying the requirement under Ext.P6. This in turn has been brought to the notice of the 1st respondent/Commissioner by submitting Ext.P5 representation, which however has been kept in cold storage and hence the writ petition.
3. Coming to the grievance of the petitioners in W.P.(C) No. 12730 of 2014, the learned counsel for the petitioners projects the grievance of the merchants engaged in timber sale in general by virtue of the consequence resulted due to the change to the 'e-platform'. It is stated that the change was brought originally by Ext.P1 Circular dated 21.7.2012, whereby it was brought into force with effect from 1.08.2012 onwards, however, permitting the dealers to follow the course manually as well, till 30.09.2012, because of the time required during the transition W.P.C. Nos.11901, 17161 & 12730 of 2014 -3- period to meet the requirements. As per the very same Circular, some dealers engaged in the trade of 'latex/rubber' stand excluded; in spite of the fact that, they also trade the notified goods as in the case of the petitioners. Implementation of Ext.P1 Circular was subsequently extended by a further period till 31.12.2012, as per Ext.P2 dated 27.09.2012, followed by subsequent extension as per Ext.P3 dated 29.12.2012, till 31.3.2013. In the meanwhile, pursuant to the 'Budget speech' for the year 2013-14, Ext.P4 Circular was issued on 1.4.2013, deciding the implementation to be kept in abeyance. It was thereafter, that Ext.P5 Circular came to be issued on 22.4.2014, deciding to implement Ext.P1, however, granting exemption in respect of 'Rubber and Latex' dealers. According to the petitioners, there is absolutely no rhyme or reason to adopt such a discriminative stand, which made the petitioners to submit Ext.P6 representation, which is still to be acted upon by the Commissioner. It is also brought to the notice of this Court, with reference to Ext.P7 produced along with I.A. No. 10335 of 2014, that similar grievance projected by the dealers engaged in the trade of 'Hides and Skin' also stand exempted as per Ext.P7 Circular dated 10.07.2014.
W.P.C. Nos.11901, 17161 & 12730 of 2014 -4-
4. The petitioners in W.P.(C).No. 11901 of 2014 are the Traders Association, Merchants Union and other affected parties who mainly challenge the correctness and sustainability of Ext.P5 Circular dated 22.04.2014 referring to the instance of discrimination and hardships being felt by them, because of the change brought about. They have also made an attempt to challenge the legality of said Circular with reference to the authority and jurisdiction of the Commissioner to have issued the same. It is pointed out that, their grievance is also projected by way of Ext.P6 representation preferred before the Commissioner.
5. Heard the learned counsel for the petitioners as well as the learned Special Government Pleader appearing for the respondent/Revenue at length.
6. During the course of hearing, the learned counsel for the petitioners submits that the only power that is vested with the Commissioner to have issued the impugned Circular, is 'Section 3' of the KVAT Act, which could be made use of only for giving effect to the provisions of the Act. Then reference is made to Section 46(3) as to the establishment of check posts, and documents to accompany in the transport, also making a reference to Rule 58(16) as to the course to be pursued with W.P.C. Nos.11901, 17161 & 12730 of 2014 -5- regard to the filing of the form and such other materials to be given, to sustain a valid transport. It is stated that the requirement under Rule 58(16) cannot be implemented and it will stand frustrated because of the change to 'e-platform' and the requirement now sought to be given effect to, as per the impugned Circular. The learned counsel also makes a reference to Section 88(e) of the Act, whereby the service of notice by 'e-mail' to the assessee, is also stated as an acceptable mode of service for the purpose of giving effect to the provisions of the Act, which according to the petitioners is not correct or sustainable and will invite serious consequences,
7. The learned Special Government Pleader submits that the idea and understanding of the petitioners in W.P.(C). No. 12730 of 2014 with regard to the legality and sustainability of the Circular and the power and jurisdiction of the Commissioner is quite wrong and misconceived in all respects. In response to the submission made by the learned counsel for the petitioners that there is 'no provision' in the statute, but for Section 3, reference is made to 'Section 93 A' of the Act, which is brought into force by virtue of the amendment in the year 2012. The said provision reads as follows:
W.P.C. Nos.11901, 17161 & 12730 of 2014 -6-
"93A. Electronic filing and payment:- (1) The Government may require the assessees to file returns, forms and other statements to be submitted by him under this Act and make the payment of tax, fee or other amounts due under this Act, electronically through the official website of the Commercial Taxes Department.
(2) Notwithstanding anything contained in section 92, the Commissioner may, for the purpose of implementation of electronic filing of returns, forms and other statements or electronic payment of tax, fee or other amounts, by notification in the Gazette, make suitable modifications in the forms prescribed under this Act and make necessary changes in the manner of submission and authentication of such returns, forms and other statements. The modifications or changes so made shall be published in the website of the Commercial Taxes Department also and in such other manner as the Commissioner may deem fit."
There is no answer to the change brought about in the statute book.
8. This Court had occasion to consider the scope of power vested with the Commissioner to issue Circular under different circumstances to meet the requirements under the statute, especially with regard to the fixation of 'floor rate' for collection of advance tax under Section 16(A) of the Act. The decision in favour of the Revenue (rendered by me) was upheld by the Division Bench of this Court as per judgment dated 27.1.2010 in W.A. No. 2412 of 2009.
W.P.C. Nos.11901, 17161 & 12730 of 2014 -7-
9. In the above circumstances, this Court finds that the challenge raised by the petitioners in the concerned writ petition with regard to the power and jurisdiction of the Commissioner to have issued the Circular fails and the said plea is rejected.
10. The petitioners in W.P.(C). No. 11901 of 2014 has got a similar case, citing an instance of discrimination, as put forth in paragraph '11' of the writ petition, referring to the transportation of goods through railway wagons. The learned counsel for the petitioner submits that the difficulty brought to the notice of the Commissioner by the dealers of Cement industry has already been considered and the said dealers stand exempted, enabling them to transport goods under manual Form 15. Same circumstances are equally applicable to the 'steel industry' as well, who bring the goods through railway wagon, submits the learned counsel. Reference is made to the complaints/grievance/difficulties brought to the notice of authorities at different points of time by the dealers from different corners as referred to in the Circulars. But the exemption has been given only to the dealers in 'Rubber' and 'Cement' industry. It is further brought to the notice of this Court that, the petitioner association/Union has projected their W.P.C. Nos.11901, 17161 & 12730 of 2014 -8- grievance again before the Commissioner by submitting Ext.P6, which is still to be acted upon.
11. After hearing both the sides, while sustaining the power and jurisdiction of the Commissioner to have issued the relevant Circular, this Court directs the Commissioner to consider the grievance of the petitioners as per the relevant representations in the concerned writ petitions, as to the practical difficulty, especially with reference to the non availability of internet facility at the relevant place and also as to the transportation of goods through the railway wagons and pass appropriate orders in accordance with law. This shall be done after affording an opportunity of hearing to the petitioners in a representative capacity and the proceedings shall be finalized at the earliest, at any rate, within 'six weeks' from the date of receipt of a copy of this judgment.
The petitioners shall produce a copy of the judgment along with a copy of the concerned writ petition before the competent authority for further steps. The writ petitions are disposed of.
P.R. RAMACHANDRA MENON, JUDGE.
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