Kerala High Court
M/S.Amal Granite Metals vs The Commercial Tax Officer, Ottapalam on 4 July, 2024
Author: P Gopinath
Bench: P Gopinath
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE GOPINATH P.
THURSDAY, THE 4TH DAY OF JULY 2024 / 13TH ASHADHA, 1946
WP(C) NO. 29206 OF 2016
PETITIONER:
M/S.AMAL GRANITE METALS,
KADAMBUR P.O., AMBALAPARA, OTTAPALAM,
PALAKKAD-679 515,REPRESENTED BY ITS MANAGING PARTNER,
SHRI.T.SULAIMAN.
BY ADVS.
SRI.GEORGE KUTTY MATHEW
SRI.C.JOSEPH ANTONY
RESPONDENTS:
1 THE COMMERCIAL TAX OFFICER, OTTAPALAM,
OTTAPALAM P.O., PALAKKAD-679 101.
2 THE DEPUTY TAHSILDAR (R.R),
OFFICE OF TAHSILDAR, OTTAPALAM, OTTAPALAM P.O.,
PALAKKAD-679 101.
BY SRI. ARUN AJAY SHANKAR (GP)
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
04.07.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C) NO. 29206 OF 2016
2
JUDGMENT
The petitioner is a partnership firm, which was engaged in running a metal crusher unit at Kadambur near Ambalapara in Ottapalam Taluk of Palakkad District. It was a registered dealer under the Kerala Value Added Tax Act, 2003 (hereinafter referred to as 'the 2003 Act') and was paying tax under the compounding provisions contained in Section 8 of the 2003 Act from the inception. According to the petitioner, it had only one secondary crusher unit in its unit till the year 2012-13 and therefore, the orders permitting compounding were issued on that basis.
2. The learned Senior Counsel appearing for the petitioner would submit that in terms of the provisions applicable to compounding in respect of metal crusher units, an application for compounding is to be made each year before 30 th of April and in the application, the number, capacity and size of each of the machines installed in the metal crusher unit have to be attached and in case any additional machinery is installed, the details thereof have to be furnished to the assessing officer within 15 days of installation and thereafter, the assessing officer is to revise the amount of compounded tax payable as the compounding in the WP(C) NO. 29206 OF 2016 3 case of metal crusher units is dependent on the size and capacity of the machineries employed in that unit. It is submitted that though the petitioner had installed certain additional machineries in the year 2013-14, owing to objections from the local people, the petitioner could not operate the metal crusher unit. Reference is made in this regard to Ext.P2 communication issued by the Sub Inspector of Police, Ottapalam Police Station as also to Ext.P3 letter issued by the Secretary, Ambalappara Grama Panchayat. It is stated that though the petitioner approached this Court for police protection and though police protection was granted, the petitioner could not restart its activities and from 07.02.2014, the unit was lying closed. According to the petitioner, it was thereafter served with orders of assessment under Section 25 of the 2003 Act as also with orders imposing penalty under Section 67(d) of the said Act for the years 2009-10 to 2012-13 on the allegation that the petitioner had suppressed the existence of certain machineries while obtaining permission for paying compounded tax for the aforesaid years. These orders are placed on record along with the writ petition as Exts.P4, P4 series, P5, P5 series, P6, P6 series, P7 and P7 series. It is the submission of the learned Senior Counsel appearing for the petitioner that the petitioner received no notice WP(C) NO. 29206 OF 2016 4 prior to the issuance of the orders of assessment and the orders of penalty. It is stated that Ext.P8 is the notice allegedly issued to the petitioner and Ext.P9 is a copy of the acknowledgment card showing receipt of the notice by the petitioner. It is submitted that a perusal of Exts.P8 and P9 will show that the notice was addressed to the closed unit of the petitioner and was seen as received by one P.S.Kumar by authorization. It is submitted that the petitioner has not given any authorization to the aforesaid P.S.Kumar and the petitioner was not even aware of the issuance of Ext.P8 notice and it became aware of the proceedings only when copies of the impugned orders of assessment / penalty were served.
3. The learned Government Pleader would submit that the petitioner is not entitled to any relief in the writ petition. It is submitted that there were clear materials to show that the petitioner had suppressed the existence of certain machineries while applying for and obtaining orders permitting payment of tax at compounded rates in terms of the provisions contained in Section 8 of the 2003 Act. It is submitted that compounding for persons engaged in the business of metal crusher units is on the basis of the size and capacity of the machines and when it is found WP(C) NO. 29206 OF 2016 5 that there is clear suppression of the size, number and capacity of the machines, it was open to the Department to proceed to complete assessment and also to demand penalty on the basis that wrong information had been furnished to obtain permission for compounding. It is submitted that Ext.P8 was addressed to the business premises of the petitioner and was sent by registered post and was received by one P.S.Kumar. It is submitted that the petitioner cannot feign ignorance of the issuance of the notice. It is submitted that in such circumstances, the petitioner is not entitled to any relief in the writ petition and if the petitioner is in any manner aggrieved by the impugned orders of assessment / penalty, it is for the petitioner to avail any statutory remedies that may be open to him.
Having heard the learned Senior Counsel appearing for the petitioner and the learned Government Pleader appearing for the respondents, I am of the view that the petitioner is entitled to succeed. It is clear from the pleadings in the writ petition and this is not disputed by the respondents that the unit of the petitioner stopped functioning with effect from 07.02.2014. Exts.P8 and P9 will show that the notice proposing to initiate assessment proceedings and penalty were served at the business premises of WP(C) NO. 29206 OF 2016 6 the petitioner on 13.10.2015. The acknowledgment card does not show that any responsible officer or any partner of the petitioner firm had actually received the notice. It only shows that the notice was received by one Kumar claiming to have an authorization from the petitioner. There is no material to suggest that any such authorization had been given by the petitioner to the aforesaid P.S.Kumar. I am therefore of the view that this is a case where it must be held that the impugned orders were issued in violation of the principles of natural justice. The petitioner was not afforded a proper opportunity to file objections to the proposal and to contend that no fresh assessment can be completed against it and no orders imposing penalty can be imposed in the facts and circumstances of the case. Thus on the short ground that the impugned orders were issued in violation of principles of natural justice, those orders have to be set aside. The plea of alternate remedy taken by the learned Government Pleader cannot be sustained as one of the situations where the Rule of alternate remedy will not bar a writ petition is a case where the impugned orders are issued in violation of principles of natural justice. In that view of the matter, the writ petition is allowed. Exts.P4, P4 series, P5, P5 series, P6, P6 series, P7 and P7 series are quashed. WP(C) NO. 29206 OF 2016 7 The matter is remitted to the file of the competent authority, who shall pass fresh orders, after affording an opportunity of hearing to the petitioner and after affording to it an opportunity of filing its objections to Ext.P8 notice. The competent authority shall pass fresh orders as directed above, within a period of three months from the date of receipt of a certified copy of this judgment.
Sd/-
GOPINATH P. JUDGE DK WP(C) NO. 29206 OF 2016 8 APPENDIX OF WP(C) 29206/2016 PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF THE ORDER GIVING CONSENT TO OPERATED STONE CRUSHER DATED 13.9.2012.
EXHIBIT P2 TRUE COPY OF THE ORDER ISSUED BY THE
SUB INSPECTOR, OTTAPALAM, DATED
07.02.2014.
EXHIBIT P3 TRUE COPY OF THE LETTER ISSUED BY THE
SECRETARY, AMBALAPARA GRAMA
PANCHAYATH, DATED 30.4.2014.
EXHIBIT P4 TRUE COPY OF THE ASSESSMENT ORDER FOR
THE YEAR 2009-2010 DATED 1.7.2016.
EXHIOBIT P4(A) TRUE COPY OF THE DEMAND NOTICE
DEMANDING THE TAX ASSESSED WITH
INTEREST DATED 4.7.2016.
EXHIBIT P4(B) TRUE COPY OF THE ORDER OF THE PENALTY
UNDER SECTION 67(1)(D) OF KERALA VALUE ADDED TAX ACT IN RESPECT OF THE YEAR 2009-2010 DATED 1.7.2016.
EXHIBIT P4(C) TRUE COPY OF THE DEMAND NOTICE
DEMANDING THE PENALTY AMOUNT IN
RESPECT OF THE YEAR 2009-2010 DATED
4.7.2016.
EXHIBIT P5 TRUE COPY OF THE ASSESSMENT ORDER FOR
THE YEAR 2010-2011 DATED 1.7.2016.
EXHIBIT P5(A) TRUE COPY OF THE DEMAND NOTICE
DEMANDING THE TAX ASSESSMENT FOR THE
YEAR 2009-2010 WITH INTEREST DATED
4.7.2016.
EXHIBIT P5(B) TRUE COPY OF THE ORDER OF PENALTY
UNDER SECTION 67(1)(d) OF THE KERALA
VALUE ADDED TAX ACT IN RESPECT OF THE
YEAR 2010-2011 DATED 1.7.2016.
EXHIBIT P5(C) TRUE COPY OF THE DEMAND NOTICE
DEMANDING PENALTY AMOUNT IN RESPECT OF THE YEAR 2010-2011 DATED 4.7.2016.
EXHIBIT P6 TRUE COPY OF THE ASSESSMENT ORDER FOR THE YEAR 2011-2012 DATED 1.7.2016.
EXHIBIT P6(A) TRUE COPY OF THE DEMAND NOTICE DEMANDING THE TAX ASSESSMENT FOR THE YEAR 2011-2012 DATED 4.7.2016.
EXHIBIT P6(B) TRUE COPY OF THE ORDER OF PENALTY UNDER SECTION 67(1)(D) OF THE KERALA WP(C) NO. 29206 OF 2016 9 VALUE ADDED TAX ACT IN RESPECT OF YEAR 2011-2012 DATED 1.7.2016.
EXHIBIT P6(C) TRUE COPY OF THE DEMAND NOTICE DEMANDING PENALTY AMOUNT IN RESPECT OF THE YEAR 2011-2012 DATED 4.7.2016.
EXHIBIT P7 TRUE COPY OF THE ASSESSMENT ORDER FOR THE YEAR 2012-2013 DATED 1.7.2016.
EXHIBIT P7(A) TRUE COPY OF THE DEMAND NOTICE DEMANDING THE TAX ASSESSMENT FOR THE YEAR 2012-2013 DATED 4.7.2016.
EXHIBIT P7(B) TRUE COPY OF THE ORDER OF PENALTY UNDER SECTION 67(1)(D) OF THE KERALA VALUE ADDED TAX ACT IN RESPECT OF YEAR 2012-2013 DATED 1.7.2016.
EXHIBIT P7(C) TRUE COPY OF THE DEMAND NOTICE DEMANDING PENALTY AMOUNT IN RESPECT OF THE YEAR 2012-2013 DATED 4.7.2016.
EXHIBIT P8 TRUE COPY OF THE NOTICE ISSUED TO THE PETITIONER BY THE RESPONDENT DATED 12.10.2015.
EXHIBIT P9 TRUE COPY OF THE ACKNOWLEDGMENT CARD. EXHIBIT P10 TRUE COPY OF THE RECTIFICATION APPLICATION IN RESPECT OF THE YEAR 2009-2010 DATED 14.7.2016.
EXHIBIT P11 TRUE COPY OF THE RECTIFICATION APPLICATION IN RESPECT OF YEAR 2010- 2011 DATED 14.7.2016.
EXHIBIT P12 TRUE COPY OF THE RECTIFICATION APPLICATION IN RESPECT OF THE YEAR 2011-2012 DATED 14.7.2016.
EXHIBIT P13 TRUE COPY OF THE RECTIFICATION APPLICATION IN RESPECT OF THE YEAR 2012-2013 DATED 14.7.2016.
EXHIBIT P14 TRUE COPY OF THE RECTIFICATION APPLICATION IN THE PENALTY ORDER FILED IN RESPECT OF THE YEAR 2009-2010 DATED 14.7.2016.
EXHIBIT P15 TRUE COPY OF THE RECTIFICATION APPLICATION IN THE PENALTY ORDER FILED IN RESPECT OF THE YEAR 2010-2011 DATED 14.7.2016.
EXHIBIT P16 TRUE COPY OF THE RECTIFICATION APPLICATION IN THE PENALTY ORDER FILED IN RESPECT OF THE YEAR 2011-2012 DATED 14.7.2016.
EXHIBIT P17 TRUE COPY OF THE RECTIFICATION WP(C) NO. 29206 OF 2016 10 APPLICATION IN THE PENALTY ORDER FILED IN RESPECT OF THE YEAR 2012-2013 DATED 14.7.2016.
EXHIBIT P18 TRUE COPY OF THE DEMAND NOTICE ISSUED
UNDER SECTION 7 OF THE REVENUE
RECOVERY ACT BEARING FILE
NO.2016/8855/9/400 DATED 6.8.2016.
EXHIBIT P18(A) TRUE COPY OF THE DEMAND NOTICE ISSUED
UNDER SECTION 34 OF THE REVENUE
RECOVERY ACT BEARING FILE
NO.2016/8855/9/400 DATED 6.8.2016.
EXHIBIT P19 TRUE COPY OF THE DEMAND NOTICE ISSUED
UNDER SECTION 7 OF THE REVENUE
RECOVERY ACT BEARING FILE
NO.2016/8854/9/400 DATED 6.8.2016.
EXHIBIT P19(A) TRUE COPY OF THE DEMAND NOTICE ISSUED
UNDER SECTION 34 OF THE REVENUE
RECOVERY ACT BEARING FILE
NO.2016/8854/9/400 DATED 6.8.2016.
EXHIBIT P20 TRUE COPY OF THE DEMAND NOTICE ISSUED
UNDER SECTION 7 OF THE REVENUE
RECOVERY ACT BEARING FILE
NO.2016/8853/9/400 DATED 6.8.2016.
EXHIBIT P20(A) TRUE COPY OF THE DEMAND NOTICE ISSUED
UNDER SECTION 34 OF THE REVENUE
RECOVERY ACT BEARING FILE
NO.2016/8853/9/400 DATED 6.8.2016.
RESPONDENTS EXHIBITS:
EXHIBIT R1(A) TRUE COPY OF THE ACKNOWLEDGEMENT DATED 13.10.2015.