Judgment
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE THE CHIEF JUSTICE MR.S.V.N.BHATTI & THE HONOURABLE MR.JUSTICE BASANT BALAJI TUESDAY, THE 11TH DAY OF JULY 2023 / 20TH ASHADHA, 1945 RP NO. 147 OF 2023 AGAINST THE JUDGMENT ST.Rev. 33/2019 OF HIGH COURT OF KERALA REVIEW PETITIONER/S:
M/S VINAYAKA TIMBER AND WOOD CRAFTS, REPRESENTED BY MANAGING PARTNER PRAKASH SARMA, AGED 49 YEARS ANANDAPPALLY P.O, ADOOR, PIN - 691523
BY ADV JOHNSON GOMEZ
RESPONDENT/S:
STATE OF KERALA REPRESENTED BY DEPUTY COMMISSIONER(LAW) COMMERCIAL TAXES DEPARTMENT, ERNAKULAM, PIN - 682015 OTHER PRESENT:
SPL GP MOHAMMED RAFIQ
THIS REVIEW PETITION HAVING COME UP FOR ADMISSION ON 11.07.2023, ALONG WITH RP.155/2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
R.P. Nos. 147 and 155/2023
-2-
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE THE CHIEF JUSTICE MR.S.V.N.BHATTI & THE HONOURABLE MR.JUSTICE BASANT BALAJI TUESDAY, THE 11TH DAY OF JULY 2023 / 20TH ASHADHA, 1945 RP NO. 155 OF 2023 AGAINST THE JUDGMENT ST.Rev. 34/2019 OF HIGH COURT OF KERALA REVIEW PETITIONER/S:
VINAYAKA TIMBER AND WOOD CRAFTS, REPRESENTED BY MANAGING PARTNER PRAKASH SARMA, AGED 49 YEARS ANANDAPPALLY P.O, ADOOR, PIN - 691523
BY ADV JOHNSON GOMEZ
RESPONDENT/S:
STATE OF KERALA, REPRESENTED BY THE DEPUTY COMMISSIONER(LAW) COMMERCIAL TAXES DEPARTMENT, ERNAKULAM, PIN - 682002 OTHER PRESENT:
SPL GP MOHAMMED RAFIQ
THIS REVIEW PETITION HAVING COME UP FOR ADMISSION ON 11.07.2023, ALONG WITH RP.147/2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
R.P. Nos. 147 and 155/2023
-3-
O R D E R [RP Nos.147/2023, 155/2023] S.V.N. Bhatti, C.J.
M/s. Vinayaka Timber and Wood Crafts/ a dealer registered under the KGST Act/ respondent in S.T. Revision Nos.33 and 34/2019, is the review petitioner. For convenience and continuity, we refer to the parties as the ‘dealer’ and the ‘State’. The subject matter relates to the returns filed for 2000- 01 and 2001-02. To appreciate the error of law pointed out by the dealer, the following events are considered chronologically in R.P. No. No.14/2023 in S.T. Revision No.33/2019.
2.
The Commercial Tax Officer, Adoor, by Annexure A order dated 30.03.2007, determined the turnover and the tax payable by the dealer. The State Legislature enacted the
R.P. Nos. 147 and 155/2023
-4-
Kerala Finance Act 2008 (Act 21 of 2008). Section 23B was introduced after Section 23AA to the Kerala General Sales Tax Act 1963. Section 23B sub-section (7) reads thus:
“(7) If the amount settled under this provision has been a subject matter of appeal or revision, such appeal and revision may be continued, and if the final orders of such appeal or revision results in the reduction of tax payable under this Act, the amount so reduced shall be refunded. But if, as the result of such appeal or revision, the tax payable under this Act is enhanced, the dealer shall pay such enhanced amount, with interest thereon, in accordance with the provisions of this Act.”
2.1 The dealer, on 26.12.2009, filed an appeal before the Deputy Commissioner, Kottayam, and for the subject years, the First Appellate Authority modified the order of Commercial Tax Officer, Adoor. The dealer carried the matter in Second Appeal to the Tribunal, and the Tribunal allowed the appeal. Hence, S.T. Revision No.33/2019 was filed at the instance of the State.
3.
By the judgment under Review, we have taken the
R.P. Nos. 147 and 155/2023
-5-
view that once the dealer opted for the settlement of tax disputes under an Amnesty scheme introduced under Act No.
21 of 2008, the dealer cannot re-agitate the very disputes covered by the Orders made under the Amnesty Scheme.
Therefore, re-visiting an issue settled by the Amnesty Order is unavailable. In the aforesaid view, we have set aside the orders of the Tribunal and the First Appellate Authority.
Hence, the review petitions at the instance of the dealer.
4.
Advocate Mr Johnson Gomez argues that Section 23B(7) can be considered as a standalone provision because though a subsequent Finance Act provided for Amnesty, the provisions for Amnesty in the subsequent enactments do not provide for continuing the subject matter settled through Amnesty Orders. He commends the Court to interpret Section 23B(7) to preserve or protect the right to continue the proceedings already initiated by the dealer. There is no bar in
R.P. Nos. 147 and 155/2023
-6-
the scheme accepted by the Finance Act 21 of 2008. He relies on Assistant Commissioner (Assessment) v. Martin and Harris Pvt.
Ltd1 and Assistant Commissioner (KVAT) v. ACC Limited2 to contend that ex post facto continuation of orders of the Assessing Officer is available. Therefore, the non- consideration of Section 23B(7) is an error apparent on the face of the record and prays for allowing the review by setting aside the order dated 22.09.2022 in S.T. Revision No.33/2019.
5.
Special Government Pleader Mr Mohammed Rafiq argues that this Court can avoid taking the trouble of interpreting Sub-section (7) of Section 23B of the Act. The circumstances of the case disentitle the dealer from enabling Section 41(7)(b) of the GST Act, which provides for review in very few and stringent circumstances, and the case on hand does not attract any one of the situations spelt out by Section
1 Judgment dated 05.03.2010 in W.A. No.298/2010 2 Judgment dated 03.07.2014 in W.A. Nos.1807 & 1828/2013 and WP(C) No.4808/2010
R.P. Nos. 147 and 155/2023
-7-
41(7)(b) of the Act.
5.1 He further contends that the interpretation now commended by the dealer is against the fundamental first principle of literal interpretation, and for continuing litigation notwithstanding orders in an Amnesty scheme, the sine qua non is that the amount settled under this provision, i.e., Section 23B has been a subject matter of appeal or revision.
The continuation of such appeal or revision is available both to the dealer and the State only if what has been settled through the Amnesty order is the subject matter of appeal or revision. Adverting to the case’s circumstances, he argues that the application was made on 30.09.2008. On 30.10.2008 order under the Amnesty scheme was passed. The dealer, on 26.12.2009, filed an appeal before the Deputy Commissioner (Appeals). Therefore, by the plain meaning of Section 23B(7) of the Act, the appeal or revision was not pending regarding
R.P. Nos. 147 and 155/2023
-8-
the subject matter settled under the Amnesty Scheme.
Therefore, the question of continuance does not arise. He distinguishes the judgments relied on by the dealer and argues that the ratio is not applicable and further Section 23B(7) has to be interpreted by this Court. He prays for dismissing the review petitions.
6.
We take note of the contentions made at the Bar.
The jurisdiction of the Court reviewing its order is well settled by the principles laid down by the Supreme Court. Firstly, we note that the review comprehends the jurisdiction of Section 41(7)(b) of the KGST Act as a moot question and a detailed examination would give an answer against the dealer. We could have recorded a finding on those lines; since an argument in Section 23B(7) is stated with considerable force, we will examine the same as follows:
6.1 The golden rule of interpretation means that the
R.P. Nos. 147 and 155/2023
-9-
words of a Statute must prima facie be given their literal and natural meaning and that the language of the Section is read as it is. Applying the said interpretative tool, Sub-section (7) of Section 23B means that (a) the amount settled under Section 23B has been a subject matter of appeal or revision; (b) such appeal and revision may be continued and if the final orders of such appeal or revision results in the reduction of tax payable under this Act; (c) so the tax received more than legally payable will be refunded.
6.2 In the case of the State, if the appeal or revision is allowed, the excess amount to be collected from the dealer is collected. The sine qua non for operating the last two stages referred to above is that the amount settled has been a subject matter of appeal or revision. The protection under Section 23B(7) cannot be logically extended to appeal and revision filed ex-post to the Amnesty order. For the above view, it is
R.P. Nos. 147 and 155/2023
-10-
sufficiently clear that the precedents on which the dealer relied are distinguishable, both in law and fact.
From the above discussions, we consider that no ground is made out warranting interference with our judgment dated 22.09.2022 in S.T. Revision Nos.33 and 34 of 2019. The Reviews fail, hence dismissed.
Sd/- S.V.N.BHATTI CHIEF JUSTICE
Sd/- BASANT BALAJI JUDGE jjj
R.P. Nos. 147 and 155/2023
-11-
APPENDIX OF RP 155/2023
PETITIONER ANNEXURES AnnexureRA1 A TRUE COPY OF THE FINANCE ACT 2008 AS NOTIFIED IN THE KERALA GAZETTE VOL LIII NO. 1630 DATED 29.07.2008 AnnexureRA2 A COPY OF THE FINANCE ACT 2013 AS NOTIFIED IN THE KERALA GAZETTE VOL II NO. 2150 DATED 23.07.2013
R.P. Nos. 147 and 155/2023
-12-
APPENDIX OF RP 147/2023
PETITIONER ANNEXURES Annexure RA1 A TRUE COPY OF THE FINANCE ACT, 2008, AS NOTIFIED IN THE KERALA GAZETTE VOL LIII NO. 1630 DATED 29.07.2008 Annexure RA2 A TRUE COPY OF THE FINANCE ACT 2013 AS NOTIFIED IN THE KERALA GAZETTE VOL II NO. 2150 DATED 23.07.2013