Judgment
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN TUESDAY, THE 23RD DAY OF AUGUST 2022 / 1ST BHADRA, 1944 WP(C) NO. 18464 OF 2019 PETITIONER/S:
M/S.INSCAPE DESIGN SOLUTIONS (P) LTD., C4, 40/1067, FIRST FLOOR, MANCHU COMPLEX, P.T.USHA ROAD, COCHIN - 11, REPRESENTED BY ITS MANAGING DIRECTOR, REGI KURIAN.
BY ADVS.
HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENT/S:
1 THE ASSISTANT COMMISSIONER (WC), STATE GST DEPARTMENT, SGST COMPLEX, PERUMANOOR, THEVARA, ERNAKULAM - 682 015.
2 THE INSPECTING ASST. COMMISSIONER, STATE GST DEPT., KAKKANADU, KOCHI - 30.
BY GOVERNMENT PLEADER OTHER PRESENT:
SMT. JASMIIN M.M -GP THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23.08.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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JUDGMENT The writ petition is filed with the following prayers;
“(i) To quash Ext.P3 & P6 orders issued by the 1st respondent by the issue of a writ of certiorari or such other writ or order or direction.
(ii)To grant the petitioner such other incidental reliefs including the costs of these proceedings.” 2. The petitioner, an assessee under the Kerala Value Added Taxes Act, 2003, (for short, “the KVAT Act”) on the rolls of the 1st respondent engaged in execution of works contracts, was issued with Ext.P1 notice for the assessment year, 2016-17, under Section 25(1) of the KVAT Act. The main addition proposed as per Ext.P1 notice was the proposal at paragraph No.15 of the notice. The said addition was made on the basis of an inspection conducted by the Intelligence Squad No.III at the petitioner's premises, in which certain documents were obtained, which
revealed
receipt
of
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Rs.1,66,55,520/- during the first quarter of 2016-17 and a penalty of Rs.18,11,290/- was imposed by the Intelligence Officer. On receipt of Ext.P1 notice, the petitioner filed reply, stating that an appeal was filed against the said penalty order and requested the appellate authority to keep in abeyance the assessment proceedings. The 1st respondent, however, finalized the assessment as per Ext.P3 order. In the meanwhile, the appellate authority, as per Ext.P4 order, allowed the appeal and reduced the penalty to a nominal amount of Rs.10,000/-. Thereafter, the petitioner
filed
Ext.P5
rectification application under Section 66 of the KVAT Act, requesting to rectify Ext.P3 assessment order on the basis of Ext.P4 appellate order. The 1st respondent, as per Ext.P6 order, rejected the request for rectification of Ext.P3 assessment order. In this writ petition, the petitioner
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is challenging only Point No.15 in Page 6 of Ext.P3 order and the additions made therein.
Aggrieved by Exts.P3 & P6 orders, the petitioner has filed this writ petition.
3. The 1st respondent has filed a counter affidavit, contending that the dealer had reported that an appeal against the penalty order passed by the Intelligence Officer, Squad No.III, was pending and that, the hearing of the said penalty appeal was posted on 22.02.2019 and assurance was also given by the petitioner to produce the appellate order within a week. It was further contended that the 1st respondent waited for the order till 22.03.2019, but, the dealer did not produce the appellate order within the time assured and hence, the 1st respondent completed the assessment proceedings as per Ext.P3 order and since there was no error apparent on the face of the record, Ext.P5 request for
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rectification of Ext.P3 order was also rejected.
4. Heard Adv.Harisankar V. Menon, the learned counsel
for
the
petitioner;
and Smt.M.M.Jasmine, the learned Government Pleader.
5. On a perusal of Ext.P3 order, it is seen that the order is dated 23.03.2019. The petitioner, in his reply, had specifically contended that an appeal has been filed against the order of the Intelligence Officer and the hearing of the appeal had started and that, the appellate authority has posted the appeal for final hearing on 22.02.2019. Ext.P4 appellate order reveals that the penalty was imposed against the petitioner, for not filing return for the first quarter till the date of inspection and the appellate authority found that there was only 23 days' delay in filing the return and found that the imposition of penalty for an
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amount of Rs.18,11,290/- without verifying the Books of Accounts of the appellant is not justifiable and thus, the appellate authority reduced the penalty to Rs.10,000/- under Section 67(1)(c) of the KVAT Act. On a perusal of Ext.P3 order, in page Nos.19 and 22, it is seen that the assessing authority has decided the 15th point of turnover suppression mainly on the basis of penalty order passed by the Intelligence Officer. Since now the appellate authority has reduced the penalty to a nominal amount of Rs.10,000/-, it is only just and reasonable that the 1st respondent reconsiders the said issue in accordance with law.
Certainly, there is no error apparent on the face of the record in order to rectify the mistakes in Ext.P3 order, but, however, it is only reasonable for the 1st respondent to reconsider the issue and therefore, the aforesaid Exts.P3 and P6 orders are to be set
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aside.
6. The learned counsel for the petitioner further submitted that the petitioner is challenging before this Court only point No.15 in Ext.P3 order and that, he may be permitted to challenge all the other findings in the said order in appropriate proceedings.
7. In the result, this writ petition is disposed of as follows;
(a) Ext.P3, insofar as Point No.15 is concerned, is set aside.
(b) Ext.P6 order is also set aside.
(c) The 1st respondent is directed to reconsider Point No.15 in Ext.P3 order and also the additions made thereto in respect of Point No.15 as per procedure and in adherence to the provisions of law, after affording an opportunity of hearing to the petitioner.
(d) All the other findings in Ext.P3 order are
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left open for the petitioner to challenge in appropriate proceedings.
(e) In order to comply with the above direction, the petitioner is directed to appear on 28.09.2022 at 11 am before the 1st respondent with all supporting documents.
The petitioner shall produce a certified copy of this judgment along with a copy of this writ petition before the 1st respondent for compliance.
Sd/- SHOBA ANNAMMA EAPEN JUDGE bka/-
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APPENDIX OF WP(C) 18464/2019 PETITIONER EXHIBITS EXHIBIT P1 COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT.
EXHIBIT P2 COPY OF REPLY SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT.
EXHIBIT P2(a) COPY OF REPLY SUBMITTED BY THE PETITIONER BEFORE THE OFFICE OF THE 1ST RESPONDENT.
EXHIBIT P3 COPY OF ORDER ISSUED BY THE 1ST RESPONDENT.
EXHIBIT P4 COPY OF ORDER ISSUED BY THE DY.
COMMISSIONER (APPEALS)-III, ERNAKULAM.
EXHIBIT P5 COPY OF APPLICATION SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT.
EXHIBIT P6 COPY OF ORDER ISSUED BY THE 1ST RESPONDENT.