M/S.Malikkan Traders v. Assistant Commissioner - Iii - Kerala High Court, 05 July 2022

S.V.Bhatti,J.

Heard Mr.P.Raghunathan learned counsel for the petitioner and Mr.Shamsudheen V.K learned Sr. Government Pleader for the respondents.

The O.T. Revisions are directed against the order dated 11.12.2017 of the Commissioner of State Goods and Service Taxes, Thiruvananthapuram. The circumstances leading to the present controversy are same and the counsel appearing for the parties would suggest that O.T. Revision No.18/2018 could be treated as lead case both for narrating the circumstances and considering the points raised by the parties. The outcome would apply to the other cases as well. O.T. Revision No.18/2018 3. M/s. Malikkan Traders is a registered dealer under the Central Sales Act, 1956 (for short, ‘the CST Act’). For the years 2011-

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12 and 2012-13, assessments under the CST Act were completed by the first respondent vide orders dated 26.09.2015 and 26.10.2015. On 21.07.2017, the Deputy Commissioner, Commercial Taxes, Kannur issued show cause notice under Section 9(2A) of the CST Act proposing to reopen the assessment for the years 2011-12 and 2012-13. The petitioner was heard by the Deputy Commissioner, resulting in the order dated 22.08.2017. The Deputy Commissioner directed Assistant Commissioner, Special Circle, Kannur to reopen the assessment, since the original order of assessment is prejudicial to the interest of Revenue. The petitioner, against the order dated 22.08.2017, went in revision before the Commissioner of State Goods and Service Taxes, Thiruvananthapuram. The Commissioner through the order impugned in the revision rejected the revision filed by the petitioner. Hence the O.T. Revision under Section 63(1) of Kerala Value Added Tax Act, 2003. (for short, ‘the KVAT Act’)

Adv.P.Raghunathan argues that the Deputy Commissioner does not have the power to set aside the assessment completed by the Assistant Commissioner, Special Circle,

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Kannur vide order dated 26.10.2015 on the ground that the Deputy Commissioner lacks the power of suo moto revision against the order of assessment. He argues that the officers designated under the KVAT Act are enabled by provisions in the CST Act to discharge the duties and functions of the CST Act as well. The CST Act does not provide for suo moto revision against an order of assessment. Interest and penalty were levied under the CST Act; the Supreme Court held that in the absence of power and juri iction, levy of interest or penalty is illegal. He relies on a few judgments which we refrain from adverting to. These judgments for the circumstances on hand are different from the circumstances considered and the ratio laid therein. The learned counsel with considerable force at his command tried to contend that the orders of Deputy Commissioner are per se illegal could not, by referring to the circumstances/record of the case, establish the foundation for the legal argument. The crux of the argument is that the assessment orders dated 26.09.2015 and 26.10.2015 are set aside by the order of the Deputy Commissioner dated 22.08.2017, which action per se is illegal, without juri iction, and liable to be interfered with.

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Mr. Shamsudheen V.K appearing for respondents invites the attention of the Court to Section 9(2A) of the CST Act and argues that Section 9(2A) as it is stood then deals with levy and collection of tax and penalty. In the case on hand, the short recovery of tax is on account of fabricated C forms produced by the dealer. The said aspect is a matter of enquiry before the authorities. The Deputy Commissioner merely directed to reopen the assessment of dealer for the subject years. Unless and until reassessment takes place, after notice is issued to the dealer and procedure followed, it cannot be contended that through the order directing reassessment, the original assessment orders dated 26.09.2015 and 26.10.2015 are set aside. He invites our attention to the following paragraphs in the orders: Annexure-V Order No. B2-675/16(1) dated 22.08.2017. In exercise of the powers conferred upon me under Section 9(2A) of the CST Act 1956, permission is hereby accorded to, the Assistant Commissioner, Special Circle. Kannur to re-open the assessment completed in respect of M/s. Malikkan Traders, Chapparapadavu for the year 2011-12 vide Order No. 32120223794/11-12 dated 26.09.2015 since the said order is found

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to be prejudicial to the interest of revenue.

Deputy Commissioner, State GST Dept./Kerala, Kannur.

Annexure-IX

“Under the above circumstances, it is found that, the order issued by the Deputy Commissioner, Kannur in according sanction to re- open the assessment completed is in order and on the basis of facts proved beyond doubt that, the said order was prejudicial to the interest of revenue. The petitioner obviously will be provided with ample opportunity to present the case on the basis of the genuineness of individual statutory forms with him. In the circumstances, I do not find any deficiency in the orders passed by the Deputy Commissioner, Kannur and therefore, I upheld the orders of the Deputy Commissioner Kannur and present revision filed by the petitioner as well as the interlocutory applications for stay are dismissed.”

1 He lays much emphasis on the notice dated 21.07.2017 to contend that the notice was issued proposing to reopen the assessment but not to set aside the assessment already concluded. According to him, the issue of reassessment is still pending before the Assistant Commissioner, Special Circle, Kannur. The dealer can raise objections available both in the law and fact as and when notices are issued by the Assistant Commissioner.

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We have perused the record and noted the submissions of the counsel appearing for parties. We appreciate the argument of Mr. P.Raghunathan that the Deputy Commissioner unless and until vested with the power of suo moto revision cannot and could not entertain the revision akin to Section 63(1) of the KVAT Act. Definitely, the juri iction to entertain a revision or suo moto revision is dependent on the power conferred on the Deputy Commissioner. We are relieved from examining the said argument because, the argument proceeds on the assumption that assessment orders are set aside by the Deputy Commissioner vide order dated 22.08.2017. Whether the understanding, is correct or not, is examined by recapitulating the excerpted paragraphs. We do not want to reproduce the relevant portion once again, however by keeping it at the back of our mind, we are of the considered view that the grounds now raised on the power of the Deputy Commissioner do not arise in the circumstances of the case. The order of the Deputy Commissioner directs reopening of assessment and nothing more. As and when notices are issued to the petitioner, the petitioner can certainly raise all the objections available in fact

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and law and the authority is under obligation to consider and decide them. With the above observation, O.T.Revision No.18/2018 is dismissed. No order as to costs. O.T. Revision Nos. 19/2018, 20/2018 & 21/2018 For the view, reasoning, and conclusion recorded in O.T. Revision No.18/2018, O.T. Revision Nos. 19, 20 and 21/2018 stand dismissed. S.V.BHATTI JUDGE BASANT BALAJI JUDGE

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APPENDIX OF OT.REV 18/2018

PETITIONER ANNEXURES ANNEXURE I PHOTOCOPY OF ASSESSMENT ORDER FOR 2011.12 (CST) DT. 26.09.2015. ANNEXURE II PHOTOCOPY OF ASSESSMENT ORDER FOR 2012-13 (CST) DT. 26.10.2015. ANNEXURE III PHOTOCOPY OF NOTICE U/S. 9 (2A) OF CST ACT. DT. 21.07.2017 FOR 2011-12. ANNEXURE IV PHOTOCOPY OF NOTICE U/S. 9(2A) OF CST ACT, DT. 21.07.2017 FOR 2012-13. ANNEXURE V PHOTOCOPY OF ORDER U/S. 9 (2A) FOR 2011-12 DT. 22.08.2017. ANNEXURE VI PHOTOCOPY OF ORDER U/S. 9 (2A) FOR 2012-13 DT. 22.08.2017. ANNEXURE VII PHOTOCOPY OF REVISION PETITION FILED AGAINST ANN.V ORDER FOR 2011-12. ANNEXURE VIII PHOTOCOPY OF REVISION PETITION FILED AGAINST ANN. VI ORDER FOR 2012-13. ANNEXURE IX PHOTOCOPY OF ORDER PASSED IN ANNS. VII AND VIII REVISION PETITIONS DT. 11.12.2017. OT.REV NO. 18/2018, 19/2018, 20/2018,21/2018

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APPENDIX OF OT.REV 19/2018

PETITIONER ANNEXURES ANNEXURE 1 PHOTOCOPY OF ASSESSMENT ORDER FOR 2011-12 (CST) DATED 7.2.2014 ANNEXURE 11 PHOTOCOPY OF ASSESSMENT ORDER FOR 2012-135 (CST) DATED 31.1.2014 ANNEXURE 111 PHOTOCOPY OF NOTICE U/S 9)2A) OF CST ACT,DATED 21.7.2017 FOR 2011-12 ANNEXURE IV PHOTOCOPY OF NOTICE U/S 9) 2A) OF CST ACT DATED 21.7.2017 FOR 2012-13 ANNEXURE V PHOTOCOPY OF ORDER U/S 9(2A) FOR 2011-12 DATED 22.8.2017 ANNEXURE V1 PHOTOCOPY OF ORDER U/S 9 (2A) FOR 2012-13 DATED 22.8.2017 ANNEXURE V11 PHOTOCOPY OF REVISION PETITION FILED AGAINST ANN V ORDER FOR 2011-12 ANNEXURE VIII PHOTOCOPY OF REVISION PETITION FILED AGAINST ANN VI ORDER FOR 2012-13 ANNEXURE IX PHOTOCOPY OF ORDER PASSED IN ANNA.VII AND VIII REVISION PETITIONS DATED 11.12.2017

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APPENDIX OF OT.REV 20/2018

PETITIONER ANNEXURES ANNEXURE 1 PHOTOCOPY OF ASSESSMENT ORDER FOR 2011-12 (CST) DATED 7.2.2014 ANNEXURE 11 PHOTOCOPY OF ASSESSMENT ORDER FOR 2012-135 (CST) DATED 31.1.2014 ANNEXURE 111 PHOTOCOPY OF NOTICE U/S 9/2A/OF CST ACT, DATED 21.7.2017 FOR 2011-12 ANNEXURE IV PHOTOCOPY OF NOTICE U/S 9)2A) OF CST ACT DATED 21.7.2017 FOR 2012-13 ANNEXURE V PHOTOCOPY OF ORDER U/S 9(2A)FOR 2011-12 DATED 22.8.2017 ANNEXURE VI PHOTOCOPY OF ORDER U/S 9 (2A) FOR 2012-13 DATED 22.8.2017 ANNEXURE V11 PHOTOCOPY OF REVISION PETITION FILED AGAINST ANN V ORDER FOR 2011-12 ANNEXURE VIII PHOTOCOPY OF REVISION PETITION FILED AGAINST ANN VI ORDER FOR 2012-13 ANNEXURE IX PHOTOCOPY OF ORDER PASSED IN ANNS VII AND VIII REVISION PETITIONS DATED 11.12.2017

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APPENDIX OF OT.REV 21/2018

PETITIONER ANNEXURES ANNEXURE I PHOTOCOPY OF ASSESSMENT ORDER FOR 2011.12 (CST) DATED 26.09.2015. ANNEXURE II PHOTOCOPY OF ASSESSMENT ORDER FOR 2012.13 (CST) DATED 26.10.2015. ANNEXURE III PHOTOCOPY OF NOTICE U/S 9[2A] OF CST ACT DATED 21.07.2017 FOR 2011-12. ANNEXURE IV PHOTOCOPY OF NOTICE U/S 9[2A] OF CST ACT DATED 21.07.21017 FOR 2012-13. ANNEXURE V PHOTOCOPY OF ORDER U/S 9[2A] FOR 2011-12 DATED 22.08.2017. ANNEXURE VI PHOTOCOPY OF ORDER U/S.9[2A] FOR 2012-13 DATED 22.08.2017. ANNEXURE VII PHOTOCOPY OF REVISION PETITION FILED AGAINST ANN.V ORDER FOR 2011-12. ANNEXURE VIII PHOTOCOPY OF REVISION PETITION FILED AGAINST ANN.VI ORDER FOR 2012-13. ANNEXURE IX PHOTOCOPY ORDER PASSED IN ANNS.VII AND VIII REVISION PETITIONS DATED 11.12.2017.