Alex Varkey vs. The Assistant Commissioner (Works Contract) - Kerala High Court, 28 January 2021

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.M.BADAR THUR AY, THE 28TH DAY OF JANUARY 2021 / 8TH MAGHA, 1942 WP(C).No.28848 OF 2020(E) PETITIONER: ALEX VARKEY, AGED 50 YEARS S/O.K.C.VARKEY, RESIDING AT E 1336, BRIGADE GOLDEN TRIANGLE, KATTAMNALLUR, BANGALORE-560 049, (PARTNER,INTEGRATED SERVICES AND PROJECTS, NO.60, 3A, CENTURY BUILDING, 100 FEET ROAD, INDIRANAGAR, BANGALORE-560 038). BY ADVS. SRI.S.ANIL KUMAR (TRIVANDRUM) SHRI.RAHUL A. SMT.APARNA ANIL RESPONDENT: THE ASSISTANT COMMISSIONER (WORKS CONTRACT), DEPARTMENT OF COMMERCIAL TAXES (NOW RE-DESIGNATED AS STATE GST DEPARTMENT), CLAS TOWER, OLD RAILWAY STATION ROAD, KOCHI, PIN-682 020. GP- THUSHARA JAMES . ADV ANIL KUMAR SIVAPALAN -RESPONDENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 28.01.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C).No.28848 OF 2020(E) 2 JUDGMENT Dated this the 28th day of January 2021 Heard both sides.

By this petition, the petitioner is praying for quashing and setting aside the assessment order at Ext.P7 for assessment years 2011-2012 passed by the Assistant Commissioner (WC), Department of Commercial Taxes, Ernakulam on the ground that principles of natural justice were not followed while passing the same.

The learned counsel appearing for the petitioner drew my attention to the Registration Certificate at Ext.P1 as well as the intimation given by the firm to the respondent regarding closure of business with effect from 31.03.2015 (Ext.P5). On the basis of these documents, it is argued that while passing the assessment order, the respondent has failed to adhere to the principles of natural justice as no notice was served on either the firm or its partners. It is urged that the partner named Rema Baindur, to whom notice was allegedly served had left India and the so called service is not good.

At against this, the learned Government Pleader relying on Section 88 of the Kerala Value Added Tax argued that notice was sent by registered post to the first partner on her last known place of residence or business. According to the learned Government Pleader,

WP(C).No.28848 OF 2020(E) 3 pre-assessment notice was also served on the firm on the address available with the respondent and therefore, this cannot be a case of breach of principles of natural justice.

I have considered the submissions so advanced and perused the materials placed before me.

The certificate of registration of the firm of which the petitioner is a partner shows local address of Kochi. However, by communication at Ext.P5, the firm had duly intimated the respondent authorities that the firm has stopped its business with effect from 31.03.2015 and therefore, KVAT registration of the firm be cancelled. The communication at Ext.P5 shows that the same was duly acknowledged by the respondent department.

As against this, the assessment order under Section 25(1) of the KVAT Act, 2003 for the assessment year 2011-2012 shows that the pre-assessment notice was sent to the local business address of Cochin apart from the address of the first partner of the firm which is House No. 110 Benaka Towers Apartments, No.16 “D” Main, HAL II Stage, Kodihalli, Indira Nagar, Bangalore. The registered partnership deed shows address of the principal place of business of the partnership firm as No.60, 3A, 3rd Floor, Century Apartment 100 Ft Road, Indiranagar, Bangalore-5600038. The pre-assessment notice

WP(C).No.28848 OF 2020(E) 4 was not sent on this address of the firm. The assessment under Section 25(1) of the KVAT Act is the assessment in respect of the firm. As no notice was sent to the firm prior to assessment under Section 25(1) of the KVAT Act, 2003, it cannot be said that the principles of natural justice were duly followed while making assessment at Ext.P7. In the result, the petition is allowed. The impugned assessment order at Ext.P7 is quashed and set aside. The matter of assessment under KVAT Act, 2003 for the year 2011 is remitted back to the respondent Authority and the respondent Authority is permitted to effect assessment after following due process of law. The petitioner and all concerned parties is to appear before the respondent authority on 15.02.2021 at 11.30 am. A.M.BADAR N //// PA to Judge JUDGE

WP(C).No.28848 OF 2020(E) 5 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF REGISTRATION CERTIFICATE DATED 02.06.2011 ISSUED BY THE RESPONDENT TO M/S. INTEGRATED SERVICES AND PROJECTS. EXHIBIT P2 COPY OF PARTNERSHIP DEED DATED 24.03.2011 IN RESPECT OF M/S. INTEGRATED SERVICES AND PROJECTS. EXHIBIT P3 COPY OF ANNUAL RETURN FOR THE YEAR 20.11.2012. EXHIBIT P4 COPY OF AUDIT REPORT AND STATEMENT IN FORM 13 AND 13A FOR THE YEAR 2011-12. EXHIBIT P5 COPY OF LETTER DATED 02.02.2016 ADDRESSED TO THE RESPONDENT INTIMATING STOPPAGE OF BUSINESS. EXHIBIT P6 COPY OF E-MAIL DATED 20.11.2020 ISSUED BY THE RESPONDENT. EXHIBIT P7 COPY OF ORDER DATED 30.04.2017 ISSUED BY THE RESPONDENT. EXHIBIT P8 COPY OF NOTICE 10.02.2017 ISSUED BY THE RESPONDENT. EXHIBIT P9 COPY OF COVER IN WHICH EXT.P8 NOTICE WAS SENT TO ONE OF THE PARTNERS OF THE FIRM.