Anila Salgunan vs. State Tax Officer

The appellant/assessee was a presumptive dealer under Section 6(5) of the Kerala Value Added Tax Act, 2003 (For short “KVAT Act”). The status continued till the end of the assessment year 2006-07. On 01.04.2007 the assessee shifted to the regular scheme under Section 6(1), upon which the assessee was granted a new registration number. Some of the suppliers of the assessee used the old PIN number which the assessee had as a presumptive dealer, without showing the new TIN registration the assessee obtained from 01.04.2007. 3. On verification of the Kerala Value Added Tax Information System (KVATIS) module, the major portion of the input tax claimed by the assessee was declined, as is seen from Ext.P5. There was a difference of Rs.5,73,060/- in the input tax claimed, which stood disallowed. The KVATIS, according to the Assessing Officer provided valid data showing the claim of input tax credit of the assessee to be confined to Rs.11,25,033/- as against the assessee's claim of Rs.16,98,093/-.

We are convinced that there is no question of availing the alternate remedy under the statute especially since the KVATIS data could be modified only if the suppliers of the assessee revise their invoices showing the correct TIN registration of the assessee. The assessment year is also 2011-12 and we are almost 9 years from the said date. The assessment order itself is passed on 06.03.2018; seven years from the last date of the assessment year.

We are of the opinion that the assessee was not at fault. The assessee definitely should have been more alert insofar as invoices of purchase having shown the earlier PIN number while the assessee had shifted to regular tax regime under Section 6(1) with a fresh TIN registration number. However, admittedly all the invoices were after 01.04.2017 and the assessee had also paid taxes on the purchases made. The impediment is said to be the KVATIS which shows the input tax claim to be confined to a far lesser amount than that claimed. The said mistake occurred also on the purchase invoices of the assessee having shown the

The appellant has specifically referred to Section 11(5)(m) of the KVAT Act to contend that the input tax credit claim is supported by the invoices; which, however, admittedly shows the wrong registration number. However, the PIN number shown was that of the assessee itself as a presumptive dealer in the just prior assessment year. The Department also does not dispute the fact that at the commencement of the present assessment year 2007-08 the assessee sought for and obtained a TIN number moving out from the presumptive dealership. The Assessing Officer's ground for denial of input tax is also that the KVATIS does not show the input tax claimed, which is only by reason of the selling dealer having shown the PIN number despite the assessee having shifted from the presumptive dealership regime. The statute having provided for the claim to be supported by invoices, the system configuration cannot lead to consequences not provided for in the statute.

In the circumstances detailed above, we are of the opinion that this is a fit case where this Court has to invoke extra ordinary juri iction under Article 226 for reason of the assessee's statutory remedy being not efficacious. There is a palpable injustice caused to the assessee in the denial of input tax credit as has been found by the Hon'ble Supreme Court in (2005) 6 SCC 499 [State of H.P v. Gujarat Ambuja Cement Ltd.] The statutory authorities however would be fettered in granting relief to the assessee; unless the purchasers issue corrected invoices and revise their returns, which at this point after eight years, would not be a practical option. The assessee could be granted relief only under the extraordinary juri iction and there being no question of any unresolved facts arising we are inclined to exercise the discretion conferred under Article 226. We are of the opinion that the learned Single Judge on the peculiar facts arising herein and the alternate remedy being not an efficacious one, committed an error in not having exercised juri iction. On the above reasoning to avoid the