M/S.Chirakekkaran Glass House (P) LTD. vs. State Tax Officer - Kerala High Court, 28 February 2020

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM & THE HONOURABLE MR.JUSTICE T.V.ANILKUMAR FRIDAY, THE 28TH DAY OF FEBRUARY 2020/9TH PHALGUNA, 1941 WA.No.357 OF 2020 AGAINST THE ORDER/JUDGMENT IN WP(C) 4171/2020(V) OF HIGH COURT OF KERALA APPELLANT/S: M/S.CHIRAKEKKARAN GLASS HOUSE (P) LTD., DOOR NO.13/555, SAW MILL ROAD, KOORKENCHERRY, THRISSUR DISTRICT-680007, REPRESENTED BY ITS MANAGING DIRECTOR SUNNY ANTO.C. BY ADVS. SRI.K.J.ABRAHAM SRI.NIKHIL JOHN RESPONDENT/S: 1 STATE TAX OFFICER, (FORMALLY, INTELLIGENCE OFFICER), SQUAD NO.II, STATE GST DEPARTMENT, TAX COMPLEX, POOTHOLE.P.O., THRISSUR DISTRICT-680004. 2 DEPUTY COMMISSIONER, DEPARTMENT OF COMMERCIAL TAXES, COMMERCIAL TAX COMPLEX, POOTHOLE.P.O., THRISSUR DISTRICT-680004. 3 COMMISSIONER, DEPARTMENT OF COMMERCIAL TAXES, COMMERCIAL TAX COMPLEX, KARAMANA, THIRUVANANTHAPURAM DISTRICT-695002. OTHER PRESENT: SR.GP-SRI. MOHAMMED RAFIQ THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 28.02.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WA No. 357 of 2020 ..2.. C.K. ABDUL REHIM & T.V. ANILKUMAR, JJ. ---------------------------------------------- WA No. 357 of 2020 ---------------------------------------------- Dated this the 28th day of February, 2020 J U D G M E N T C.K. Abdul Rehim, J. The above writ appeal is filed challenging judgment of the Single Judge in WP(C) No.4171 of 2020, dated 14.02.2020. The writ petitioner is the appellant and the respondents in the writ petition are the respondents herein.

Ext.P11 notice issued proposing imposition of penalty under Section 67 of the Kerala Value Added Tax Act, 2003 (“KVAT Act” for short), was under challenge in the writ petition. The learned Single Judge disposed the above writ petition by finding the challenge as premature, on observing that, the writ petitioner can

WA No. 357 of 2020 ..3.. agitate all his objections before the authority who had issued Ext.P11 notice. It was further observed that, in case of any objection is filed by the writ petitioner, the authority shall take it into consideration and pass appropriate orders in accordance with law, after affording an opportunity to the writ petitioner being heard.

According to the appellant, Ext.P11 notice itself is not sustainable in view of the earlier round of revision petition filed against an order passed imposing penalty, by the very same authority. Learned counsel for the appellant had drawn our attention to Ext.P10 proceedings of the 3rd respondent, wherein an earlier order imposing penalty under Section 67 of the KVAT Act was quashed. But, on a perusal of Ext.P10, we take note of the fact that, while quashing the order imposing penalty, the 3rd respondent had remanded the matter back to the Intelligence Officer for fresh

WA No. 357 of 2020 ..4.. disposal, on the issue of cash discount. The relevant portion of Ext.P10 order reads as follows; “In view of the above facts and circumstances, I am of the view that the contention raised by the petitioner deserves some merit. Hence the penalty proceeding is quashed and the case is remanded back to the Intelligence Officer for fresh disposal on the issue of cash discount. The Intelligence Officer is directed to verify the sale invoices issued to customers as well as dealers to find out the actual quantum of suppressed turnover on account of non existent cash discount, after considering the financial statement, books of accounts invoices etc and after conducting a detailed enquiry as per law. No other points for consideration. Revision petitions filed against the revision order of Deputy Commissioner are disposed accordingly with the above findings.”

Contention is that, the present proposal for imposition of penalty is beyond the scope of the remand. According to learned counsel for the appellant, what the authority is entitled to look into is only with respect to the issue relating to cash discount. Hence the proposal which goes beyond the scope of the remand is not maintainable, is the contention. Per contra, the learned Government Pleader appearing for the respondents pointed out that, the notice

WA No. 357 of 2020 ..5.. proposes imposition of penalty only on the issue of discount on referring to the relevant invoices.

However, we are persuaded to accept the view taken by the learned Single Judge that, the challenge is highly premature. If the appellant has got a case that the proposal had gone beyond the scope of the remand ordered by the revisional authority, he will be entitled to point out the same before the 1st respondent himself, through proper objections to be filed. Needless to observe that, if such a contention is raised before the 1st respondent, the 1st respondent has to look into the same, and shall take a proper decision. Further, it is again needless to observe that, if the 1st respondent omits to take a decision on that, the appellant can challenge the order on that ground itself, apart from the other grounds available. Therefore, the above writ appeal is hereby disposed of by reserving liberty to the appellant to file

WA No. 357 of 2020 ..6.. objections against Ext.P11 notice. Two weeks time is allowed to the appellant to file objection to Ext.P11. On receipt of such objection, the 1st respondent shall consider the objections raised and shall pass appropriate order, after affording an opportunity of hearing to the appellant. C.K.ABDUL REHIM JUDGE T.V.ANILKUMAR JUDGE Bka/29.02.2020