M/S.Super Plast Poly Products INDIA Private Limited vs. State Of Kerala - Kerala High Court, 05 July 2018

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU THURSDAY, THE 5TH DAY OF JULY 2018 / 14TH ASHADHA, 1940 WP(C).No. 21257 of 2018 ------------------------ PETITIONER ---------- M/S.SUPER PLAST POLY PRODUCTS INDIA PRIVATE LIMITED, V/331-C, MELANKOIL ROAD, VENGANALLOOR, THRISSUR-680586, REPRESENTED BY ITS EXECUTIVE DIRECTOR,K.MURALIMOHANAN. BY ADVS.SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.GOPINATH SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS SRI.PAULOSE C. ABRAHAM SRI.RAJA KANNAN RESPONDENT(S): -------------- 1. STATE OF KERALA, REPRESENTED BY ITS SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM - 695001 2. THE COMMERCIAL TAX OFFICER-I, STATE GOODS AND SERVICES TAX DEPARTMENT, WADAKKANCHERRY- 680582 3. GST CELL AND FACILITATION CENTER, STATE GOODS AND SERVICES TAX DEPARTMENT, POOTHOLE THRISSUR - 680004 * ADDL R4 TO R8 IMPLEADED 4. GST COUNCIL REPRESENTED BY ITS CHAIRPERSON, DEPARTMENT OF FINANCE, NORTH BLOCK,NEW DELHI-110 0001. 5. GOODS AND SERVICES TAX NETWORK(GSTN), REPRESENTED BY ITS CHAIRMAN,EST WING,4TH FLOOR WORK MARK-1, AEROCITY, NEW DELHI-11037. 6. THE NODAL OFFICER FOR STATE GST, GOODS AND SERVICES TAX DEPARTMENT,KARAMANA, THIRUVANANTHAPURAM-595 002. 7. THE NODAL OFFICER FOR CENTRAL GST DEPARTMENT, GOODS AND SERVICES TAX, KARAMANA,THIRUVANANTHAPURAM-695 002. WP(C).No. 21257 of 2018 (F) -------------------------- 8. THE COMMISSIONER, GOODS AND SERVICES TAX DEPARTMENT DEPARTMENT, KARAMANA, THRIUVANANTHAPURAM-695 002. * ADDL R4 TO R8 IMPLEADED AS PER ORDER DATED 5.07.2018 IN IA NO.11685/2018 BY GOVERNMENT PLEADER SRI SHAMSUDHEEN.V.K. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 05-07-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.V. WP(C).No. 21257 of 2018 (F) -------------------------- APPENDIX PETITIONER(S)' EXHIBITS ------------------------ EXT.P1: THE TRUE COPY OF THE CERTIFICATE OF INCORPORATION DATED 8/7/2010 ISSUED BY THE ASSISTANT REGISTRAR OF COMPANIES. EXT.P2: THE TRUE COPY OF THE REGISTRATION CERTIFICATE DATED 22/9/2017 ISSUED TO THE PETITIONER UNDER GST ACT EXT.P3: THE TRUE COPY OF THE INVOICE DATED 29/11/2016 EVIDENCING THE PURCHASE OF DIESEL GENERATOR SET BY THE PETITIONER EXT.P4: THE TRUE COPY OF THE APPLICATION IN FORM NO.25 DATED 20/12/2016 SUBMITTED BY THE PETITIONER EXT.P5: THE TRUE COPY OF THE AUDITED REPORT AND STATEMENTS AS DATED 01/9/2017 RELATING TO THE YEAR 2016-17 EXT.P6: THE TRUE COPY OF THE LETTER (WITHOUT ANNEXURES) DATED 30/6/2017 SUBMITTED BY THE PETITIONER TO THE 2ND RESPONDENT. EXT.P7: THE TRUE COPY OF THE JUDGMENT DATED 14/6/2017 PASSED BY THIS HON'BLE HIGH COURT IN WPC NO. 11576/2017. RESPONDENTS EXHIBITS: NIL -------------------- /TRUE COPY/ K.V. P.S.TO JUDGE 25.07.2018 DAMA SESHADRI NAIDU, J. ================================ W.P.(C). No.21257 of 2018 =================================== Dated this the 5th day of July, 2018

JUDGMENT The petitioner had purchased a Diesel Generator, in November 2016, as capital equipment for its business. It paid the tax, as well as the price of the Generator. The petitioner, however, failed to include the purchased item in the return submitted by it, for December 2016. So, in June 2017, through the Ext.P6, it wanted the respondents to allow it to revise the return. If revised, the return can reflect this item.

The respondents, the allegation goes, did not respond to the petitioner's request to revise the return. With the 2nd respondent’s inaction, the petitioner had to upload TRAN-1 Form under the GST, without incorporating the details of input credit under the KVAT regime. It has caused serious prejudice and hardship to the petitioner.

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Thus alleging, the petitioner filed this writ petition. It sought a direction to the respondents to permit it to revise the return for December 2016: to include the purchase of the diesel generator.

The respondents, however, apprehend that if the petitioner could include the purchases in the returns for December 2016, it would automatically claim input credit on the tax it paid when it had purchased generator. And it may seek to use that input credit when it discharges tax on the product sold by it.

Heard the learned counsel for the petitioner as also the learned Government Pleader.

I may, to begin with, observe that a Division Bench of this Court dealt with the same issue in The Commercial Tax Officer v. C. R. Varghese.1 It has held as follows:

“12. Under Section 21(2), the dealer, on detecting any omission or mistake in the monthly return, can file a revised return rectifying the same within two months from the last day of the return period. Sub-section (9) 1 WA No.2541 of 2018 and connected cases, judgment, dt.06.06.2018

-3- of Section 22 prohibits any such revision of return if an offense has been detected or other proceedings initiated. Sub-section (10) of Section 22 permits a revised return incorporating the turnover covered in the penal proceedings after the proceedings are finalized and compounded, upon which again the assessment is deemed to be completed subject to the provisions of Sections 24 and 25. The proviso to sub- section (10) provides for a best judgment assessment in accordance with the provisions of Sections 24 and 25 when a pattern of suppression is detected. Sub-section (2) of Section 42 enables a revision of return on detection of any omission or mistake in the annual return with respect to the audited figures. The revised annual return shall be filed along with the audit certificate, accompanied with proof of payment of tax and any interest and penal interest calculated at twice the rate specified under sub-section (5) of Section 31. The proviso to the aforesaid provision also prohibits any revision by a dealer against whom penal action is initiated. Section 79B is a non-obstante clause, by which also there is a prohibition in filing a revised return when instances of tax evasion has been detected and proceedings are initiated against such evasion.”

After elaborately discussing the pros and cons of letting the dealer file revised returns, C. R. Varghese has held that when a dealer wants to revise a return, the Assessing Authority, as the Act mandates, must accept it. The decision also asserts that there is no prohibition

-4- against the dealer’s seeking to revise a return after the time specified if no penal proceedings are pending. It then concludes that the Assessing Officer has the authority to examine the dealer’s claims “even beyond the period and decide the question in accordance with well-established principles of law and ensure that the attempt is not to cover up or get over a penal provision or avoid the penal consequences of detection.”

The revised returns, C. R. Varghese notes, would be subject to Sections 22, 24 and 25 of the Act. On input tax credit, it has held that the possible claim by the assessee of a benefit available under the statute cannot be a reason for the authorities to deny the revision of return if it is a claim in good faith.

So following C. R. Varghese’s ratio, I direct the 2nd respondent to permit the petitioner to revise the returns for December 2016; the petitioner may include the purchase of diesel generator, as it claimed. The -5- Commissioner of Commercial Taxes will enable the petitioner to revise the return. The authorities may, once the petitioner comes forward to revise the returns, complete the process in three weeks. The writ petition, accordingly, stands disposed of. No order on costs. DAMA SESHADRI NAIDU JUDGE