M/S.P.V.M. Traders vs. State Tax Officer - Kerala High Court, 26 February 2018

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR MONDAY, THE 26TH DAY OF FEBRUARY 2018 / 7TH PHALGUNA, 1939 WP(C).No. 40 of 2018 PETITIONER(S) M/S.P.V.M. TRADERS, CHANGARAMKULAM, MALAPPURAM DISTRICT-679585, BY P.V.MOHANAN, PROPRIETOR. BY ADVS.SRI.P.RAGHUNATH SRI.PREMJIT NAGENDRAN RESPONDENT(S): 1. STATE TAX OFFICER, GOODS AND SERVICES TAX DEPARTMENT, PONNANI-679583. 2. DEPUTY COMMISSIONER OF STATE TAX, STATE GST DEPARTMENT, MALAPPURAM-676517. BY SR. GOVERNMENT PLEADER SRI.V.K.SHAMSUDHEEN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 26-02-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 40 of 2018 (D) APPENDIX PETITIONER(S)' EXHIBITS EXHIBIT P1 PHOTOCOPY OF PROCEEDINGS U/S.56 OF KVAT ACT R/W SEC.9(2) OF CST ACT DATED 03.10.2017. EXHIBIT P2 PHOTOCOPY OF ASSESSMENT ORDER FOR 2014. 15 UNDER CST ACT DATED 14.11.2017 PASSED BY FIRST RESPONDENT. (true copy) Sd/- P.S. to Judge P.B.SURESH KUMAR, J. ----------------------------------------------- W.P.(C) No.40 of 2018 ----------------------------------------------- Dated 26th February, 2018.

J U D G M E N T Petitioner is a dealer in arecanut registered under the Central Sales Tax Act, 1956 (the CST Act). They are engaged in the sale of arecanut to registered dealers outside the State on interstate sales basis against C-Forms. The first respondent completed the assessment of the petitioner under the CST Act for the year 2014-15 in terms of its order dated 21.3.2016, accepting the C-Forms produced by the petitioner in support of their claim with respect to the interstate sales. Later, the second respondent, the Deputy Commissioner set aside the order passed by the first respondent in terms of Ext.P1 order, in exercise of his powers under Section 56 of the Kerala Value Added Tax Act, 2003 (the KVAT Act) on the ground that the enquiry conducted by the Special Investigation Team of the Commercial Taxes Department revealed that the C-forms produced by the petitioner were bogus. Though the petitioner has alternative remedies under the CST Act, they challenge Ext.P1 order in this proceedings under Article 226 of the Constitution on the ground that the same is one issued without juri iction.

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

The learned counsel for the petitioner contended that the CST Act confers suo motu power of revision to the Deputy Commissioner only under Section 6A of the Act dealing with transfer of goods otherwise than by way of sale.

It is seen that the suo motu power under Section 56 of the KVAT Act has been exercised by the second respondent in the instant case in the light of the provisions contained in sub-section (2) of Section 9 of the CST Act. Sub- section (2) of Section 9 reads thus : “(2) Subject to the other provisions of this Act and the rules made thereunder, the authorities for the time being empowered to assess, re-assess, collect and enforce payment of any tax under general sales tax law of the appropriate State shall, on behalf of the Government of India, assess, collect and enforce payment of tax, including any interest or penalty, payable by a dealer under this Act as if the tax or interest or penalty payable by such a dealer under this Act is a tax or interest or penalty payable under the general sales tax law of the State; and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State; and the provisions of such law, including provisions relating to returns, provisional assessment, advance payment of tax, registration of the transferee of any business, imposition of the tax liability of a person carrying on business on the transferee of, or successor to such business, transfer of liability of any firm or Hindu undivided family to pay tax in the event of the dissolution of such firm or partition of such family, recovery of tax from third parties, appeals, reviews, revisions, references, refunds, rebates, penalties charging or payment of interest compounding of offences and treatment of documents furnished by a dealer as confidential, shall apply accordingly: Provided that if in any State or part thereof there is no general sales tax law in force, the Central Government may, by rules made in this behalf make necessary provision for all or any of the matter specified in this sub-section.” It is contended by the learned counsel for the petitioner that suo motu powers conferred on the second respondent under Section 56 of the KVAT Act is more in the nature of administrative control over the lower authorities which is not conferred on him in terms of sub-section (2) of Section 9 of the CST Act. It is seen that similar contention raised in the context of the suo motu power under the Kerala General Sales Tax Act, 1963 (KGST Act) in respect of an assessment made under the CST Act has been considered by this Court in TRC No.116 of 2000 and connected cases. In the common order passed in the said cases, it was found by a Division Bench of this Court that the sumo motu power conferred on the Deputy Commissioner under Section 35 of the KGST Act could be availed in respect of assessments made under the CST Act in the light of sub- section (2) of Section 9 of the CST Act. Paragraph 12 of the said judgment reads thus :

“12. Sub-section (2) of Section 9 vest the power with state authorities to assess or re-assess tax, levy penalties, deal with Rubber Factory Ltd ([1998] 108 STC 583). Therefore, we are of the opinion, firstly the Deputy Commissioner of Commercial Taxes was justified in invoking his revisional powers to bring to tax the escaped turnover in the assessment orders passed under the CST Act.” In the circumstances, the writ petition is devoid of merits and the same is, accordingly, dismissed. P.B.SURESH KUMAR, JUDGE. tgs