M/S. Lal Steels Private LTD. vs. The Commercial Tax Officer (In-Charge)

Facts

The petitioner, M/s. Lal Steels Private Ltd., engaged in the manufacture and sale of iron and steel products, filed a writ petition challenging Ext.P5 order passed by the Commercial Tax Officer (1st respondent). The order disallowed input tax credit amounting to Rs.32,63,142/- for the assessment year 2012-2013. The petitioner had submitted a detailed reply and reconciliation statement (Exts.P4 and P4A) in response to a notice under Section 25(1) of the Kerala Value Added Tax Act, 2003 (KVAT Act). The petitioner contended that the 1st respondent failed to properly consider these documents and the procedural requirements of Section 11(9) of the KVAT Act before passing the impugned order. The revenue argued that reasons were provided in Ext.P5 and that the reconciliation statement was submitted because Form 13 & 13A statements did not endorse the claim.

Held

The Court held that while the petitioner raised contentions regarding the non-consideration of their reply and reconciliation statement and the alleged non-compliance with Section 11(9) of the KVAT Act, these issues could be effectively considered by the statutory appellate authority. Citing the Supreme Court's decision in Genpact India Private Limited v. Deputy Commissioner of Income Tax and Another, the Court emphasized that High Courts should generally not interfere under writ jurisdiction when an adequate and efficacious alternative remedy is available. The petitioner did not demonstrate any violation of the principles of natural justice, and Ext.P5 indicated an opportunity of hearing was provided. Therefore, no exceptional case warranting interference under Article 226 was made out. The Court directed the petitioner to file an appeal before the statutory authority within one month of receiving the judgment, with the Appellate Authority to consider the appeal leniently regarding the period the writ petition was pending, verify original tax invoices as per Section 11(9), and pass orders within three months. Recovery proceedings were stayed for two months.

Key Issues

1. Whether the 1st respondent, the Commercial Tax Officer, erred in disallowing input tax credit of Rs.32,63,142/- for the assessment year 2012-2013 without properly considering the petitioner's reply and reconciliation statement, thereby violating principles of natural justice or procedural requirements under Section 25(1) and Section 11(9) of the KVAT Act? Petitioner's arguments: The petitioner argued that the 1st respondent failed to properly consider the detailed reply (Ext.P4) and reconciliation statement (Ext.P4A) submitted by them. They further contended that the 1st respondent did not comply with the procedural requirements of Section 11(9) of the KVAT Act, which mandates calling for original tax invoices to verify input tax credit claims. The petitioner asserted that the reasons for differences in Form 13 & 13A statements were clearly explained in their reply. Revenue's arguments: The learned Government Pleader submitted that the 1st respondent provided reasons in Ext.P5 order regarding the reconciliation statement. The revenue contended that the reconciliation statement was submitted because Form 13 & 13A statements did not endorse the claim.