M/S.Goodwill Marketing vs. Commercial Tax Officer

Facts

The petitioner, M/s. Goodwill Marketing, a registered dealer under the Kerala Value Added Tax (KVAT) Act, 2003, and Central Sales Tax Act, 1956, sought a refund of Rs. 1,14,908/- for the year 2011-12, claiming it was excess input tax credit. The petitioner filed an application for refund on April 3, 2017, which was beyond the stipulated three-month period after the expiry of the year. The delay was attributed to an inadvertent omission by the firm's accountant. The Commercial Tax Officer (first respondent) rejected the refund claim via Ext.P3 order, citing the delay. Subsequently, the petitioner filed another application (Ext.P4) under Section 89 of the KVAT Act, which was pending. The petitioner challenged the rejection order in the High Court.

Held

The Court noted that Rule 47A(1) of the KVAT Rules, 2005, mandates that an application for refund of unadjusted input tax at the end of the year must be submitted within three months after the expiry of the year to which the input tax relates. It was an admitted fact that the petitioner filed the application on April 3, 2017, which was over five years after the relevant year (2011-12). The Court observed that the petitioner failed to file an objection or avail the opportunity of hearing when a notice was issued proposing rejection of the refund application. Furthermore, the petitioner did not avail the opportunity under Section 20A of the KVAT Act, 2003, to file a petition for condonation of delay. The Court found that the remedy available to the petitioner was to file a statutory appeal before the concerned authority. Therefore, the Court was not inclined to observe anything on merits regarding the refund claim itself. The writ petition was disposed of by directing the petitioner to file an appeal along with a petition for condonation of delay before the competent appellate authority within one month. The appellate authority was directed to consider the appeal and the condonation petition within one month, taking a lenient view, so that the statutory remedy of appeal is not lost.

Key Issues

1. Whether the petitioner's application for refund of excess input tax credit, filed beyond the prescribed three-month period under Rule 47A(1) of the KVAT Rules, 2005, is maintainable? 2. Whether the High Court should entertain the writ petition when statutory remedies, including an appeal under Section 20A of the KVAT Act, 2003, are available to the petitioner? Petitioner's arguments: The delay in filing the refund application was due to an inadvertent omission by the accountant and not wilful. The petitioner is eligible for the refund under Section 89 of the KVAT Act, and the application for refund is pending. Reliance was placed on the pendency of Ext.P4 application. Revenue's arguments: The rejection order (Ext.P3) was justified as the application was filed long after the stipulated period. The petitioner's remedy was to approach the statutory authorities by way of appeal. The application under Section 89 could only be considered after detailed verification, and the current application was filed more than five years after the relevant year, making it barred by limitation. The Government Pleader argued that a best judgment assessment was not possible due to the significant delay.