M/S Choice Constructions vs. State Of Kerala

Facts

The petitioner, M/s Choice Constructions, represented by its proprietor, filed a writ petition challenging an assessment order dated March 13, 2020, passed by the State Tax Officer (Works Contract), and a rectified order dated June 22, 2022, passed by the Deputy Commissioner (Works Contract). The petitioner sought to quash these orders and declare Section 8(a)(ii) of the KVAT Act unconstitutional for levying tax on goods imported from outside the country. The petitioner argued that the issue was covered by a previous order of the Kerala Value Added Tax Appellate Tribunal and a judgment of the High Court in a similar case involving the same petitioner. The Government Pleader did not dispute these submissions.

Held

The Court allowed the writ petition. Regarding the first issue, the Court found merit in the petitioner's submission that the impugned orders, specifically the rectified order dated June 22, 2022, had failed to take into account the binding precedents. The Court noted that the issue was covered by the judgment of the High Court in M/s Choice Constructions v. State of Kerala (Ext.P9) and the order of the Kerala Value Added Tax Appellate Tribunal (Ext.P10). Consequently, the rectified order was quashed. The Court did not explicitly address the constitutional challenge to Section 8(a)(ii) of the KVAT Act, as the matter was disposed of on the ground of non-consideration of relevant precedents. The matter was remanded back to the 3rd respondent (Deputy Commissioner) to pass fresh orders after considering the Ext.P9 judgment and Ext.P10 order. The ratio decidendi is that assessment orders must consider relevant judicial and quasi-judicial pronouncements, and failure to do so warrants remand.

Key Issues

1. Whether the assessment order dated March 13, 2020, and the rectified order dated June 22, 2022, passed by the respondent authorities are liable to be quashed. (Question of law) 2. Whether Section 8(a)(ii) of the KVAT Act is unconstitutional as it provides for the levy of tax on goods imported from outside the country during the relevant period. (Question of law) Petitioner's arguments: The petitioner contended that the impugned orders failed to consider a relevant order of the Kerala Value Added Tax Appellate Tribunal (Ext.P10) concerning previous assessment years and a judgment of the High Court in M/s Choice Constructions v. State of Kerala (Ext.P9). These precedents, according to the petitioner, covered the issue at hand. Revenue's arguments: The Government Pleader did not dispute the petitioner's submissions regarding the applicability of the aforementioned High Court judgment and Tribunal order.