M/S.Marymatha Construction Company vs. The State Tax Officer (Works Contract)

Facts

The petitioner, M/s. Marymatha Construction Company, challenged an assessment order (Ext.P3) and a subsequent order refusing rectification (Ext.P5) passed by the State Tax Officer. The assessment order, issued under Section 25 of the KVAT Act, dealt with alleged suppression of inter-State purchases. The petitioner had requested a detailed list of inter-State purchases from the KVATIS site to verify their ledger. The respondent claimed to have provided a soft copy of the invoice-wise list on a pen drive, but the petitioner argued they never received it or an acknowledgment was not obtained. The rectification application was rejected, stating that the petitioner had not submitted detailed objections after receiving the soft copy and had not produced documents to prove claimed deductions. The petitioner contended that the orders were illegal, arbitrary, and passed without jurisdiction, violating principles of natural justice.

Held

The Court held that the theory introduced by the respondent regarding the service of the soft copy of inter-State purchase details on the petitioner's representative was not established or could not be established. Consequently, the Court found the rejection of the rectification request (Ext.P5) to be unjustified. The Court decided to set aside Ext.P5 and remit the matter back to the first respondent for fresh consideration and disposal in accordance with law. To address procedural aspects, the Court directed the first respondent to provide the soft copy of the details on which they intend to rely for determining inter-State purchases, under acknowledgment, within two weeks. The petitioner was granted two weeks thereafter to file a reconciliation statement or evidence, and to appear before the first respondent on August 8, 2019, for the consideration and disposal of the rectification application (Ext.P4). The officer was directed to dispose of Ext.P4 on or before August 30, 2019. The issue of the legality of the original assessment order (Ext.P3) was not expressly decided, as the matter was remitted for reconsideration of the rectification application.

Key Issues

1. Whether the assessment order (Ext.P3) and the order refusing rectification (Ext.P5) are legal and conform to the requirements of law, specifically concerning the alleged suppression of inter-State purchases and the provision of necessary details to the petitioner? Petitioner's arguments: The petitioner argued that their request for a detailed list of inter-State purchases was not properly acceded to, and the assessment order was passed without providing adequate opportunity to verify the alleged suppressed amounts. They contended that the rejection of the rectification request was unjustified as it aimed to correct apparent errors and procedural lapses. They relied on the principle of natural justice. Respondent's arguments: The respondent argued that a soft copy of the purchase list was provided to the petitioner's representative, and the assessment was completed after waiting for nearly a year for detailed objections. They asserted that the rectification application was rejected because the petitioner failed to produce necessary documents and that no special grounds were made out for entertaining the writ petition. They claimed the transaction of providing the soft copy was bona fide.