By Advs.sri.harisankar v. Menon Smt.meera V.menon

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE MONDAY, THE 4TH DAY OF JULY 2016/13TH ASHADHA, 1938 WP(C).No. 30486 of 2015 (I) --------------------------------------- PETITIONER(S): ---------------------- P.V.RON, AGED 33 YEARS, M/S.GLORIA TRADERS, KIZHAKKANCHERRY ROAD, VADAKKANCHERRY, PALAKKAD DISTRICT. BY ADVS.SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENT(S): ------------------------- THE AGRICULTURAL INCOME TAX AND COMMERCIAL TAX OFFICER, ALATHUR-678 541. BY GOVERNMENT PLEADER SMT.LILLY K.T. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04-07-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: PJ WP(C).No. 30486 of 2015 (I) -------------------------------------- APPENDIX PETITIONER(S)' EXHIBITS ------------------------------------- P1 : COPY OF NOTICE ISSUED BY THE RESPONDENT TO THE PETITIONER DT 22-6-2015DT 22-6-2015 P2 : COPY OF LETTER SUBMITTED BY THE PETITIONER BEFORE THE RESPONDENT DT 6-7-2015RESPONDENT DT 6-7-2015 P3 : COPY OF ORDER ISSUED BY THE RESPONDENT TO THE PETITIONER DT 26-8-2015.DT 26-8-2015. RESPONDENT(S)' EXHIBITS--------------------------------------- NIL. / TRUE COPY / PJ P.S. TO JUDGE A.M. SHAFFIQUE, J.===============W.P. (C) No. 30486 of 2015 ================== Dated this, the 4[th] day of July, 2016 J U D G M E N T Petitioner challenges Ext.P3 by which an order ofassessment had been passed under Section 25(1) of the KVATAct, 2003. The main contention urged by the petitioner forbypassing the alternate remedy is that there is violation of theprinciples of natural justice. It is stated that the Officer had givendetails of certain purchases made by the petitioner from certainagencies. However, when an opportunity was sought for crossexamining the witnesses, the petitioner was not granted such anopportunity and therefore, it amounts to violation of the principlesof natural justice. 2.Counter affidavit is filed on behalf of the respondentswherein it is stated that the interstate sales are entered into theKVATIS right from February, 2012 onwards whereas as far as thepresent assessment is concerned, it is during the period 2011-12,when the KVATIS entry was not a mandatory process. It is alsostated that the petitioner is an assessee on the rolls of the office -:2:- of the Agricultural Income Tax and Commercial Tax Officer,Alathur, Palakkad District. Petitioner filed monthly and annualreturns for the year 2011-2012. Petitioner also filed auditedstatement as required under Section 42 of the KVAT Act, 2003. Onverification of the documents and details available in thedepartmental computer network KVATIS, certain irregularitieswere noticed. The details are mentioned in paragraph 4, whichreads as under; “(i)Interstate purchases found in KVATIS isRs.38,01,400/-. This purchase not seen in thereturns and the audited statements. (ii)Interstate sales seen in audited statement isRs.29,78,750/-. But the interstate sales seen inKVATIS is Rs.21,49,400/-. Interstate sale in returnsis NIL. As the petitioner has not conceded theseentire interstate sales, the tax due has not beenpaid by the petitioner in 2011-2012. The dealer hasnot requested to revise the returns as providedunder Section 42(2) of the KVAT Act 2003. The taxhas to be collected with interest due from thereturn period. The action has been initiated by theassessing authority. (iii)Purchase from unregistered dealers as per -:3:- audited statement is Rs.2,16,70,369/-. Purchasefrom unregistered dealers as per KVATIS &RETURNS is Rs.1,87,51,194/-. Hence the auditedstatement shows an excess purchase ofRs.29,19,175/-.” (ii)Interstate sales seen in audited statement isRs.29,78,750/-. But the interstate sales seen inKVATIS is Rs.21,49,400/-. Interstate sale in returnsis NIL. As the petitioner has not conceded theseentire interstate sales, the tax due has not beenpaid by the petitioner in 2011-2012. The dealer hasnot requested to revise the returns as providedunder Section 42(2) of the KVAT Act 2003. The taxhas to be collected with interest due from thereturn period. The action has been initiated by theassessing authority. (iii)Purchase from unregistered dealers as per -:3:- audited statement is Rs.2,16,70,369/-. Purchasefrom unregistered dealers as per KVATIS &RETURNS is Rs.1,87,51,194/-. Hence the auditedstatement shows an excess purchase ofRs.29,19,175/-.” 3.The main contention urged by the petitioner is that theentry relating KVATIS was regularised only by February, 2012 andtherefore the said entries now relied upon by the Officer cannotbe taken as a mandate alleging that there had been unaccountedpurchases from registered dealers as well as unregistereddealers. 4.In the counter affidavit, it is submitted that petitioner has shown clear pattern of suppression throughout the year.Request for summoning suppliers is only for prolonging the case.Further, it is stated that by not disclosing the inter statepurchases in time through monthly returns and paying tax onsales in time has caused considerable revenue loss to thedepartment. It is further stated that the petitioner has done interstate purchase by issuing form 8F declaration throughdepartment check posts. Therefore, it is contended that the action of the assessing authority is in accordance with law. 5.Respondent also submit that the notice had beenissued and sufficient opportunity had been given to the petitionerfor the defence. 6.True that it might be a case where the KVATISdeclaration as online in Form 8F has been made mandatory sinceFebruary, 2012. But the said infirmity, if any, only relates to thepurchasers. The assessing officer had found out other violationsas well. Even otherwise, the question is whether, not providingthe opportunity to the petitioner to cross examine such dealershas caused any prejudice to the petitioner. Whether suchprejudice had been caused or not is a factual dispute which has tobe considered taking into account all the facts and circumstancesinvolved in the matter, which aspect cannot be looked into by thisCourt in a writ petition under Article 226 of the Constitution ofIndia. It is for the appellate authority while exercising appellatejurisdiction to consider all such matters which are required toconsidered, whether the order suffers from lack of giving anyopportunity to cross examine the dealers in question. Under such -:5:- circumstances, I do not find any reason to interfere with Ext.P3order. Hence, reserving right of the petitioner to prefer appeal before the competent authority, this writ petition is dismissed. Rp4/07/2016 Sd/- A.M. SHAFFIQUE, JUDGE //True Copy// P.S to Judge