Trading Company v. The Division Bench Judgment Would Not Beapplicable In The Present Case Insofar As The Government Itself

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN THURSDAY, THE 30TH DAY OF MARCH 2017/9TH CHAITHRA, 1939 W.P(C).No.8794 of 2017 (Y) --------------------------- PETITIONER(S):----------------- K.N.ANIRUDHAN, AGED 66 YEARS, S/O.NEELAKANTAN PANICKER, PROPRIETOR, M/S.APPAS LABHAKKADA, (FORMERLY APPAS AGENCIES) ZILLA COURT WARD, ALAPPUZHA. BY ADV. SRI.A.KRISHNAN. RESPONDENT(S):- --------------- 1. THE AGRICULTURAL INCOME TAX & COMMERCIAL TAX OFFICER, COLLECTORATE, ALAPPUZHA-688001. COLLECTORATE, ALAPPUZHA-688001. 2. STATE OF KERALA, REPRESENTED BY THE SECRETARY, COMMERCIAL TAXES DEPARTMENT, THIRUVANANTHAPURAM, PIN-695 001. R1 & R2 BY GOVERNMENT PLEADER SRI.V.K.SHAMSUDDIN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 30-03-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: --------------------------- APPENDIX PETITIONER(S)' EXHIBITS:--------------------------P1 : TRUE COPY OF THE NOTICE DATED 14-9-2015.P2 : TRUE COPY OF AMNESTY SCHEME DATED 27-8-2016.P3 : TRUE COPY OF THE ORDER DATED 7-12-2016 UNDER EXT P2 SCHEME FOR THE PERIOD FROM 2011-12 TO 2014-15.P4 : TRUE COPY OF THE ORDER DATED 14-12-2015.P4(a) : TRUE COPY OF THE DEMAND NOTICE.P5 : TRUE COPY OF THE REPLY DATED 2-1-2017. RESPONDENT(S)' EXHIBITS:-------------------------NIL.Vku/-[ true copy ] K. Vinod Chandran, J ---------------------------------------- W.P.(C) No.8794 of 2017-Y ---------------------------------------- Dated this the 30[th] day of March, 2017 JUDGMENT The petitioner is aggrieved with the assessment orderat Exhibit P4 for the year 2014-15, which was regularly carried outunder Section 24 of the Kerala Value Added Tax Act, 2003 [forbrevity “KVAT Act”]. 2. The petitioner was a presumptive dealer who hadadmittedly made some suppression in the years 2011-12 to2014-15. The suppression in each year would indicate that in eachof the said years, the turnover of the petitioner would go beyondthe presumptive limit as provided in Section 6(5) of the KVAT Act.The Government finding a number of such presumptive dealershaving practised suppression and exceeded the turnover limit,brought out Circular No.17/2016 dated 27.08.2016, produced asExhibit P2. The petitioner applied for amnesty under the Schemeand was granted the same for the years 2011-12 to 2014-15. Theorder of amnesty is found at Exhibit P3. The amounts demandedwere paid up by the petitioner. 3. Even prior to the amnesty order dated 07.12.2016,a notice under Section 24 was issued on audit assessment, asper Exhibit P1. The amnesty order at Exhibit P3 specificallyprovided that the assessment under Section 24 for the year2014-15 is not correlated with this. The pre-assessment notice atExhibit P1 was proceeded with and orders issued at Exhibit P4;which is impugned herein. 4. The first contention raised by the petitioner againstthe assessment made is that having paid tax under the amnestyscheme, there is no scope for carrying out any furtherassessment under Section 24. The next contention is with respectto the notice having indicated a proposal of additional tax ofRs.2,71,251/-, while the original order demanded an amount ofRs.5,38,106/-. The excess amount demanded was not intimatedto the petitioner and the same was bad for reason of violation ofprinciples of natural justice. 5. The learned Government Pleader, however,contends on the basis of the Division Bench decision of this Court in S.T.Rev. No.51 of 2012 dated 09.10.2013 [M/s.Yogesh WP(C) No.8794 of 2017 Trading Company v. State of Kerala] that if at all a suppressionis detected, then necessarily the turnover exceeding thepresumptive limit would have to be taxed at the regular rates. It isalso contended that the order at Exhibit P3 specifically saved theassessment under Section 24 for the year 2014-15. 5. The learned Government Pleader, however,contends on the basis of the Division Bench decision of this Court in S.T.Rev. No.51 of 2012 dated 09.10.2013 [M/s.Yogesh WP(C) No.8794 of 2017 Trading Company v. State of Kerala] that if at all a suppressionis detected, then necessarily the turnover exceeding thepresumptive limit would have to be taxed at the regular rates. It isalso contended that the order at Exhibit P3 specifically saved theassessment under Section 24 for the year 2014-15. 6. The Division Bench judgment would not beapplicable in the present case insofar as the Government itself having brought out an amnesty scheme, by which thepresumptive dealers were directed to be granted relief insofar ascomplying with the terms as is seen from Exhibit P2. However, itis also seen that the presumptive dealer/petitioner, who wasregistered with PIN number had converted to a regular dealership with TIN number from 01.01.2015. Even then, the assessmentunder Section 24 should have been done only for the period01.01.2015 to 31.03.2016. The amnesty applied for and amountsremitted by the petitioner for the year 2014-15, while he remainedunder the presumptive net cannot be disturbed. 7. In the above circumstance, Exhibit P4 assessmentorder is set aside. The Assessing Authority shall issue a fresh WP(C) No.8794 of 2017 notice, if so advised, for the period commencing from 01.01.2015;for the balance period in the said assessment year after verifyingthe books of accounts. The petitioner shall co-operate with theproceedings. The assessment shall be finalised in accordancewith law. The writ petition would stand allowed to the aboveextent. vku/- Sd/- K.Vinod ChandranJudge. [ true copy ]