Wp(C)/17167/2014 Of Sajith Lal v. Agricultural Income Tax And Commercial Tax Officer Vat Circle

iIN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN MONDAY, THE 21 DAY OF AUGUST 2023 / 30TH SRAVANA, 1945 WP(C) NO. 17167 OF 2014 PETITIONER: M.SAJITH LALMALAYIL HOUSE PONNADA: MANIYANCODE P.O, KALPETTA, WAYANAD DT.BY ADVS.SRI.P.RAGHUNATHSRI.PREMJIT NAGENDRAN RESPONDENT: AGRICULTURAL INCOME TAX AND COMMERCIAL TAX OFFICER: VAT CIRCLE, KALPETTA-670644. BY ADV.V.K.SHAMSUDHEEN-SENIOR GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21.08.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT The writ petition is filed by the petitioner with the following prayers: “A: Issue a writ of certiorari quashing the originals ofExts.P 7 to P 14 assessment orders: B: Pass such other orders as the Petitioner may prayfor and this Hon'ble Court may deem fit to grant inthe circumstances of the case; C: Award costs of the Petitioners.” 2.The case of the petitioner is as follows: The petitioner challenges the assessment orders Exts.P7 to P14 passed by the respondent for the assessment years2005-06 to 2012-13. The petitioner obtained a license on17.10.2012 from the Municipality, to operate a quarry in WardNo.I in R.S. No.97/PT in Kalpetta Village after obtaining aquarrying permit from Geology Department for extraction ofgranite building stone on 22.12.2010. Even after issuance oflicense by the Municipality, the petitioner could transport metalonly on the strength of “P Form” permit issued by the Geology Department. Though, the formalities commenced on22.10.2010, the effective license was issued only on17.10.2012 and thereafter the permit for transportation –Form “P” permits were issued only on 21.12.2012. 3.After obtaining the above license, the petitionerstarted operations at the quarry and applied to the GeologyDepartment for issuance of “P Forms” which were necessaryfor transporting of each lorry load of metal which is extractedfrom the quarry. The Department, on 21.12.2012 and30.01.2014, issued 600 “P Forms” which would enable to thepetitioners to transport 600 loads. Apparently, the petitionercould have achieved a sales of only Rs.6,05,000/- from21.12.2012 to 29.01.2014 (13 months) even going by the rateper load, as fixed by the Assessing Authority. Since thepetitioner did not have sales in excess of Rs.5 lakhs eitherduring the year ended 31.03.2013, the petitioner did not gethimself registered under the KVAT Act and the landsurrendered to the original owner and the business was closedduring the year 2013-14 . 4.The respondent issued pre-assessment notice proposing to carry out the assessments under Section 25 ofthe KVAT Act for the years 2005-06 to 2012-13. On receipt ofthe notice, the petitioner appeared before the respondentpersonally and pointed out the facts that he had been issuedonly 600 “P Forms” on 21.12.2012 and 30.01.2014 and alicense to run the quarry was issued only on 17.10.2012.Without considering the objections raised by the petitioner, theassessment orders were finalised by the assessing Authority asper Exts.P7 to P14 orders. Aggrieved by the same, thepetitioner has approached this Court with the above writpetition. 5.The respondent has filed a counter affidavitcontending that the petitioner has not registered under theKVAT Act, 2003, who was engaged in the business of sale ofgranite, metals and rubbles. The assessment notice wereissued on the basis of the local enquiry conducted by therespondent. Though, notice was issued to the petitioner, thepetitioner did not turn up to submit their objections. Thedetails were gathered from the Geology Department that thepetitioner was engaged in the sale of rubbles during the period 5.The respondent has filed a counter affidavitcontending that the petitioner has not registered under theKVAT Act, 2003, who was engaged in the business of sale ofgranite, metals and rubbles. The assessment notice wereissued on the basis of the local enquiry conducted by therespondent. Though, notice was issued to the petitioner, thepetitioner did not turn up to submit their objections. Thedetails were gathered from the Geology Department that thepetitioner was engaged in the sale of rubbles during the period from 2005-06. The details of royalty paid against the “P Form”to the Department of Geology itself proved that the petitionerwas engaged in large scale business of rubbles and thatexceeded the limits of taxable turnover. But no tax on saleswas seen remitted and the petitioner has not taken registrationunder the KVAT Act, 2013. Proposals were initiated forimposition of penalty of Rs.10,000/- under Section 67 of theKVAT Act. Though notice was served on the petitioner, thepetitioner did not respond to the said notice and all theassessment orders were decided ex-parte. The Authority hadno other option but to complete the best judgmentassessment. It is further contended that, every year, thepetitioner had received average 600 “P Forms” from theGeology Department. So number of “P Forms” issued is treatedas minimum 2 number of lorry load rubbles and estimation ismade on that basis. The proposal for assessment wascommunicated to the petitioner and duly served, but no replyhas been filed by the petitioner. It is also contended thatwithout availing the statutory remedy, the petitioner hasapproached this Court and the writ petition is liable to be dismissed. 6.Heard the learned counsel for the petitioner as wellas the learned Government Pleader. 7.Learned counsel for the petitioner submits that,though the formalities commenced on 22.10.2010, the licensewas issued only on 17.10.2012 and 550 “P Forms” were issuedon 21.12.2012 and 50 “P Forms” were issued on 30.01.2014.But the Assessing Authority has passed Exts.P7 to P14 ordersby taking into consideration 600 “P Forms” without anysupporting documents and have completed the assessment byfixing huge liability on the petitioner for no reason. It is furthersubmitted that, as revealed from Ext.P15, issued by theGeology Department, the petitioner was issued 550 “P Forms”in 2012 and 50 “P Forms” in 2014 and the assessment havebeen completed by the assessing authority by takingestimation of 600 “P Forms” each from 2005-06 upto 2012-13which is illegal and has to be set aside. It is also submittedthat on the date of finalisation of assessment order on30.01.2014, there was nothing on record to show that thepetitioner was issued 600 “P Forms” every year from 2005-06 to 2012-13. 8.Per Contra, the Learned Government Pleadersubmits that the petitioner was conducting business of granitemetals and rubbles from 2005-06 and was paying royalty ofRs.25,000/- from 2005-06. On the basis of the enquiryconducted by the Assessing Authority, Exhibits P7 to P14assessments have been completed. Though notices wereserved on the petitioner, he did not appear and henceassessments were completed as ex-parte. The petitioner hasgot efficacious statutory remedy, by way of appeal before thestatutory authority. 9.On perusal of Ext.P15 letter issued by the GeologyDepartment, it is seen that only total 600 'P forms' issued tothe petitioner on 21.12.2012 and 30.01.2014. However, inExts.P7 to P14 assessment orders, the Assessing Authority hasestimated local sales of the rubbles by calculating 600 “PForms” for the years from 2005-06 to 2012-13. Other thanthe contentions raised in the counter affidavit, the respondentshave not produced any supporting document to show that thepetitioner was issued 600 “P Forms” every year from 2005-06 9.On perusal of Ext.P15 letter issued by the GeologyDepartment, it is seen that only total 600 'P forms' issued tothe petitioner on 21.12.2012 and 30.01.2014. However, inExts.P7 to P14 assessment orders, the Assessing Authority hasestimated local sales of the rubbles by calculating 600 “PForms” for the years from 2005-06 to 2012-13. Other thanthe contentions raised in the counter affidavit, the respondentshave not produced any supporting document to show that thepetitioner was issued 600 “P Forms” every year from 2005-06 to 2012-13. On a perusal of Exts.P7 to P14 assessment orders,it is seen that the assessing Authority has come to a conclusionthat 600 of “P Forms” were issued every year from 2005-06 to2012-13 which appears to be factually not correct. Nosupporting documents could be produced by the assessingAuthority. Ext.P15 letter issued by the Geology Departmentdated 11.06.2014 ie after the date of the assessment orders. 10.Learned counsel for the petitioner further submitsthat the petitioner may be given one more opportunity tosubstantiate the entire grievance before the AssessingAuthority. 11.On consideration of the entire facts of the case, Iam of the opinion that Ext.P7 to P14 orders were passed bythe assessing authority without considering the factual aspectswith supporting documents, and hence interest of justice willbe best met, if one more opportunity is granted to thepetitioner to contest his case before the respondent. Accordingly, the Writ Petition is disposed of as follows: 1. Exts.P7 to P14 orders are set aside. 2. The Assessing Authority is directed to reconsider theentire issue, in accordance with law, taking intoconsideration Ext.P15 certificate issued by the GeologyDepartment which is produced along with this writpetition. entire issue, in accordance with law, taking intoconsideration Ext.P15 certificate issued by the GeologyDepartment which is produced along with this writpetition. 3. The petitioner shall appear before the Assessing Authorityon 20.09.2023 at 11.00 a.m. along with objections if any,and with all supporting documents. The petitioner is freeto raise all contentions including the question oflimitation, before the Assessing Authority. on 20.09.2023 at 11.00 a.m. along with objections if any,and with all supporting documents. The petitioner is freeto raise all contentions including the question oflimitation, before the Assessing Authority. 4. Before any such orders are passed, the AssessingAuthority shall afford the petitioner an opportunity ofbeing heard. The petitioner shall produce a certified copyof the judgment along with the copy of the writ petitionbefore the Assessing Authority for compliance. Authority shall afford the petitioner an opportunity ofbeing heard. The petitioner shall produce a certified copyof the judgment along with the copy of the writ petitionbefore the Assessing Authority for compliance. The writ petition is allowed accordingly. Sd/- SHOBA ANNAMMA EAPEN JUDGE SMF APPENDIX OF WP(C) 17167/2014 PETITIONER EXHIBITS EXHIBIT P15: PHOTOCOPY OF CERTIFICATE DT.11.06.2014ISSUED BY GEOLOGIST: DISTRICT OFFICE.EXHIBIT P16A: PHOTOCOPY OF APPLICATION UNDER RTI ACTDT.16.06.2014.EXHIBIT P16B: PHOTOCOPY OF COVERING LETTER FOR EXT.P16A.