M/S. APOLLO GOLD PATTAMBI(LLP) V. THE COMMERCIAL TAX OFFICER

WP(C)/7605/2017

AI Insights

The case involves M/S. Apollo Gold Pattambi(LLP), represented by its designated partner Shri Sadaruddin Rayaroth, who filed a writ petition against the order passed by the Assessing Officer under the Kerala Value Added Tax Act, 2003. The petitioner contested the assessment order on the grounds of violation of natural justice, claiming that the officer did not provide reasons for the proposal and failed to grant an opportunity for a hearing as required under the KVAT Act. The court found that while the reasons for the proposal were somewhat provided, the lack of a specific hearing date and the composite nature of the notice were not in accordance with legal standards, leading to the decision to set aside the assessment order.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 735877 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 08-03-2017
• Assessment Year: misc
• Other Referred Cases: Suzion Infrastructure Service Ltd. v. CTO (Ker)
• Laws Referred To: Kerala Value Added Tax Act, 2003, Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: C E UNNIKRISHNAN
• Assessee Lawyers: T M SREEDHARAN; VANDANA MENON; DIVYA RAVINDRAN; MERLIN MANSY; V P NARAYANAN
• Keywords: Assessment; Hearing Opportunity; Income Tax; KVAT Act; Natural Justice
• Section: 143(3); 25(1); 67(1)(d)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN WEDNESDAY, THE 8TH DAY OF MARCH 2017/17TH PHALGUNA, 1938 WP(C).No. 7605 of 2017 (A) --------------------------- PETITIONER(S): ------------- M/S. APOLLO GOLD PATTAMBI(LLP), 5/1681, APPOLO TOWER, GURUVAYOOR ROAD JUNCTION, PATTAMBI, PALAKKAD DISTRICT, PIN 679 303, REP. BY ITS DESIGNATED PARTNER SHRI SADARUDDIN RAYAROTH. BY ADVS.SRI.T.M.SREEDHARAN (SR.) SMT.VANDANA MENON SMT.DIVYA RAVINDRAN SMT.MERLIN MANSY SRI.V.P.NARAYANAN RESPONDENT(S): -------------- 1. THE COMMERCIAL TAX OFFICER, DEPARTMENT OF COMMERCIAL TAXES, PATTAMBI - 679 303. 2. THE DEPUTY COMMISSIONER (APPEALS), DEPARTMENT OF COMMERCIAL TAXES, PALAKKAD - 678 001. 3. THE STATE OF KERALA, REP. BY CHIEF SECRETARY TO GOVERNMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM - 695 001. BY SPL. GOVERNMENT PLEADER SRI.C.E.UNNIKRISHNAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08-03-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: msv/ WP(C).No. 7605 of 2017 (A) --------------------------- APPENDIX PETITIONER(S)' EXHIBITS ----------------------- EXT.P1 TRUE COPY OF THE NOTICE U/S.25(1) OF THE ACT DATED 16.8.2016 ISSUED BY THE FIRST RESPONDENT EXT.P2 TRUE COPY OF REPLY DATED 17.9.2016 SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT EXT.P3 TRUE COPY OF PENALTY NOTICE U/S.67(1)(D) OF THE KVAT ACT, 2003 DATED 16.8.2016 ISSUED BY THE FIRST RESPONDENT EXT.P4 TRUE COPY OF REPLY DATED 17.9.2016 SUBMITTED TO EXHIBIT-P3 NOTICE BY THE PETITIONER BEFORE THE 1ST RESPONDENT EXT.P5 TRUE COPY OF ASST. ORDER DATED 26.12.2014 PASSED U/S. 143(3) OF THE INCOME TAX ACT, 1961 BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1(1), KOZHIKODE EXT.P6 TRUE COPY OF THE ORDER NO. A320911 34016/2012-13 DATED 31.12.2016 PASSED U/S. 25(1) OF THE KVAT ACT BY THE FIRST RESPONDENT ALONG WITH DEMAND NOTICE EXT.P7 TRUE COPY OF THE AUDIT REPORT IN FORM NO.13 & 13A ALONG WITH AUDITED COPY OF BALANCE SHEET AND PROFIT & LOSS ACCOUNT. RESPONDENT(S)' EXHIBITS ----------------------- NIL //TRUE COPY// P.S.TO JUDGE Msv/ K. VINOD CHANDRAN, J - - - - - - - - - - - - -- - - - - - - - - - - - - - - - W.P(C) No. 7605 of 2017 A - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 08th day of March, 2017 J U D G M E N T The petitioner is aggrieved with Ext.P6 order passed by the Assessing Officer for reason of violation of principles of natural justice. The specific plea taken is that the Officer has not furnished the reason in support of the proposal and that the petitioner was not granted an opportunity of hearing as provided under proviso to Section 25(1) of the Kerala Value Added Tax Act, 2003 ( for short “KVAT Act” only). 2. With respect to the reasons in support of the proposal, it is seen that the Officer by Ext.P1 invoice had informed the petitioner that there are no details supplied in the return, as to the income conceded in the assessment year 2012-13(financial year as per the Income Tax Act) before the WPC.No. 7605/2017 : 2 : Income Tax authorities. Hence, based on the income conceded of Rs.1,17,17,362/-; which the assessee as a jeweler had declared before the Income Tax Department, the sales turnover was computed, for which tax under the KVAT Act was sought to be imposed. 3. It cannot be said that the reasons for the proposal has not been supplied, since it was for the assessee to establish before the Officer that the income as declared before the Income Tax authority was not with respect to the sales conducted in the jewellery and that it was sourced from elsewhere or other activities. In such circumstance, there is no ground to interfere with the notice or the assessment order for reason of the proposals being not clear. 4. With respect to the opportunity for hearing, the petitioner had by Ext.P2 sought for a hearing which is not seen to have been granted. The notice as per Ext.P1 also does not indicate a specific date of hearing. A composite notice calling WPC.No. 7605/2017 : 3 : for objections and providing a date of hearing as has been deprecated by this Court in [2010] 35 VST 451 (Ker) (Suzion Infrastructure Service Ltd. v. CTO (Ker). 5. In the totality of the circumstances, especially since the reply specifically sought for a hearing, which is also a statutory mandate, Ext.P6 would stand set aside for reason of violation of principles of natural justice. The petitioner would hence appear before the Assessing Officer on 29.03.2017 with any supporting documents and the Assessing Officer shall give a date of hearing within two weeks, with personal acknowledgment taken and the assessment finalised within a month from the date of hearing. It is made clear that this Court has not made any observation on the merits of the case. Writ petition is disposed of. Sd/- (K. VINOD CHANDRAN, JUDGE) jma //true copy// P.A To Judge "