BIJU ABRAHAM V. AGRL.INCOME TAX & COMMERCIAL TAX

WP(C)/10392/2014

AI Insights

The case involves Biju Abraham, a registered timber merchant with branches in Theni, Tamil Nadu, and Ranni, Kerala. The dispute arose from the assessment order issued by the Agrl. Income Tax & Commercial Tax Officer, Ranni, which rejected the petitioner's claim for exemption on an interstate stock transfer of timber valued at Rs.4,00,74,502. The petitioner argued that the transaction was a stock transfer without physical movement of goods, thus not constituting an interstate sale. The initial rejection was based on the claim that the petitioner did not provide proper accounts, despite the absence of physical movement. The High Court found that the petitioner's detailed explanations were not considered in the final order, leading to the setting aside of the order and a directive for a fresh assessment.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 699326 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 11-04-2014
• Assessment Year: misc
• Laws Referred To: KVAT & CST Acts
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SHOBHA EAPEN
• Assessee Lawyers: K N SREEKUMARAN; P D UNNIKKANNAN NAIR
• Keywords: Assessment Order; Exemption Claim; Inter-state sale; Stock Transfer; Timber Merchant
• Section: 25(1)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON FRIDAY, THE 11TH DAY OF APRIL 2014/21ST CHAITHRA, 1936 WP(C).No. 10392 of 2014 (Y) ---------------------------- PETITIONER(S): -------------------------- BIJU ABRAHAM, TIMBER MERCHANT, NELLICKAL, AYTHALA (PO) RANNI PATHANAMTHITTA (DT) BY ADVS.SRI.K.N.SREEKUMARAN SRI.P.D.UNNIKKANNAN NAIR RESPONDENT(S): ---------------------------- 1. AGRL. INCOME TAX & COMMERCIAL TAX OFFICER RANNI, PATHANAMTHITTA (DT) - 689 646 2. STATE OF KERALA REPRESENTED BY SECRETARY TO GOVERNMENT TAXES DEPARTMENT GOVERNMENT SECRETARIAT THIRUVANANTHAPURAM PIN 695 001 BY GOVERNMENT PLEADER SMT.SHOBHA ANNAMMA EAPEN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11-04-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 10392 of 2014 (Y) ---------------------------- APPENDIX PETITIONER(S)' EXHIBITS ------------------------------------- EXT.P1 - TRUE COPY OF THE SHOW CAUSE NO.32030955584/2011-12 DATED 28-1-2014 ISSUED BY THE 1ST RESPONDENT TO PETITIONER EXT.P2 - TRUE COPIES OF THE REPLY DATED 30-1-2014 AND THE DOCUMENTS FILED BY PETITIONER BEFORE 1ST RESPONDENT EXT.P3 - TRUE COPY OF THE ASSESSMENT ORDER NO.32030955584/2011-12 DATED 31-3-2014 ISSUED BY THE 1ST RESPONDENT TO PETITIONER. //True Copy// P.A. To Judge Mrcs P.R. RAMACHANDRA MENON, J. --------------------------------------- W.P.C.No.10392 OF 2014 --------------------------------------- Dated this the 11th April, 2014 JUDGMENT The petitioner is aggrieved by Ext.P3 order dated 31.03.2014. The case of the petitioner is that the petitioner is a registered dealer in timber under the KVAT & CST Acts, who is also having registration under the relevant provisions of law in Tamil Nadu as well. The petitioner has two branches, situated in 'Theni' in Tamil Nadu and at 'Ranni' in Kerala. Timber is being imported from abroad, either through the Tuticorin Port or the Cochin Port and the transactions are being separately accounted in the concerned branches. 2. The issue involved herein is in respect of timber, imported through Tuticorin Port. The sale effected in respect of the portion covered by the Theni branch is reflected in the books of accounts of the said branch. It is stated that, for convenience, the petitioner has shown the same as 'stock transfer' in the accounts, but there is no physical movement of the property from Kerala to Theni and therefore, it is not correct to say that the W.P.C.No.10392 OF 2014 2 interstate stock transfer for an extent of Rs.4,00,74,502/-, for which exemption was sought for, to be treated as inter-state sale. All the concerned consignments are supported by relevant documents and reflected in the books of accounts. The claim for exemption was rejected stating that no proper account was submitted by the petitioner, inspite of the fact that there was no physical movement of the goods. On receipt of Ext.P1 show cause notice, the petitioner has explained the position by submitting Ext.P2. But without discussing the facts and figures or explanation offered by the petitioner, the proceedings were finalised by the first respondent by passing Ext.P3 order, simply saying that the reply submitted by the petitioner did not have any merit and hence summarily rejected. 3. Heard the learned Government Pleader as well. 4. On going through Ext.P3, this Court finds that the version put forth by the petitioner as per Ext.P2 has never been adverted to. It is stated that it was “proposed to assess” to the best judgment basis under Section 25(1). The order passed by the first respondent vide Ext.P3 is not liable to be treated as a W.P.C.No.10392 OF 2014 3 'speaking order' and the matter requires to be reconsidered. 5. Accordingly, Ext.P3 is set aside. The first respondent shall reconsider the matter, after giving an opportunity of hearing and appropriate orders shall be passed in accordance with law, also taking note of the contentions of the petitioner vide Ext.P2, which shall be done at the earliest, at any rate, within 'six weeks' from the date of receipt of a copy of this judgment. The petitioner shall produce a copy of this judgment along with a copy of the writ petition before the first respondent for further steps. Writ petition is disposed of. Sd/- P.R. RAMACHANDRA MENON, JUDGE sd "