HILLWOOD TIMBERS V. DEPUTY COMMISSIONER-I

WP(C)/12026/2020

AI Insights

The case involves Hillwood Timbers, a registered dealer under the KVAT and CST Act, who challenged an assessment order dated 23.3.2020 for the Assessment Year 2013-14. The petitioner argued that the turnover declared under the KVAT was correct and that there was no 'escaped turnover' as alleged by the respondent, the Deputy Commissioner-I Special Circle, State GST Department, Malappuram. The petitioner contended that the Income Tax Department had processed their return for the subsequent year without adjustments, implying no discrepancies. However, the court found that the matter involved disputed facts that required examination beyond the scope of a writ petition under Article 226, thus dismissing the petition.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 726610 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 18-06-2020
• Assessment Year: misc
• Laws Referred To: Income Tax Act, KVAT Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: THUSHARA JAMES
• Assessee Lawyers: PREMJIT NAGENDRAN
• Keywords: Assessment Order; Escaped turnover; Income Tax; KVAT; Disputed turnover
• Section: 25(1); 143(1)(a); 25AA

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE AMIT RAWAL THURSDAY, THE 18TH DAY OF JUNE 2020 / 28TH JYAISHTA, 1942 WP(C).No.12026 OF 2020(C) PETITIONER/S: HILLWOOD TIMBERS MAKKARAPARAMBA, MALAPPURAM-676 507 REPRESENTED BY V.SHAREEF, MANAGING PARTNER. BY ADV. SRI.PREMJIT NAGENDRAN RESPONDENT/S: DEPUTY COMMISSIONER-I SPECIAL CIRCLE, STATE GST DEPARTMENT, MALAPPURAM-676 505. OTHER PRESENT: GP DR THUSHARA JAMES THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18.06.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC.12026/20 2 JUDGMENT Dated this the 18th day of June 2020 The present writ petition is directed against the assessment order dated 23.3.2020, Ext.P8, pertaining to the Assessment Year 2013-14 passed by the respondent. 2. In support of the aforementioned prayer, it is averred that the assessing authority under the Income Tax vide letter dated 3.6.2020 informed the petitioner that the Return of the Income for the assessment year 2014-2015 had been processed under Section 143[1][a] of the Act without any adjustments and consequently there exists no assessment order for 2014-15. Assessing Authority under the KVAT Act noticed that the sales turnover fixed by the Income tax Department for FY 2013-14 was more than the turnover declared before him in the Annual Return, resulting into passing of impunged assessment order dated 23.3.2020 holding the difference as 'escaped turnover'. Petitioner had throughout the proceedings under Section 25(1) of the Act initiated by the respondent, WPC.12026/20 3 maintained that there existed no assessment order under the Income Tax Act pertaining to the assessment year. Thus it could not have fallen in 'escaped turnover' under the KV Act. 3. The petitioner is a registered dealer under the KVAT and CST Act and is involved in sales of timber as well as manufacturing and marketing wooden furniture, building materials etc. For the assessment year 2013-14, the petitioner achieved a total sales turnover of Rs.1,261,29,080/- and the said sales turnover was disclosed before the respondent as evidenced from the statement in From 13,13A. Simultaneously, the petitioner filed the return of Income under the Income tax Act with supporting documents including Audited Trading Account, Ext.P1. 4. On 19.3.2019, the respondent issued a notice u/s 25(1) of the Act alleging the difference in the return filed under the Income Tax Act viz-a-viz the K.V Act. Petitioner filed detailed reply to the proposals and despite that respondent did not accede such request. WPC.12026/20 4 5. It is submitted that the petitioner requested the assessing authority under the KV Act to supply the material received from the Income Tax Department. The said material was not complete alleging the difference of return whereas vide Exts.P9 and P10, the information sought from the Assistant Commissioner of Income Tax, Central Circle-2, revealed that the Income for the relevant assessment year was processed under Section 143(1) of the Income Tax Act. It is clear that the reason for initiating proceedings under Section 25(1) of the KVAT is non-existent. In such circumstances, the impugned order is not sustainable in the eyes of law and is liable to be set aside. In fact, it is void ab-initio, as the petitioner is not liable to pay such taxes even on account of suspension of the trading activities throughout the country, the petitioner has no means to meet the raised demand. 6. I have heard the learned counsel for the parties, appraised the paper book and of the view that there is no force and merit in the submissions. The order under challenge, Ext.P8 is appealable under Section 5 of the WPC.12026/20 5 erstwhile KV Act. It is a disputed question of fact as to whether the information received by the Assessment Authority from the Income Tax Department viz-a-viz the information to the petitioner is correct or otherwise. The veracity and legality of the same cannot be examined while exercising the power under Article 226 of the Constitution of India. It would be the domain of the appellate authority to examine each and every aspect, which the petitioner would be able to raise in an appropriate proceedings. Resultantly, the writ petition is devoid of the merits and accordingly dismissed. Sd/- AMIT RAWAL sab JUDGE WPC.12026/20 6 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF AUDITED TRADING ACCOUNT FOR F.Y. 2013.14 EXHIBIT P2 COPY OF REVISED NOTICE DATED 30.1.2020 U/S 25[1] R/W SEC.25AA OF KVAT ACT. EXHIBIT P3 COPY OF REPLY DATED 17.2.2020 TO EXT.P- 2 REVISED NOTICE. EXHIBIT P4 COPY OF LETTER DATED 11.3.2020 FROM RESPONDENT TO PETITIONER ENCLOSING COPIES OF RECORDS [EXTS.P-5 AND P-6] EXHIBIT P5 COPY OF LETTER DATED 11.12.2017 FROM ASST. COMMISSIONER OF IT, CEN.CIR-2 TO RESPONDENT. EXHIBIT P6 COPY OF ANNEXURE TO EXT.P-5. EXHIBIT P7 COPY OF ADDL. REPLY DATED 17.3.2020 TO EXT.P-2 FILED BY PETITIONER. EXHIBIT P8 COPY OF PROCEEDINGS DATED 23.3.2020 ISSUED BY RESPONDENT FOR 2013.14. "