M/S. LAL STEELS PRIVATE LTD. V. THE COMMERCIAL TAX OFFICER (IN-CHARGE)

WP(C)/39573/2015

AI Insights

The case involves M/s. Lal Steels Private Ltd., a company engaged in the manufacture and sale of iron and steel products, which challenged an order (Ext.P5) issued by the Commercial Tax Officer, Palakkad. The order disallowed input tax credit claims amounting to Rs.32,63,142/- for the assessment year 2012-2013, based on discrepancies noted in the company's Form 13 & 13A statements and the reconciliation statement provided. The petitioner argued that the order was passed without proper consideration of the submitted documents and in violation of procedural requirements under Section 11(9) of the KVAT Act. The government contended that the reconciliation statement did not endorse the tax credit claims. The High Court of Kerala, after hearing both parties, decided not to interfere directly and directed the petitioner to seek relief through the statutory appeal process provided under the KVAT Act.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 744793 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 01-08-2023
• Assessment Year: misc
• Other Referred Cases: Genpact India Private Limited v. Deputy Commissioner of Income Tax and Another [Civil Appeal No.8945 of 2019 @ SLP (C) No.20728 of 2019]
• Laws Referred To: Kerala Value Added Tax Act, 2003
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: V K SHAMSUDHEEN
• Assessee Lawyers: HARISANKAR MENON; MEERA MENON; MAHESH MENON
• Keywords: Audit report; Certiorari; Certiorari; Input tax credit; KVAT Act; Reconciliation statement; Writ petition
• Section: 25(1); 55; 11(9)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN TUESDAY, THE 1ST DAY OF AUGUST 2023 / 10TH SRAVANA, 1945 WP(C) NO. 39573 OF 2015 PETITIONER: M/S. LAL STEELS PRIVATE LTD. NIDA, KANJIKODE, PALAKKAD, REPRESENTED BY ITS DIRECTOR, BHARATH KUMAR TANTIA. BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON SRI.MAHESH V.MENON RESPONDENTS: 1 THE COMMERCIAL TAX OFFICER (IN-CHARGE) OFFICE OF THE ASST.COMMISSIONER (ASSESSMENT), COMMERCIAL TAXES SPECIAL CIRCLE, PALAKKAD-678001. 2 THE INSPECTING ASST.COMMISSIONER DEPARTMENT OF COMMERCIAL TAXES, PALAKKAD-678001. ADV.V.K.SHAMSUDHEEN – SENIOR GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 01.08.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P. (C) No.39573 of 2015 2 JUDGMENT The writ petition is filed with the following prayers: a. To quash Ext. P5 order passed by the 1st respondent by the issue of a writ of certiorari or such other writ or order or direction. b. To grant the petitioner such other incidental reliefs including the costs of these proceedings. 2. Petitioner is a private limited company engaged in the manufacture and sale of iron and steel products. It is an assessee on the rolls of the 1st respondent. The books of accounts of the petitioner for the assessment year 2012-2013 was called for by the 1st respondent. Subsequent to the filing of the audit report in Form 13 & 13A along with balance sheet, the 1st respondent issued Ext.P3 notice under Section 25(1) of the Kerala Value Added Tax Act, 2003 (herein after be referred as 'Act'). 3. The petitioner has filed a detailed reply as Exts.P4 and P4A along with the reconciliation statement before the 1st respondent. However, the 1st respondent finalised the W.P. (C) No.39573 of 2015 3 proceedings as per Ext.P5 order. According to the petitioner, Ext.P5 order is illegal. The demand as per Ext.P5 is on account of disallowing the input credit to the extent of Rs.32,63,142/-. The petitioner produced the entire accounts and details before the 1st respondent. Without properly considering the reconciliation statement, the 1st respondent has passed Ext.P5 order. Aggrieved by Ext.P5 order, the petitioner has approached this Court with the above writ petition. 4. Heard the learned counsel for the petitioner as well as the learned Government Pleader. 5. Leaned counsel for the petitioner submits that on receipt of Ext.P3 notice under Section 25(1), the petitioner has filed Ext.P4 detailed reply along with Ext.P4(A) reconciliation statement before the 1st respondent. Even though, the representative appeared before the 1st respondent and explained the details in the reconciliation statement and Form 13 & 13A statement, without proper consideration of the facts, the 1st respondent finalised the proceedings vide Ext.P5 order. 6. Learned counsel for the petitioner further submits that as per the provisions in Section 11(9) of the KVAT Act, the W.P. (C) No.39573 of 2015 4 1st respondent ought to have called for the original tax invoice from the petitioner in order to verify the input tax credit claim put forwarded by the petitioner. Ext.P5 order was passed without complying with the procedures related in Section 11(9) of the KVAT Act. 7. Per contra, the learned Government Pleader submits that the 1st respondent has given reasons while passing Ext.P5 order regarding the reconciliation statement. The 1st respondent has submitted that the reconciliation statement according to the 1st respondent was put up, since, Form 13 & 13A statement did not endorse the claim. 8. Learned counsel for the petitioner on the other hand submits that the reasons for the difference in Form 13 & 13A statement are very clearly explained in Ext.P4 reply filed by the petitioner before the 1st respondent. 9. However, all these issues can be considered by the statutory authority as provided under the Act and the petitioner can approach the statutory authority by way of appeal and produce the books of accounts and all documents before the concerned authority. W.P. (C) No.39573 of 2015 5 10. In Genpact India Private Limited v. Deputy Commissioner of Income Tax and Another [Civil Appeal No.8945 of 2019 @ SLP © No.20728 of 2019], the apex court held that the High Court must not interfere if there is an adequate efficacious alternate remedy available to the petitioner. Relevant portion of Para 15 of the judgment is extracted below for reference. “it is settled law that non-entertainment of petitions under writ jurisdiction by the High Court when an efficacious alternative remedy is available is a rule of self-imposed limitation. It is essentially a rule of policy, convenience and discretion rather than a rule of law. Undoubtedly, it is within the discretion of the High Court to grant relief under Article 226 despite the existence of an alternative remedy. However, the High Court must not interfere if there is an adequate efficacious alternative remedy available to the petitioner and he has approached the High Court without availing the same unless he has made out an exceptional case warranting such interference or there exist sufficient grounds to invoke the extraordinary jurisdiction under Article 226. It was further held that if the High Court is satisfied that the aggrieved party can have an W.P. (C) No.39573 of 2015 6 adequate or suitable relief elsewhere, it can refuse to exercise its jurisdiction. The Court, in extraordinary circumstances, may exercise the power if it comes to the conclusion that there has been a breach of the principles of natural justice or the procedure required for decision has not been adopted.” 11. The learned counsel for the petitioner doesn't have a case that there was violation of any principles of natural justice. Ext.P5 order also reveals that the petitioner was afforded an opportunity of hearing by the 1st respondent. The petitioner has not made out any exceptional case warranting interference by this Court under Article 226 of the Constitution of India. The petitioner has an alternate efficacious remedy of statutory appeal provided under Section 55 of the KVAT Act. 12. On consideration of the entire facts of the case, I am of the opinion that the writ petition can be disposed of with a direction to the petitioner to approach the statutory authority by way of an appeal. 13. Accordingly, the writ petition is disposed of as follows: 1. The petitioner is directed to file an appeal W.P. (C) No.39573 of 2015 7 against Ext.P5 order before the statutory authority by way of appeal within a period of one month from the date of receipt of a certified copy of this judgment. 2. The Appellate Authority shall take a lenient view, while considering the appeal, stay petitions and delay petition, regarding the period during which the writ petition is pending before this Court. 3. The petitioner shall move the Appellate Authority within one month from the date of receipt of a certified copy of the judgment. The recovery proceedings pursuant to Ext.P5 shall be kept in abeyance for a period of two months from today. 4. The petitioner shall be afforded an opportunity to produce all supporting documents furnished for the assessment year 2012-2013, while appeal is being considered by the appellate authority. W.P. (C) No.39573 of 2015 8 5. The appellate authority shall also verify the original tax invoices as stated in Section 11(9) of the Act and consider and pass orders within a period of three months thereafter. Sd/- SHOBA ANNAMMA EAPEN JUDGE SMF W.P. (C) No.39573 of 2015 9 APPENDIX OF WP(C) 39573/2015 PETITIONER EXHIBITS EXHIBIT-P1: COPY OF RETURN FOR 2012-13 FILED BY THE PETITIONER 21.06.2013. EXHIBIT-P2: COPY OF AUDIT REPORT OF THE PETITIONER ISSUED BY K.V.VENKITARAMAN, CHARTERED ACCOUNTANT. EXHIBIT-P2(A): COPY OF BALANCE SHEET AND PROFIT & LOSS ACCOUNT OF THE PETITIONER 15.07.2013. EXHIBIT-P3: COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT 23.09.2015. EXHIBIT-P4: COPY OF REPLY FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT 24.10.2015. EXHIBIT-P4(A): COPY OF RECONCILIATION STATEMENT OF THE PETITIONER. EXHIBIT-P5: COPY OF ORDER ISSUED BY THE 1ST RESPONDENT 30.10.2015. "