M/S. VYSAK INTERNATIONAL HOTELS (P) LTD V. THE COMMISSIONER OF COMMERCIAL TAXES, THIRUVANANTHAPURAM

WA/1614/2014

AI Insights

The case involves M/s. Vysak International Hotels (P) Ltd, which appealed against the judgment of the learned Single Judge concerning penalties levied for non-filing of tax returns under the KGST Act. The appellant argued that the breach was technical and due to reasons beyond their control, including financial losses and takeover by KFC, which were not previously raised in lower proceedings. The court found that maximum leniency had already been shown to the appellant, as the penalty was reduced to an equal amount of tax, and penal interest was waived. The court dismissed the appeal, emphasizing the need for the appellant to comply with the remittance condition to benefit from the waiver of penal interest.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 727008 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 19-11-2014
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income-tax v. Chembara Peak Estates Ltd. [(1989)183 ITR 471], T.R.Ramachandran v. Sales Tax Officer [1977 (106 STC) 413 (Ker)]
• Laws Referred To: KGST Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: LIJU STEPHEN
• Assessee Lawyers: T M SREEDHARAN; V P NARAYANAN
• Keywords: Non-filing; Penalty; Tax; Technical breach; Waiver of penal interest
• Section: 45A

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC & THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN WEDNESDAY , THE 19TH DAY OF NOVEMBER 2014/28TH KARTHIKA, 1936 WA.No. 1614 of 2014 () IN WP(C).18011/2008 -------------------------------------------- AGAINST THE JUDGMENT IN WP(C) 18011/2014 of HIGH COURT OF KERALA DATED 10-07-2014 APPELLANT/PETITIONER : ------------------------------------ M/S. VYSAK INTERNATIONAL HOTELS (P) LTD GOVERNMENT HOSPITAL ROAD, PAYYANNUR REPRESENTED BY ITS MANAGING DIRECTOR SHRI. K.T.MATHE W. BY ADVS.SRI.T.M.SREEDHARAN (SR.) SRI.V.P.NARAYANAN RESPONDENTS/RESPONDENTS : ------------------------------------------------------ 1. THE COMMISSIONER OF COMMERCIAL TAXES THIRUVANANTHAPURAM-695 001. 2. THE DEPUTY COMMISSIONER (APPEALS) COMMERCIAL TAXES, KOZHIKODE-673 001. 3. THE COMMERCIAL TAX OFFICER PAYYANNUR, PIN-670 024. BY SR.GOVERNMENT PLEADER SRI LIJU STEPHEN THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 19-11-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ANTONY DOMINIC & ANIL K.NARENDRAN, JJ. -------------------------------------------------- Writ Appeal No.1614 OF 2014 -------------------------------------------------- DATED THIS THE 19th DAY OF NOVEMBER, 2014 JUDGMENT ANTONY DOMINIC , J . This Writ Appeal is filed against the judgment of the learned Single Judge disposing of W.P.(C)No.18011/2008 filed by the appellant. The appellant is conducting a bar hotel. During the period from April 2005 to January 2006 and November 2006 and December, 2006, the appellant did not file its returns under the KGST Act ('the Act' for short) or remit the tax due. This led to initiation of proceedings under Section 45A of the Act and penalty of double the amount of tax was levied. Revision was filed before the second respondent, who by Exhibit P2 order upheld the penalty levied, but, however reduced the same to equal amount of tax. The second revision filed before the Commissioner was rejected by Exhibit P10 order. It was challenging these proceedings, the Writ Petition was filed. 2. In the judgment under appeal, learned Single Judge rejected the case of the appellant that it was only a technical breach. However, the learned Single Judge ordered that penal interest levied W.A.No.1614/14 -2- be waived, subject to the appellant remitting the amounts due within three months from the date of receipt of a copy of the judgment. It is this judgment which is under challenge before us. 3. We heard the learned Senior Counsel for the appellant and the learned Government Pleader appearing for the respondents. 4. The learned Senior Counsel for the appellant relied on the judgment of this Court in Commissioner of Income-tax v. Chembara Peak Estates Ltd. [(1989)183 ITR 471] and T.R.Ramachandran v. Sales Tax Officer [1977 (106 STC) 413 (Ker)] and contended that when the default is properly explained and where it is established that it was due to reasons beyond the control of the assessee that the default has occurred, assessee should not be visited with penalty. 5. Though this submission made by the learned Senior Counsel would appear to be attractive, these contentions are not seen raised either before the assessing authority or before the appellate or revisional authorities. In fact, the proceedings of the Assessing Officer show that, though the proposal was communicated to the appellant, the appellant did not file any objections against the proposal within the time allowed. W.A.No.1614/14 -3- 6. Coming to Exhibit P4 order passed by the first appellate authority, it shows that the appellant had only contended that they were prevented from filing monthly returns in time for reasons beyond their control and that the business was at a loss and there was shortage of funds, etc. Before the Commissioner, the contention raised was that the breach was a technical one and therefore did not merit levy of penalty. These orders, therefore, show that the contention now raised before us that the business was at a loss and that the KFC had taken over the establishment which prevented the appellant from filing the monthly returns or remitting the tax were not contentions that were raised before the aforesaid authorities. In such circumstances, we are not in a position to entertain or accept the contention now urged. 7. Admittedly, the appellant did not file return or remit tax during the period from April 2005 to January 2006 and November, 2006 and December 2006. This invited proceedings under Section 45A of the KGST Act. Though the maximum penalty of double the amount of tax was levied at the first instance, that is seen reduced by the first appellate authority and what is now levied is only equal amount of tax. The learned Single Judge has also W.A.No.1614/14 -4- waived the penal interest levied on the appellant. Therefore, maximum leniency has been shown to the appellant. In such circumstances, we do not find any reason to interfere with the judgment in appeal. 8. Be that as it may, having regard to the waiver of the penal interest ordered by the learned Single Judge, we direct that the said benefit would still be available to the appellant, provided the appellant remits the amount due within three months from the date of receipt of a copy of this judgment. The appeal is dismissed, subject to the above. Sd/- ANTONY DOMINIC, JUDGE Sd/- ANIL K.NARENDRAN, JUDGE dsn "