P.V.RON V. THE AGRICULTURAL INCOME TAX AND COMMERCIAL TAX OFFICER

WP(C)/30486/2015

AI Insights

The case involves P.V. Ron, the proprietor of M/s. Gloria Traders, who challenged an assessment order issued by the Agricultural Income Tax and Commercial Tax Officer, Alathur, under the KVAT Act, 2003. The petitioner contended that the order violated the principles of natural justice as he was not allowed to cross-examine witnesses regarding certain purchases. The respondents countered that the petitioner had a history of suppression and non-disclosure of interstate sales and purchases, which were evident from the KVATIS entries and the petitioner's own audited statements. The court dismissed the writ petition, emphasizing that the factual disputes regarding the entries and the alleged suppression were matters for the appellate authority to resolve.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 699655 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 04-07-2016
• Assessment Year: misc
• Laws Referred To: KVAT Act, 2003
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: LILLY
• Assessee Lawyers: HARISANKAR MENON; MEERA MENON
• Keywords: Assessment Order; Interstate sales; KVATIS; Natural Justice; Violation of Principles
• Section: 25(1); 42; 42(2)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE MONDAY, THE 4TH DAY OF JULY 2016/13TH ASHADHA, 1938 WP(C).No. 30486 of 2015 (I) --------------------------------------- PETITIONER(S): ---------------------- P.V.RON, AGED 33 YEARS, M/S.GLORIA TRADERS, KIZHAKKANCHERRY ROAD, VADAKKANCHERRY, P ALAKKAD DISTRICT. BY ADVS.SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENT(S): ------------------------- THE AGRICULTURAL INCOME TAX AND COMMERCIAL TAX OFFICER, ALATHUR-678 541. BY GOVERNMENT PLEADER SMT.LILLY K.T. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04-07-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: PJ WP(C).No. 30486 of 2015 (I) -------------------------------------- APPENDIX PETITIONER(S)' EXHIBITS ------------------------------------- P1 : COPY OF NOTICE ISSUED BY THE RESPONDENT TO THE PETITIONER DT 22-6-2015 P2 : COPY OF LETTER SUBMITTED BY THE PETITIONER BEFORE THE RESPONDENT DT 6-7-2015 P3 : COPY OF ORDER ISSUED BY THE RESPONDENT TO THE PETITIONER DT 26-8-2015. RESPONDENT(S)' EXHIBITS --------------------------------------- NIL. / TRUE COPY / P.S. TO JUDGE PJ A.M. SHAFFIQUE, J. =============== W.P. (C) No. 30486 of 2015 ================== Dated this, the 4th day of July, 2016 J U D G M E N T Petitioner challenges Ext.P3 by which an order of assessment had been passed under Section 25(1) of the KVAT Act, 2003. The main contention urged by the petitioner for bypassing the alternate remedy is that there is violation of the principles of natural justice. It is stated that the Officer had given details of certain purchases made by the petitioner from certain agencies. However, when an opportunity was sought for cross examining the witnesses, the petitioner was not granted such an opportunity and therefore, it amounts to violation of the principles of natural justice. 2. Counter affidavit is filed on behalf of the respondents wherein it is stated that the interstate sales are entered into the KVATIS right from February, 2012 onwards whereas as far as the present assessment is concerned, it is during the period 2011-12, when the KVATIS entry was not a mandatory process. It is also stated that the petitioner is an assessee on the rolls of the office W.P(C) No.30486/15 -:2:- of the Agricultural Income Tax and Commercial Tax Officer, Alathur, Palakkad District. Petitioner filed monthly and annual returns for the year 2011-2012. Petitioner also filed audited statement as required under Section 42 of the KVAT Act, 2003. On verification of the documents and details available in the departmental computer network KVATIS, certain irregularities were noticed. The details are mentioned in paragraph 4, which reads as under; “(i) Interstate purchases found in KVATIS is Rs.38,01,400/-. This purchase not seen in the returns and the audited statements. (ii) Interstate sales seen in audited statement is Rs.29,78,750/-. But the interstate sales seen in KVATIS is Rs.21,49,400/-. Interstate sale in returns is NIL. As the petitioner has not conceded these entire interstate sales, the tax due has not been paid by the petitioner in 2011-2012. The dealer has not requested to revise the returns as provided under Section 42(2) of the KVAT Act 2003. The tax has to be collected with interest due from the return period. The action has been initiated by the assessing authority. (iii) Purchase from unregistered dealers as per W.P(C) No.30486/15 -:3:- audited statement is Rs.2,16,70,369/-. Purchase from unregistered dealers as per KVATIS & RETURNS is Rs.1,87,51,194/-. Hence the audited statement shows an excess purchase of Rs.29,19,175/-.” 3. The main contention urged by the petitioner is that the entry relating KVATIS was regularised only by February, 2012 and therefore the said entries now relied upon by the Officer cannot be taken as a mandate alleging that there had been unaccounted purchases from registered dealers as well as unregistered dealers. 4. In the counter affidavit, it is submitted that petitioner has shown clear pattern of suppression throughout the year. Request for summoning suppliers is only for prolonging the case. Further, it is stated that by not disclosing the inter state purchases in time through monthly returns and paying tax on sales in time has caused considerable revenue loss to the department. It is further stated that the petitioner has done inter state purchase by issuing form 8F declaration through department check posts. Therefore, it is contended that the W.P(C) No.30486/15 -:4:- action of the assessing authority is in accordance with law. 5. Respondent also submit that the notice had been issued and sufficient opportunity had been given to the petitioner for the defence. 6. True that it might be a case where the KVATIS declaration as online in Form 8F has been made mandatory since February, 2012. But the said infirmity, if any, only relates to the purchasers. The assessing officer had found out other violations as well. Even otherwise, the question is whether, not providing the opportunity to the petitioner to cross examine such dealers has caused any prejudice to the petitioner. Whether such prejudice had been caused or not is a factual dispute which has to be considered taking into account all the facts and circumstances involved in the matter, which aspect cannot be looked into by this Court in a writ petition under Article 226 of the Constitution of India. It is for the appellate authority while exercising appellate jurisdiction to consider all such matters which are required to considered, whether the order suffers from lack of giving any opportunity to cross examine the dealers in question. Under such W.P(C) No.30486/15 -:5:- circumstances, I do not find any reason to interfere with Ext.P3 order. Hence, reserving right of the petitioner to prefer appeal before the competent authority, this writ petition is dismissed. Sd/- A.M. SHAFFIQUE, JUDGE Rp4/07/2016 //True Copy// P.S to Judge "