ELSY.P.V. V. THE COMMERCIAL TAX OFFICER,MANANTHAVADY

WP(C)/35920/2010

AI Insights

The case involves Smt. Elsy P.V., the petitioner, who owns M/S. Sona Timbers, and her application for registration under the KVAT Act, which was rejected by the Commercial Tax Officer. The rejection was based on the assertion that the petitioner was seeking registration as a benami of her husband, who was already a registered dealer in furniture and had been involved in tax evasion. The petitioner contested the rejection, arguing that the decision was made without proper legal basis and without affording her an opportunity for a hearing. The court found that the rejection violated the procedural requirements of the KVAT Act, leading to the setting aside of the order and remitting the case for a fresh decision.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 727068 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 10-01-2011
• Assessment Year: misc
• Laws Referred To: Kerala Value Added Tax Act, 2003
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: C K GOVINDAN
• Assessee Lawyers: P N NAMBOODIRI
• Keywords: Benami business; Hearing Opportunity; KVAT Act; Registration application; Evasion prove commodity
• Section: 16; 16(11)

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 10TH JANUARY 2011 / 20TH POUSHA 1932 WP(C).No. 35920 of 2010(L) -------------------------- PETITIONER: ------------------ SMT. ELSY P.V., M/S. SONA TIMBERS, ANJUKUNNU P.O., MANANTHAVADY. BY ADV. SRI.P.N.DAMODARAN NAMBOODIRI RESPONDENTS: ---------------------- 1. THE COMMERCIAL TAX OFFICER, DEPARTMENT OF COMMERCIAL TAXES, MANANTHAVADY, WAYANAD DISTRICT, PIN-670 645. 2. THE INSPECTING ASST. COMMISSIONER, DEPARTMENT OF COMMERCIAL TAXES, KALPETTA, WAYANAD-673 121. 3. DEPUTY COMMISSIONER, DEPARTMENT OF COMMERCIAL TAXES, KALPETTA, WAYANAD-673 121. BY SR.GOVT.PLEADER SRI.C.K.GOVINDAN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10/01/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K.ABDUL REHIM, J. = = = = = = = = = = = = = = WP(C).No.35920 of 2010-L. = = = = = = = = = = = = = = Dated this the 10th January, 2011. J U D G M E N T Petitioner is aggrieved by Ext.P7 order through which the application for registration filed under Section 16 of the Kerala Value Added Tax Act, 2003 (KVAT Act) was rejected. It is submitted that the reasons stated in Ext.P7 is not legal or tenable and it is not a proper reason for rejecting application for registration. 2. On a perusal of Ext.P7 it is evident that the first respondent had referred the matter to the 2nd respondent, the Inspecting Assistant Commissioner, for approval, since the commodity of Timber is included in the application which is an 'evasion prove commodity'. The 2nd respondent in turn had rejected the application stated that the husband of the petitioner is a registered dealer engaged in the business of furniture and that the petitioner who is the applicant is seeking registration only as a benami of her WP(C).No.35920 of 2010-L. 2 husband. The petitioner had produced copy of the order issued by the 2nd respondent in this regard as Ext.P9. It is stated therein that the husband of the petitioner who is conducting business as 'Soniya Furniture' had transported veneers below floor rate, as per the local audit report of the Commercial Tax Checkpost, Muthanga, and that this is a benami business and not a sister concern of the business conducted by the husband. 3. Contention of the petitioner is that, both Ext.P9 as well as Ext.P7 are highly cryptic orders issued without application of mind and that the reason for rejection mentioned are not legally valid, considering the requirements provided under Sec.16 of the KVAT Act for granting registration. It is further contended that the findings that the petitioner is seeking registration for benami business of her husband, is without any basis. On the other hand, according to the petitioner, she has got independent source of income for conducting such business. In support of such contention she had produced copies of WP(C).No.35920 of 2010-L. 3 Income Tax returns. Learned counsel for the petitioner submitted that, the decision in this regard was taken only based on a statement recorded from the petitioner, wherein she had no opportunity to disclose the business conducted by her husband. 4. A further contention raised by the petitioner is that the rejection is unsustainable on the basis of non- compliance of the mandatory legal procedure. Learned counsel points out that Sec.16(11) of the KVAT Act mandates that, an application for registration or renewal shall not be refused without affording an opportunity of hearing to the dealer concerned. On that basis the petitioner points out that Ext.P7 impugned order is unsustainable, because no opportunity of hearing was afforded. Learned counsel further contends that the first respondent, who is the competent authority vested with the power to consider an application for registration, had not taken any independent decision on the matter. 5. Without considering merits of other contentions, I WP(C).No.35920 of 2010-L. 4 am of the view that the order impugned is violative of the provisions contained under Sec.16(11) of the KVAT Act. Therefore, I am inclined to set aside the order and to remit the matter back to the first respondent for fresh consideration. It is left open to the petitioner to raise all other contentions before the first respondent. 6. In the result, Ext.P7 is hereby quashed. The first respondent is directed to consider the matter afresh after, affording an opportunity of personal hearing to the petitioner. Needless to say that the petitioner shall be permitted to produce further documents if any in support of her claim. A fresh decision in this regard shall be taken as early as possible, at any rate within a period of one month from the date of receipt of a copy of this Judgment. All the contentions raised in this writ petition are left open for challenge. C.K.ABDUL REHIM, (Judge) Kvs/- "