Disposed

M/S.Central Advertising Agency and Anr. v. the State of Kerala and Others

Kerala HC20 Dec 2011WP(C)/34068/2010

Case brief

AI extract

What is this about?

The court observed that the petitions are proposal notices under Section 64 of the Kerala VAT Act alleging liability on copyright royalty transfers. It disposed of the writ by directing the petitioners to file objections before the authority, noting retrospective exemption under the Finance Act, 2011.

What did the court decide?

The writ petition was disposed of directing the petitioner to file objections against the proposal notices Ext.P1 and P2 within two weeks.

M/S.Central Advertising Agency and Anr. Vs the State of… — Money Laundering | Kerala HC (2011)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM

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TUESDAY, THE 20TH DAY OF DECEMBER 2011/29TH AGRAHAYANA 1933

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WP(C).No. 34068 of 2010 (C)

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---------------------------

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PETITIONER(S):

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1. M/S CENTRAL ADVERTISING AGENCY, ANAND THEARTRE BUILDINGS,

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T.B.ROAD,KOTTAYAM-686001

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REPRESENTED BY THE PARTNER,MATHEW GEORGE.

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2. M/S CENTRAL PICTURES,ANAND THEATRE BUILDINGS,T.B.ROAD,KOTTAYAM-686001 REPRESENTED BY, THE PARTNER,MATHEW GEORGE.

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BY ADVS.SRI.C.K.THANU PILLAI SRI.K.P.JOY

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RESPONDENT(S):

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1. THE STATE OF KERALA,REPRESENTED BY THE SECRETARY TO GOVERNMENT,TAXES DEPARTMENT SECRETARIAT,THIRUVANANTHAPURAM.

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2. THE INTELLIGENCE OFFICER,SQUAD NO.III, COMMERCIAL TAXES,THIRUVANANTHAPURAM AT NEYYATTINKARA.

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BY GOVERNMENT PLEADER C.K. GOVINDAN

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 20-12-2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).No. 34068 of 2010 (C)

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APPENDIX

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PETITIONERS EXHIBITS

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P1 COPY OF NOTICE NO. CR-8(1)/10-11 DATED 04-10-2010 ISSUED BY THE 2ND RESPONDENT

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P2 COPY OF NOTICE NO. CR-8(7)/10-11 DATED 04-10-2010 ISSUED BY THE 2ND RESPONDENT

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P3 COPY OF REPRESENTATION DATED 25-10-2010 PRESENTED BY THE KERALA FILM PRODUCERS ASSOCIATION TO THE 1ST RESPONDENT

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RESPONDENTS EXHIBITS

NIL

TRUE COPY

P.A. TO JUDGE

SMM

C.K.ABDUL REHIM, J.

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W.P.(C) No.34068 OF 2010

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Dated this the 20^th day of December , 2011

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J U D G M E N T

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Penalty under Section 64 of the Kerala Value Added Tax Act (KVAT) was proposed against the petitioners, as intimated through Ext.P1 and P2 notices. The allegation in the notices is that the petitioners have failed to remit tax on the turn over relating to sale of copy right. It is alleged that the petitioners have received huge amounts by way of royalty for granting rights to telecast cinematic films. According to the respondents, the right transferred by virtue of the agreement to use the cinematic film for the purpose of telecast on payment of consideration in terms of money, would amount to taxable transaction under the Kerala Value Added Tax Act, as per Section 6(1) (a) and (c) of the said Act.

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W.P.(C) No.34068 OF 2010

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The contention of the petitioner is based on the 'Budget Speech' made on behalf of the Government for the year 2008-09, in which a promise was made to exempt the film industry from levy of Value Added Tax on transfer of the right to use copy rights, with effect from 1-4-2005. It is contented that against the terms of the 'Budget Speech' made, when the Finance-Act,2008 was introduced, no retrospective effect for the exemption was granted from 1-4-2005, as promised. On the above premise it is contented that levy of penalty alleging non payment is unsustainable, because there was a clear promise made on behalf of the government to exempt such payment.

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The learned counsel appearing for the petitioner had pointed out that in the Finance Act for the year 2011, retrospectivity for the exemption was granted with effect on and from 1-4-2005. Therefore, there is no tax liability attracted on the turn over in question and the proceedings proposed alleging non payment of tax has become unsustainable.

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I notice that, since Exts.P1 and P2 are only proposal

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W.P.(C) No.34068 OF 2010 3

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notices issued, the petitioner will be at liberty to point out unsustainability of the proposal before the authority concerned itself.

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Under the above mentioned circumstances, the writ petition is disposed of directing the petitioner to file objections against Ext.P1 and P2, within a period of 2 weeks from the date of receipt of copy of this judgment. It is left open to the petitioner to bring to the notice of the 2^nd respondent about the amendments brought in through Finance Act, 2011 and to contend that the penalty proposal is not sustainable.

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Needless to say that the second respondent will take a final decision considering such contentions after affording an opportunity of hearing to the petitioner at the earliest possible , at any rate, within a period of one month from the date of receipt of such objections.

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JUDGE

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smm

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W.P.(C) No.34068 OF 2010 4

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W.P.(C) No.34068 OF 2010 5

M/S.Central Advertising Agency and Anr. v. the State of Kerala and Others

Case brief

What is this about?

What did the court decide?

M/S.Central Advertising Agency and Anr. v. the State of Kerala and Others

Case brief

What is this about?

What did the court decide?

What the court decided

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