Disposed

M/S.Glaxo Smithkline Pharmaceuticals Ltd. v. the State of Kerala

Kerala HC12 Sept 2012WP(C)/6121/2012

Case brief

AI extract

What is this about?

Petitioner challenged a revised Kerala GST assessment order denying credit for earlier tax payments in a writ petition. The court held factual disputes must be resolved through statutory appeal and stayed recovery proceedings for four weeks to allow petitioner to pursue statutory remedies.

What did the court decide?

Proceedings pursuant to the revised assessment order stayed for four weeks; petitioner directed to pursue statutory remedies.

M/S.Glaxo Smithkline Pharmaceuticals Ltd. Vs the State… — GST and Indirect Tax | Kerala HC (2012)

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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 ANTONY DOMINIC

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WEDNESDAY, THE 12TH DAY OF SEPTEMBER 2012/21ST BHADRA 1934

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WP(C).No. 6121 of 2012 (M)

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PETITIONER(S):

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M/S.GLAXO SMITHKLINE PHARMACEUTICALS LTD., OPPOSITE LITTLE FLOWER CHURCH, KUNDANNOOR ERNAKULAM-682018 REPRESENTED BY ITS MANAGER MR.P.K.NARAYANA SWAMY.

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BY ADV. SMT.K.LATHA

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RESPONDENT(S):

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1. THE STATE OF KERALA REPRESENTED BY CHIEF SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM - 695 001.

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2. THE ASSISTANT COMMISSIONER, SPECIAL CIRCLE-1, ERNAKULAM-682 019.

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3. THE INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAX OFFICER, (REVENUE RECOVERY) OFFICE OF THE INSPECTING ASSISTANT COMMISSIONER, 2ND FLOOR, CIVIL STATION, ERNAKULAM, KAKKANAD, ERNAKULAM-682 030.

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4. THE MANAGER, HONKONG AND SHANGHAI BANKING COMPANY LTD., PALLIMUKKU, ERNAKULAM-682 016.

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BY ADV. GOVERNMENT PLEADER SRI SHAIJ RAJ T K

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 12-09-2012, ALONG WITH WPC. 16302/2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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LSN

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WP(C).No. 6121 of 2012 (M)

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APPENDIX

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PETITIONER(S) EXHIBITS

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EXHIBIT P1: THE TRUE COPY OF THIS MODIFIED ASSESSMENT ORDER FOR THE YEAR 99-2000 DATED 15/5/2006 ISSUED BY THE SECOND RESPONDENT TO THE PETITIONER.

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EXHIBIT P2: THE TRUE COPY OF THE RECTIFICATION PETITION DATED 31ST AUGUST 2006 FILED BY THE PETITIONER BEFORE THE SECOND RESPONDENT AGAINST THE PI MODIFIED ASSESSMENT ORDER.

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EXHIBIT P3: THE TRUE COPY OF THE LETTER ISSUED BY THE SPECIAL TAHASILDAR (RR) TO THE SECOND RESPONDENT DATED 3/8/99.

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EXHIBIT P4: THE TRUE COPY OF THE APPELLATE ORDER DATED 30/10/2008 ISSUED BY THE DEPUTY COMMISSIONER (APPEALS).

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EXHIBIT P5: THE TRUE COPY OF THE REVENUE RECOVERY NOTICE ISSUED BY THE THIRD RESPONDENT TO THE PETITIONER DATED 25/10/2006.

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EXHIBIT P5A: THE TRUE COPY OF THE COVERING LETTER DATED 9/11/2006 ALONG WITH THE COPY OF THE DD NO.190372 OF HDFC BANK DATED 7/11/2006 OF RS.4,35,100/-

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EXHIBIT P6A: THE TRUE COPY OF THE PROHIBITORY ORDER DATED 27/2/12 ISSUED BY THE THIRD RESPONDENT DEMANDING RS.1,22,97,869/- TO THE FOURTH RESPONDENT (PETITIONERS BANK).

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EXHIBIT P6B: THE TRUE COPY OF THE PROHIBITORY ORDER DATED 22/2/12 ISSUED BY THE THIRD RESPONDENT DEMANDING RS.18,22,146/- TO THE FOURTH RESPONDENT (PETITIONER'S BANK).

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EXHIBIT P7: THE TRUE COPY OF THE COVERING LETTER 6/3/2012 AND THE COPY OF THE DD NO.480021 OF HSBC BANK DATED 28TH FEBRUARY 2012 OF RS.31,42,114/-

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RESPONDENTS' EXHIBITS : NIL

//TRUE COPY//

P.A. TO JUDGE

LSN

ANTONY DOMINIC,J

W.P.(C)Nos.6121 & 16302 of 2012

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Dated this the 12^th day of September, 2012

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JUDGMENT

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Petitioner was a dealer registered under the KGST Act. Ext.P4 is an order of assessment passed against the petitioner for the year 1999-2000. In that assessment order, balance tax due from the petitioner was quantified at Rs.33,02,570/-. Petitioner filed an appeal against that order mainly contending that Rs. 15 lakhs paid on 26.03.1990 towards advance tax and Rs.15 lakhs paid, which was acknowledged as per Ext.P2 were not given credit.

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The appellate authority considered the appeal and passed Ext.P3 order. In the appellate order, after taking note of the contentions raised by the petitioner the appellate authority directed the petitioner to produce proof of payment of Rs.30 lakhs before the Assessing Authority and the Assessing Authority was directed to give credit to the payments made.

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According to the petitioner, subsequently, credit was given and for the balance amount due, Revenue Recovery

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W.P.(C).No.6121 & 16302/2012

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: 2 :

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proceedings were initiated by Ext.P5. Thereupon the balance amount was also paid and the liability was settled.

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Subsequently, in 2012 a prohibitory order was served on the petitioner's bank. It was thereupon the petitioner approached this Court and filed writ Petition No.6121 of 2012 and the prohibitory order was stayed by this Court. While so, the Assessing Officer issued revised assessment order dated 28.06.2012 for the year 1999-2000. In that assessment order, dealing with the claim of the petitioner for credit to the payment

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of Rs.30 lakhs made as above, the Assessing Officer has held thus:

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The assessee have filed an application dated 22.03.2012 enclosing a copy of the appellate order in STA 3542/06 dated 30.10.2008 and a copy of letter No.E6-2460/94 dated 30.08.1999 of the Special Tahsildar(RR) Kanayannoor. As per this letter, the payment of Rs.15,00,000/- is the payment in view of the judgment in OP.No.9310/94 dated 08.07.1994 and this payment was made on 07.08.1994, ie, 6(six) years before the assessment in question. That too, was with reference to the requisition No.23030084/90-91 dated 12.06.1994 sent from this office. The above facts are clearly

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W.P.(C).No.6121 & 16302/2012

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: 3 :

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noted in the Tahsildar's letter of self, copy of which as enclosed by the dealer. The above payment is against the demands arose for the year 1990-91 and against the RR issued on 12.06.1994 from this office. No credit will be afforded to the above payment for the year 1999-2000.

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Regarding the other claim of Rs.15,00,000/stated to have remitted by the assessee as advance tax on 26.03.1990, it relates to 1989-90, ie. 10 years before the assessment in question. No proof was filed by the assessee for the above claim of payment. Further this advance payment, made on 26.03.1990, as claimed by the assessee is against the demand arose or the year 1989-90 and not related to the year of assessment in question. So no credit will be afforded to the above payment also for the year 1999-2000.

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Thereafter, the Assessing Officer concluded thus:

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The appellate authority's specific direction is that the dealer shall produce the evidences before the assessing authority within the time limit allowed, i.e.15 days of receipt of the appellate order. The proof to be produced is that the above payments were eligible for crediting to the year 1999-2000. In the above referred objections, affidavit and indemnity bond, the dealer submitted that they have actually made the payment during different years, i.e. 1989-90 and 1990-91. The

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W.P.(C).No.6121 & 16302/2012

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above payments are in discharge of the demands arose for the above years. The assessee have miserably failed to produce the proof as directed by the appellate authority.

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On this basis, the liability of the petitioner to pay the balance tax and interest was quantified. Producing this assessment order as Ext.P7 and challenging the same, W.P.(c) No.16302/2012 is filed.

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The case of the petitioner is that an amount of Rs.15 lakhs was paid on 03.08.1999, which was acknowledged by the Tahsildar as per Ext.P2 receipt. It is also their case that a further sum of Rs.15 lakhs was paid towards advance tax for the year 1989-1990 on 26.03.1990. It is contended that this amount has not been given credit and that credit has been wrongly denied in Ext.P7 assessment order. According to them, if these payments are given credit, they will have no liability to pay any more amount and if so, the whole demand pursuant to Ext.P7, is unsustainable.

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Learned Government Pleader referred to the conclusions

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in Ext.P7 assessment order and contended that in the light of

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W.P.(C).No.6121 & 16302/2012

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: 5 :

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these findings, there is no merit in the argument raised.

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9.l The fate of these litigations will depend upon the correctness of the conclusions in Ext.P7 revised assessment order referred to above. Reading of the assessment order shows that the credit claimed by the petitioner was declined on the basis of the conclusion that Rs.15 lakhs paid by the petitioner as per Ext.P2 was paid against demand, which arose for the year 1991 and the advance tax was paid against the demand, which arose for the year 1989-1990. If these factual findings are upheld, the claim of the petitioner will have to be rejected. On the other hand, if these factual findings are erroneous, the petitioner is entitled to succeed. This factual adjudication requiring examination of evidence to be adduced by the petitioner can be undertaken only in a regular appeal before the appellate authority. Therefore, it is for the petitioner to challenge Ext.P7, the revised assessment order in a statutory appeal.

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However, fact remains that this Court has entertained with these writ petitions and also granted an interim order

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W.P.(C).No.6121 & 16302/2012

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staying recovery pursuant to the prohibitory order as also the assessment order, which order is still remaining in force.

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Taking notice of this, I direct that further proceedings pursuant to Ext.P7 assessment order, will be kept in abeyance for a period of four weeks from today and in the meanwhile, it is up to the petitioner to pursue the statutory remedies that are available available against the assessment order.

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Writ Petitions are disposed of as above.

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ANTONY DOMINIC, JUDGE

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M/S.Glaxo Smithkline Pharmaceuticals Ltd. v. the State of Kerala

Case brief

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M/S.Glaxo Smithkline Pharmaceuticals Ltd. v. the State of Kerala

Case brief

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