Dismissed

Paul K.J v. State of Kerala

Kerala HC3 Jun 2016OT.Rev/88/2016

Case brief

AI extract

What is this about?

The High Court of Kerala dismissed a tax revision challenging the levy of interest under section 31(6) of the Kerala VAT Act. The court held that despite an error in the Assessing Officer's order specifying a 3% tax rate, the state was entitled to realize interest because the legally prescribed rate was 4% and tax was not fully paid.

What did the court decide?

Revisions filed challenging the levy of interest under section 31(6) were dismissed; interest liability stands upheld.

Paul K.J Vs State of Kerala — Banking and Recovery | Kerala HC (2016)

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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 & THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU

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FRIDAY, THE 3RD DAY OF JUNE 2016/13TH JYAISHTA, 1938H

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OT.Rev.No. 88 of 2016 ()

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AGAINST THE ORDER/JUDGMENT IN TAVAT 74/2014 of KERALA VAT APPELLATE TRIBUNAL, ERNAKULAM DATED 22.1.2016

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REVISION PETITIONER(S)/APPELLANT/APPELLANT/ASSESSEE:-:

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PAUL K.J., KUREEKAL HOUSE, UNIVERSITY P.O., KOCHI - 682 033.

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BY ADVS.SMT.S.K.DEVI SRI.M.RAJ MOHAN

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RESPONDENT(S)/RESPONDENT/RESPONDENT/REVENUE:-:

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STATE OF KERALA, REPRESENTED BY ITS FINANCE SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM - 695 001.

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R BY SR GOVT PLEADER SRI.SOBHA ANNAMMA EAPEN

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THIS OTHER TAX REVISION (VAT) HAVING COME UP FOR ADMISSION ON 03-06-2016, ALONG WITH OTRV.89/16, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

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APPENDIX IN OTRV.88/16

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PETITIONERS' EXHIBITS:

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ANNEXURE I: TRUE COPY OF PERMISSION ORDER IN FORM NO.4D

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ANNEXURE II: TRUE COPY OF THE ASSESSMENT ORDER NO.32072035814/2010-2011 DATED 30.6.2012.

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ANNEXURE II: TRUE COPY OF THE COMMON ORDER NO.KVATA 2667/2012, KVATA 2666/2012 & KVATA 2665/2012 DATED 6.11.2013 OF THE FIRST APPELLATE AUTHORITY.

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ANNEXURE IV: TRUE COPY OF THE COMMON ORDER BY THE 2ND APPELLATE AUTHORITY, THE TRIBUNAL TA VAT NOS.73/014, 74/2014 AND 75/2014 DATED 22.1.2016.

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/TRUE COPY/

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PS TO JUDGE

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ANTONY DOMINIC & DAMA SESHADRI NAIDU, JJ.

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----------------------------------O.T.Rev.Nos.88 & 89 of 2016 ----------------------------------Dated this the 3^rd day of June, 2016

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O R D E R

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Antony Dominic, J.

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These revisions are filed challenging the orders passed by the authorities under the Kerala Value Added Tax Act, including the Tribunal, upholding levy of interest under section 31(6) of the Act. The assessee is a works contractor. He had opted for compounding which was allowed as per Annexure 1 order in these revision petitions. This order shows that though the awarder of the work was the Superintending Engineer, National Highway Central Circle, Kochi, the rate of tax under section 8(a)(i) was specified as 3%. Though the assessee had paid tax at the above rate of 3%, finding out that the applicable rate of interest was 4%, assessments under section 25 was completed and differential tax as also interest under section 31(6) were levied.

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2.Though the assessee did not challenge the tax that was levied and paid it, he pursued the matter before the first appellate authority disputing the liability for payment of interest. However, the payment was

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OTRV.88/16 & 89/16

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confirmed which order was again upheld by the Sales Tax Appellate Tribunal. It is in these

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circumstances, the orders are challenged before us.

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3.We heard learned counsel for the petitioner and learned Government Pleader appearing for the respondent.

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4.The contention raised by the counsel for the assessee is that he is not a defaulter and having paid the tax as provided in Annexure I order permitting compounding, he cannot be fastened with the liability for payment of interest under section 31(6). It is argued that the assessee cannot be penalised for an error committed by the Assessing Officer in Annexure I order under section 8(a)(i).

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5.Having considered the submissions made, we are inclined to think that though, by an error, the Assessing Officer had indicated levy of tax in Annexure I order as 3%, the statutorily prescribed rate of tax was 4%. The assessee had paid tax only at the rate of 3% and therefore, the Assessing

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OTRV.88/16 & 89/16

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Officer was entitled to realise the differential tax, which he has done as per Annexure II order. This liability was not disputed and the assessee has discharged the liability also. However, in so far as payment of interest is concerned, section 31(6) entitles the Revenue to realise interest on any tax that was not paid. In so far as this case is concerned, even in spite of the error committed in Annexure I order issued under section 8(a)(i), since the tax due was admittedly at 4% and since tax was not paid at the prescribed rate, for the belated payment made, the State was entitled to realise interest under section 31(6). This, precisely, is what has been directed in Annexure II order which was confirmed by the statutory authorities concurrently. We do not find any reason to disagree with the said view.

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Revisions fail and are accordingly dismissed.

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Sd/ANTONY DOMINIC, Judge.

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Sd/DAMA SESHADRI NAIDU, Judge. kkb.

Paul K.J v. State of Kerala

Case brief

What is this about?

What did the court decide?

Paul K.J v. State of Kerala

Case brief

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What did the court decide?

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