Dismissed

K.Ramabhadran v. State of Kerala

Kerala HC26 Oct 2016WP(C)/24191/2015

Case brief

AI extract

What is this about?

This judgment dismisses a writ petition challenging a tax assessment under Section 25 of the KVAT Act, 2003. The court held that the dispute over stock valuation between audit findings and Form 53 entries required adjudication by a proper appellate authority under Section 55, precluding writ jurisdiction.

What did the court decide?

Petitioners permitted to prefer appeal within 30 days from receipt of judgment; writ petition otherwise dismissed.

K.Ramabhadran Vs State of Kerala — Writ and Judicial Review | 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 A.M.SHAFFIQUE

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WEDNESDAY, THE 26TH DAY OF OCTOBER 2016/4TH KARTHIKA, 1938

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WP(C).No. 24191 of 2015 (Y)

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PETITIONER(S):

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1. K.RAMABHADRAN,

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NO.14, PALM GREEN VILLA, 999 M13, PONNURUNNY, VYTTILA P.O., KOCHI- 682 019.

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2. PAUL SEBASTIAN F.C.A., MEMBER SHIP NO: 37057, CHARTERED ACCOUNTANT, 32/1964, NEW KADAVATH ROAD, PALARIVATTAM, COCHIN - 682 025.

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BY ADV. SRI.JOLLY JOHN

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RESPONDENT(S):

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1. STATE OF KERALA, REPRESENTED BY ITS SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM- 695 001.

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2. COMMERCIAL TAX OFFICER, 2ND CIRCLE THRIPPUNITHURA, MINI CIVIL STATION, OLD BUS STAND, SH 15, THRIPPUNITHURA, ERNAKULAM, KERALA- 682 301.

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BY GOVERNMENT PLEADER SRI.V.K.SHAMSUDHEEN

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 26-10-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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msv/

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WP(C).No. 24191 of 2015 (Y)

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APPENDIX

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PETITIONER(S)' EXHIBITS

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EXHIBIT P1: A TRUE DATED 1ST PE LIMITE	COPY OF THE FINAL SALE AGREEMENT 01/08/2011 ENTERED INTO BETWEEN THE TITIONER AND TECIL CHEMICALS AND HYDRO POWER D, CHINGAVANAM, KOTTAYAM.
EXHIBIT P2: A TRUE KERALA	COPY OF THE JUDGMENT OF HON'BLE HIGH COURT OF DATED 1ST JULY 2011 IN WP(C) 15964/2011.
EXHIBIT P3: A TRUE BY THE KERALA	COPY OF THE INTERIM ORDER DATED 17TH JULY 2012 HON'BLE DIVISION BENCH OF HIGH COURT OF , IN CON. CASE NO: 45 OF 2012.
EXHIBIT P4: A TRUE BY THE ACT.	COPY OF THE NOTICE DATED 2ND MAY 2014 ISSUED 2ND RESPONDENT UNDER SECTION 25(1) OF KVAT
EXHIBIT P5: A TRUE APPLIC REVISE	COPY OF THE REVISED AUDIT REPORT AND THE ATION OF THE 2ND PETITIONER TO ACCEPT THE D AUDIT REPORT.
EXHIBIT P6: A TRUE 1ST PE	COPY OF THE REPLY DATED 6.6.2015 FILED BY THE TITIONER BEFORE THE 2ND RESPONDENT.
EXHIBIT P7: A TRUE OF HON WP(C)	COPY OF THE COVERING LETTER AND THE JUDGMENT 'BLE HIGH COURT OF KERALA IN JUDGMENT IN 560/2010.
EXHIBIT P8: A TRUE RECEIV NOTICE AMOUNT 2ND RE	COPY OF THE ORDER DATED 2ND JULY 2015, ED BY THE 1ST PETITIONER ON 9TH JULY 2015 AND OF DEMAND NO: 17/15-16 DATED 02.07.2015 FOR AN OF RUPEES 54,71,580.00 ISSUED BY THE SPONDENT AGAINST THE PETITIONER.

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RESPONDENT(S)' EXHIBITS

NIL

//TRUE COPY//

P.S.TO JUDGE

Msv/

A.M. SHAFFIQUE, J.

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=============== W.P. (C) No. 24191 of 2015

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==================

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Dated this, the 26^th day of October, 2016

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J U D G M E N T

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Petitioners challenge Ext.P8 by which assessment has been made under Section 25 of the KVAT Act, 2003.

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The main contention urged by the petitioners is that the assessing authority did not take into consideration the revised audit statement in Form No.13/13A. According to the petitioners, the facts disclosed in the writ petition would disclose that the 1^st petitioner purchased certain plant and machineries as scrap in the year 2010 from TECIL Chemicals and Hydro Power Limited, Chingavanam, Kottayam. It is stated that the 1^st petitioner was unable to enter into the factory premises to assess the quality, quantity and the nature of the material that he purchased. He paid the entire purchase price of `16.89 crores in 2011. The actual price could be assessed only at the time of sale. 1^st petitioner could sell the materials for a total sale consideration of 7.93 crores and 1.53 crores in 2013-14 and 2014-15 financial years. It is submitted that the 2^nd petitioner, who is a Chartered Accountant was the sales consultant of the first petitioner.

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W.P(C) No.24191/15

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-:2:-

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At the time of initiating the audit statement in Form 13A in 2013, dismantling was going on. The second petitioner did not have the correct figure regarding the closing stock since dismantling was not over at that time. He made a wrong approximation and entered a wrong stock as 8,18,00,000/- by merely subtracting the sale amount till then from the purchase price. It is further submitted that while uploading Form No.53, petitioners had stated the stock figure at 98,00,000/- without knowing that the auditor had by mistake uploaded the already initiated Form 13A showing wrong stock value of 8,18,00,000/- instead of stock of 98,00,000/- as per Form No.53. This fact, according to the petitioners, have not been properly considered by the authorities concerned.

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Reference to Ext.P8 would show that the assessing officer had considered the objection raised by the petitioners and had observed that the assessee filed return in Form No.10 conceding total sales turnover to the tune of 7,98,52,090/which consists of taxable local sales of 5,73,17,265/- and total taxable interstate sales of 2,25,34,825/-. Reference is also made to the audit statement in the closing stock of 8,18,00,000/-

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W.P(C) No.24191/15

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-:3:-

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whereas it is clearly indicated that the closing stock as per Form No.53 uploaded is 98,00,000/-. It is taking into account these figures as reflected in the uploaded statement as well as in Form No.53 that the assessment has been made by the authority. It is further observed that “in the instant case audit confirms that the purchase values in the return filed and books of accounts are the same. The actual closing stock conceded in form No.53 is 98,00,000/-. But the audit finding is `8,18,00,000/- Stock value increased means that there is sales suppression in the returns filed. The assessee had an opportunity to concede the sales suppressed by revising the returns and remitting tax thereon. The assessee did not cared to revise the return in form No.10. Instead when the best judgment proposal received the assessee takes the contention that the audit finding is incorrect.”

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It is taking into account the difference in Form 53 as well as the audit report that the assessing authority had come to a definite finding. Learned counsel for the petitioners submits that the actual figure is what is available in Form No.53. The assessing officer apparently has considered both the figures and had arrived at a conclusion. Whether the actual figures are as

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W.P(C) No.24191/15

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-:4:-

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reflected in Form No.53 or in the audit statement are all questions of fact which requires an adjudication. I do not think that this Court will be justified in interfering with the said order bypassing the alternate remedy available under Section 55 of the KVAT Act, 2003. The contention urged by the petitioners is that Ext.P5 was not considered. Ext.P5 apparently had been issued after the notice had been issued under Section 25(1) of the KVAT Act. That apart, it is also evident that the assessing officer had considered Ext.P5, but formed an opinion that the assessee had an opportunity to concede the sale suppression by revising the returns and remitting the tax thereafter.

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Under such circumstances, I do not find any illegality warranting interference by this Court at this stage of the proceedings. If at all any prejudice had been caused to the petitioners, it is for the appellate authority in a properly constituted appeal to consider the same in accordance with the procedure prescribed.

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Hence reserving the right of the petitioners to prefer appeal, this writ petition is dismissed. Since the matter was pending before this Court for quite some time, it will be appropriate to

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W.P(C) No.24191/15

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-:5:-

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permit the petitioners to prefer appeal within a period of 30 days from the date of receipt of a copy of this judgment. If the appeal is filed within the aforesaid period, the same shall be entertained and the matter shall be disposed of in accordance with law.

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Sd/-

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A.M. SHAFFIQUE, JUDGE

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Rp26/10/2016

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//True Copy//

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P.S to Judge

K.Ramabhadran v. State of Kerala

Case brief

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K.Ramabhadran v. State of Kerala

Case brief

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