Dismissed

M/S.M.M. Marketing v. Assistant Commissioner

Kerala HC2 Jun 2016WP(C)/5754/2011

Case brief

AI extract

What is this about?

The High Court of Kerala dismissed a writ petition challenging an assessment order under Section 25 of the KVAT Act. The court held that the authority served notice via registered post to the last known address and that the petitioner failed to show sufficient opportunity was denied under Section 88, thus upholding the order.

What did the court decide?

The writ petition challenging the assessment order is dismissed, and no interference is granted with the impugned order.

M/S.M.M. Marketing Vs Assistant Commissioner — GST and Indirect Tax | 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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THURSDAY, THE 2ND DAY OF JUNE 2016/12TH JYAISHTA, 1938

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WP(C).No. 5754 of 2011 (T)

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PETITIONER(S) :

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M/S.M.M.MARKETING, CC NO.50/454 D, MYTHRI NAGAR, MANIMALA CROSS ROAD, EDAPPALLY, COCHIN-682 024, REPRESENTED BY ITS MANAGING PARTNER, SRI.GEORGE LIJU.T.L.

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BY ADV. SRI.TOMSON T.EMMANUEL

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RESPONDENT(S) :

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1. ASSISTANT COMMISSIONER, SPECIAL CIRCLE-II, COMMERCIAL TAXES, ERNAKULAM, COCHIN-682 015.

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2. THE STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT (TAXES), SECRETARIATE, THIRUVANANTHAPURAM-69 5033.

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BY GOVERNMENT PLEADER SMT.LILLY.K.T

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20-05-2016, THE COURT ON 02-06-2016 DELIVERED THE FOLLOWING:

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Msd.

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WP(C).No. 5754 of 2011 (T)

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APPENDIX

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PETITIONER(S)' EXHIBITS :

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EXHIBIT P1: TRUE COPY OF THE ASSESSMENT ORDER DATED 13.11.2009 FOR THE YEAR 2006-2007 COMPLETED BY THE 1ST RESPONDENT UNDER THE KVAT ACT.

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EXHIBIT P2: TRUE COPY OF THE PROCEEDINGS DATED 13.07.2007 OF THE INTELLIGENCE OFFICER, SQUAD NO.VIII, COMMERCIAL TAXES, ERNAKULAM.

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EXHIBIT P3: TRUE COPY OF NOTICE DATED 02.11.2010, U/S.25 OF THE KVAT ACT, FOR THE YEAR 2007-2008, SERVED ON THE PETITIONER ON ON 06.12.2010.

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EXHIBIT P4: TRUE COPY OF DETAILED OBJECTION DATED 17.12.2010, AGAINST EXT.P3, WHICH WAS ACKNOWLEDGED BY THE 1ST RESPONDENT.

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EXHIBIT P4(A): TRUE COPY OF PROOF TRANSPORT DETAILS FOR THE INTERSTATE PURCHASE RETURN AMOUNTING TO RS.9,29,712/- WITH A STATEMENT.

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EXHIBIT P5: TRUE COPY OF PRE-DATED ASSESSMENT ORDER DATED 14.12.2010 U/S.25 OF THE KVAT ACT FOR THE YEAR 2007-2008, SERVED TO THE PETITIONER ON 24.01.2011, BY THE 1ST RESPONDENT.

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RESPONDENT(S)' EXHIBITS & ANNEXURES :

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ANNEXURE R1(A): A TRUE COPY OF THE POSTAL RECEIPT NO.8794 DATED 16.11.2010 OF PERUMANOOR POST OFFICE.

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ANNEXURE R1(B): A TRUE COPY OF THE COVER MENTIONED “UNSERVED”.

//TRUE COPY//

P.S.TO JUDGE.

Msd.

A.M. SHAFFIQUE, J.

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============= W.P. (C) No. 5754 of 2011

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

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Dated this, the 2^nd day of June, 2016

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J U D G M E N T

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Writ petition is filed challenging Ext.P5, an order of assessment issued under Section 25 of the KVAT Act, 2003. Petitioner also seeks for a direction to the 1^st respondent to complete assessment after considering Ext.P4 reply and Ext.P4(a) documents after affording a personal hearing to the petitioner.

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The facts involved in the writ petition would disclose that the petitioner being a partnership firm is engaged in trading of sanitary equipments. Petitioner filed monthly and annual returns under the KVAT Act from 2005-06 onwards. For the year 2006-07, 1^st respondent estimated and assessed an amount of `11,50,000/- on the ground of difference in stock inventory filed along with annual return and the revised stock inventory filed on 8/1/2008. Petitioner preferred an appeal which is pending before

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the first appellate authority. In the next year also, on the very same allegation, the officer proposed to add 25% to the conceded turnover. According to the petitioner, though he had filed a proper

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W.P(C) No.5754/2011

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reply, assessment was completed by a predated order under Section 25(1) of the KVAT Act for the year 2007-08. This, according to the petitioner, is in gross violation of the principles of natural justice. It is alleged that, on 25/6/2007, the place of business of the petitioner was inspected The case was thereafter compounded by remitting `23,000/-. Petitioner was issued with a notice dated 8/9/2010 calling upon him to produce the books of accounts for the year 2007-08. Thereafter, notice dated 2/11/2010 under Section 25 was issued for the assessment year 2007-08, which was served on the petitioner on 6/12/2010. It is submitted that, on 17/12/2010, petitioner approached the 1^st respondent and filed a detailed objection. Ext.P4 is the said objection. According to the petitioner, he had produced necessary documents along with the same. Petitioner submits that 1^st respondent completed a predated assessment order dated 14/12/2010 without even referring to the objection filed. This, according to the petitioner, was only to avoid verification of Ext.P4 reply and Ext.P4(a) documents.

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Learned counsel for the petitioner submits that in so

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W.P(C) No.5754/2011

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far as there is gross violation of principles of natural justice, it shall be open for the petitioner to challenge the assessment order bypassing the alternate remedy by filing an appeal.

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Statement is filed on behalf of the 1^st respondent wherein it is stated that, during the year 2006-07, there was clear suppression of turnover and evasion of tax was detected. It is stated that the modus operandi was also illustrated in para 3 of the counter affidavit. It is observed that it is a rare case in which the petitioner was continuously evading tax by suppressing turnover by adopting techniques of not issuing sale bills or even if the sale bills are issued, it is not for the actual value and the transactions are not accounted in the regular books of account. With respect to the impugned notice, it is submitted that at the time of verification, the assessing authority found that the inventory furnished by the petitioner before the Intelligence Officer was not the same which was submitted before the assessing authority. It is stated that the procedure for assessment for the year 2007-08 started as early as in 2009. On 9/3/2009, notice in Form No.17 was issued to produce the books of accounts

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W.P(C) No.5754/2011

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for verification on 19/3/2009. Petitioner requested for adjournment and the same was adjourned to 03/04/2009. Still, the documents were not produced. Again, Form No.17 notice was issued posting the case for verification on 23/9/2010. Petitioner did not respond. It is pursuant to the same that pre-assessment notice dated 2/11/2010 was issued which was sent by registered post on 16/11/2010. Still nobody responded, on 6/12/2010, one copy of pre assessment notice was sent by registered post and delivered to Sri.Joji G.A, the Accountant of the firm. He was informed that notice was sent by registered post to the petitioner on 16/11/2010. The Accountant promised to furnish objections within 7 days. Until 14/12/2010, nobody turned up and no objection was filed. Therefore, the assessment was completed as proposed in the notice. It is stated that after despatch of the order, petitioner turned up on 17/12/2010 after 5.00 p.m and handed over their contentions. It is stated that since the pre assessment notice was despatched on 16/11/2010, the matter was finalised on 14/12/2010 and orders were also issued. It is further submitted that the order sent by registered post was

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W.P(C) No.5754/2011

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returned by the postal authority. When steps were taken to resort to affixture at the last known address, the order was handed over on 24/1/2011. The respondent also has produced Annexure R1(a) postal receipt for sending notice dated 16/11/2010. It is submitted that thereafter the Accountant appeared on 6/12/2010 and misrepresented that the pre-assessment notice was not acknowledged by them. Therefore, taking a lenient view, one copy of pre-assessment notice, which was sent on 16/11/2010, was delivered to him. He undertook to file reply within 7 days.

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The main contention urged by the petitioner is violation of principles of natural justice. The materials placed on record clearly indicates that notice of hearing was issued on 16/11/2010 as evident from Ext.R1(a). It was sent by registered post in the last known address of the petitioner. As per Section 88, service of notice is to be sent by registered post and it should be at his last known address of residence or business. In so far as respondent authorities had complied with the same, there is no reason to interfere with the impugned order on the ground of violation of principles of natural justice. Materials placed on

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W.P(C) No.5754/2011

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record clearly indicate that sufficient opportunity had been granted to the petitioner. If he has not availed of the said opportunity, there is no reason to interfere with the same in a writ petition under Article 226 of the Constitution of India.

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Writ petition is, hence, dismissed.

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Sd/-

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A.M. SHAFFIQUE, JUDGE

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//True Copy//

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P.S to Judge

M/S.M.M. Marketing v. Assistant Commissioner

Case brief

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M/S.M.M. Marketing v. Assistant Commissioner

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