Remanded

Crust and Crumb Food Ingredients P Ltd. v. the Assistant Commissioner of State Tax

Kerala HC9 Apr 2019WP(C)/10952/2019

Case brief

AI extract

What is this about?

High Court Kerala set aside an assessment order under Section 25 KVAT Act, 2003 passed without a hearing. The court remitted the matter to the assessing authority to afford the petitioner an opportunity of hearing and complete the assessment.

What did the court decide?

Ext.P6 set aside; matter remitted to first respondent for hearing and completion of assessment.

Crust and Crumb Food Ingredients P Ltd. Vs the Assistant… — GST and Indirect Tax | Kerala HC (2019)

¶1

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶2

PRESENT

¶3

THE HONOURABLE MR.JUSTICE S.V.BHATTI

¶4

TUESDAY, THE 09TH DAY OF APRIL 2019 / 19TH CHAITHRA, 1941

¶5

WP(C).No. 10952 of 2019

¶6

PETITIONER/S:

¶7

M/S.CRUST AND CRUMB FOOD INGREDIENTS P LTD BLOCK NO. 32, KINFRA, NELLAD P.O, SMALL INDUSTRIES PARK, MUVATTUPUZHA, COCHIN-686 721, REPRESENTED BY IT'S DIRECTOR, MR. NOUSHAD NAINA.

¶8

BY ADV. SMT.K.LATHA

¶9

RESPONDENT/S:

¶10

1 THE ASSISTANT COMMISSIONER OF STATE TAXOFFICE OF THE ASSISTANT COMMISSIONER, STATE GOODS AND SERVICE TAX DEPARTMENT, SPECIAL CIRCLE, PERUMBAVOOR683 542

¶11

2 THE COMMISSIONER OF STATE TAXES, TAX TOWER, KILLIPALAM, KARAMANA P.O, THIRUVANANTHAPURAM-695 002.

¶12

3 THE INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, SGST DEPARTMENT, KAKKANAD, ERNAKULAM-682 030

¶13

OTHER PRESENT:

¶14

GP. SMT . M.M. JASMINE

¶15

THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09.04.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶16

W.P.(C) No.10952/2019

¶17

-2-

¶18

J U D G M E N T

¶19

The petitioner challenges Ext.P6 assessment order made

¶20

under Section 25 of the KVAT Act, 2003 (for short 'the Act'). The case of the petitioners is that the petitioner is not under obligation or has incurred any tax liability now determined by the respondent because the sales which are reflected in Ext.P6 are export sales effected by the petitioner. The export does not attract the tax liability under the Act. On 31.01.2019, the first respondent issued notice under section 25(1) of the Act. The petitioner, on 16.03.2019, submitted reply (Ext.P4) together with the supporting documents such as receipt details, bank realisation report, copies of invoices, bill of lading etc. The endeavour of petitioner is that the transactions for which the tax is demanded do not come within the purview of the Act at all.

¶21

W.P.(C) No.10952/2019

¶22

-3-

¶23

Yet another complaint of the petitioner is that the

¶24

first respondent received the reply on 16.03.2019 and Ext.P6 order was made on 21.03.2019 without affording opportunity to petitioner to substantiate its case by producing further documents, if any, and demonstrate that tax liability does not occasion. The first respondent without affording opportunity recorded a very brief finding which reads thus:

¶25

"But the assessee failed to produce the corresponding shipping bill for export issued by the Customs and corresponding BRC to prove export and the receipt of payment. In the absence of these documents the claim of exemption is not entertained.

¶26

In the circumstances explained above, the KVAT assessment in respect of the assessee for the return period 2012-13 stands completed to the best of judgment u/s 25(1) of the Act as under."

¶27

Total sales turnover conceded for the year 2011-12	Rs.29,40,44,424.00
Less interstate sales turnover assessed separately	Rs.1,60,67,880.00
Balance sales turnover for KVAT Assessment	Rs.27,79,76,544.00
Less exemptions allowed on non taxable sales	Rs.16,99,550.00

¶28

W.P.(C) No.10952/2019

¶29

-4-

¶30

Balance taxable turnover fixed assessment under KVAT Act	for Rs.27,62,76,994.00
Tax due @ 13.5% on Rs.6894319.00	Rs.9,30,733.00
Tax due @ 5% on Rs.26,91,95,774.00	Rs.1,34,59,788.00
Tax due at 1% Rs.12,771.00	Rs.128.00
Tax due @ 5% Rs.174130.00	Rs.871.00
Total tax due	Rs.1,43,91,520.00
Totalpayment includingIPT credit	Rs.12,75,361.00
Balance due	Rs.1,31,16,159.00
Interest due @ 72%	Rs.94,43,634.00
Total amount due	Rs.2,25,59.793.00

¶31

and imposed tax liability of Rs.2,25,59,793/-. It is further stated

¶32

that the first respondent, if gives opportunity to petitioner, the petitioner in continuation of the documents already placed before the first respondent will personally appear, file further documents in proof of its case viz. none of the transactions covered by Ext.P6 attracts tax liability under the Act.

¶33

The learned Government Pleader, referring to written instructions dated 08.04.2019, contends that the first respondent has given notice, received reply, considered the reply and has passed the best judgment, which is well within his

¶34

W.P.(C) No.10952/2019

¶35

-5-

¶36

jurisdiction and that the petitioner should have been more discreet and well informed while submitting the reply (Ext.P4). It is further contended that the petitioner has the remedy of statutory appeal and the petitioner gets opportunity even to file additional documents before the appellate authority. Therefore, firstly prays for dismissing the writ petition.

¶37

The finding recorded by the first respondent for making the order does not give sufficient details, much less adverting to the reply given by the petitioner. This Court is of the view that, keeping particularly the reply of the petitioner in perspective, viz, the transactions are exempt from taxability under the Act, to ensure fairness in action or to at least put the petitioner on notice or give personal hearing in this behalf, and then, taxability is decided. Thereafter if the petitioner fails to avail the opportunity or convince the first respondent, then no exception to the best judgment first respondent makes, at the

¶38

W.P.(C) No.10952/2019

¶39

-6-

¶40

first instance, be taken under Article 226 of the Constitution of India.

¶41

The case on hand is slightly different. The reasoning

¶42

of first respondent is too brief and does not synthesize with Ext.P5 reply. Therefore, Ext.P6 is set aside. Matter remitted to first respondent. The petitioner is directed to appear before the first respondent on 22.04.2019 with additional reply or documents on which the petitioner intends to support its case and when the petitioner appears, the first respondent gives opportunity of hearing as well and completes the assessment on or before 15.05.2019.

¶43

The writ petition ordered as indicated above.

Sd/-

S.V.BHATTI

JUDGE

jjj

W.P.(C) No.10952/2019

¶49

-7-

¶50

APPENDIX

¶51

PETITIONER'S/S EXHIBITS:

¶52

EXHIBIT P1 THE TRUE COPY OF THE FORM NO. 13 AND 13 A AUDIT REPORT FILED BY THE PETITIONER FOR THE YEAR 20122013. EXHIBIT P1 A THE TRUE COPY OF THE FORM NO. 10 ANNUAL RETURN FILE BY THE PETITIONER FOR THE YEAR 2012-2013 EXHIBIT P2 THE TRUE COPY OF THE LETTER DATED 12.6.2018 FILED BY THE PETITIONER BEFORE THE FIRST RESPONDENT. EXHIBIT P3 THE TRUE COPY OF THE PRE-ASSESSMENT NOTICE U/S. 25(1) OF THE KVAT FOR THE YEAR 2012-2013, DATED 31.1.2019 ISSUED BY THE FIRST RESPONDENT TO THE PETITIONER.

¶53

EXHIBIT P4 THE TRUE COPY OF THE LETTER DATED 16.3.2019 FILED BY THE PETITIONER BEFORE THE FIRST RESPONDENT. EXHIBIT P5 THE TRUE COPY OF THE BANK STATEMENT BY PIN POINTING THE DETAILS OF CORRESPONDING RECEIPTS OF THE ENTIRE EXPORT SALES OF RS. 26,23,23, 195/EXHIBIT P6 THE TRUE COPY OF THE ASSESSMENT ORDER FOR THE YEAR 2012-2013 DATED 21.3.2013 ISSUED BY THE FIRST RESPONDENT TO THE PETITIONER.

Crust and Crumb Food Ingredients P Ltd. v. the Assistant Commissioner of State Tax

Case brief

What is this about?

What did the court decide?

Crust and Crumb Food Ingredients P Ltd. v. the Assistant Commissioner of State Tax

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

K.v.Sajithkumar Vs Assistant of Commissioner and Recovery Officer

Shafeeque Vs the Joint Regional Transport Officer(Taxation Officer)

Shamsudhen.v Vs the Joint Regional Transport Officer

Thimmappa Bhat a Vs State of Kerala

Royal Trading Company Vs the State Tax Officer

Royal Trading Company Vs the State Tax Officer