Quashed

M/S.Dlf Projects Ltd., v. State Tax Officer (Investigation Branch)

Kerala HC17 Oct 2019WP(C)/9379/2019

Case brief

AI extract

What is this about?

The High Court held that the penalty order was improper as it confirmed the penalty on a ground (non-production of Form 20G) different from the one proposed in the initial notice (non-production of Form 20C). The Court quashed the order and remanded the matter to the authority to pass fresh orders after noting the assessing authority's acceptance of the TDS claim.

What did the court decide?

The impugned penalty order (Ext.P4) is quashed. The matter is remanded to the 1st Respondent to pass fresh orders after hearing the petitioner and taking note of the assessment order findings.

M/S.Dlf Projects Ltd., Vs State Tax Officer… — GST and Indirect Tax | Kerala HC (2019)

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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.K.JAYASANKARAN NAMBIAR

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THURSDAY, THE 17TH DAY OF OCTOBER 2019 / 25TH ASWINA, 1941

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WP(C).No.9379 OF 2019(V)

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PETITIONER:

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M/S.DLF PROJECTS LTD.,

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BUILDING NO.29/288, STERLING APARTMENTS, JANATHA ROAD, VYTTILA, COCHIN, REPRESENTED BY ITS ASSISTANT GENERAL MANAGER MR.SUBRAMANIAN S.

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BY ADV. SMT.K.LATHA

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RESPONDENTS:

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1 STATE TAX OFFICER (INVESTIGATION BRANCH), STATE GOODS AND SERVICE TAXES, DEPARTMENT, ERNAKULAM AT EDAPPALLY - 682 024.

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2 THE ASSISTANT COMMISSIONER (WC AND LT), O/O THE DEPUTY COMMISSIONER, COMMERCIAL TAXES DEPT., CLASS TOWER, 2ND FLOOR, OLD RAILWAY STATION ROAD, ERNAKULAM - 682 018.

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3 THE INSPECTING ASST.COMMISSIONER, COMMERCIAL TAXES, KAKKANAD, ERNAKULAM - 682 030.

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R1-3 BY GOVT.PLEADER SMT.THUSHARA JAMES

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 17.10.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

W.P(C) No.9379/19

JUDGMENT

The petitioner, which is a company registered under the Indian Companies Act and an assessee on the files of the 2^nd respondent under the KVAT Act, has approached this Court aggrieved by Ext.P4 penalty order passed against it by the 1^st respondent. The grievance of the petitioner is essentially that while passing Ext.P4 penalty order, the 1^st respondent proceeded to disallow the claim of the petitioner towards TDS in an amount of Rs.28,08,000/- on a ground that was not indicated in the notice proposing penalty. It is stated that while the petitioner had in reply to the notice proposing penalty produced the relevant Form 20F issued to it by the awarder to the contract, evidencing deduction of tax at source by the awarder, the proposal in the penalty notice was for disallowing the claim for TDS on the ground that the certificates in Form 20C had not been furnished by the petitioner to support his claim for TDS. Various other discrepancies are also pointed out with regard to computation of the tax for the purpose of penalty in Ext.P4 order.

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Through a counter affidavit filed on behalf of the respondents, it is stated that where an awarder deducts tax under Section 10, he is expected to issue a certificate to the contractor in Form 20F and the contractor has to issue a certificate in Form 20G to the awarder. The petitioner, it is stated, failed to furnish a copy of Form 20G certificate to show the payment and details before the 1^st respondent and it was under those circumstances that the claim for TDS was disallowed by the 1^st respondent. The other grounds on which the penalty was imposed on the petitioner are also sought to be justified for the reasons stated in the impugned order.

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I have heard the learned counsel for the petitioner and the

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W.P(C) No.9379/19

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learned Government Pleader appearing for the respondents.

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On a consideration of the facts and circumstances of the case and the submissions made across the Bar, I find that the initial proposal in the notice issued to the petitioner was to deny the claim for TDS on the ground that the petitioner had not produced the certificate in Form 20C to support its claim for TDS. It is relevant to note that the petitioner had furnished the necessary certificates in Form 20F, which it received from the awarder of the contract, and as per the statutory provisions, this was the only certificate that would be available with the petitioner, in his capacity as a contractor, to indicate the payment of tax at source by the awarder. The Form 20C certificate is one that has to be issued by the awarder of the contract and it is to be filed with the department. The petitioner could not be expected to have copies of the certificate that was to be generated by the awarder. At any rate, the 1^st respondent did not confirm the penalty on the petitioner for the non-production of Form 20C, but chose to confirm the penalty proposal on the ground that the petitioner had not produced the Form 20G certificate, which it was expected to issue in terms of Rule 42(4) of the KVAT Rules. In my view, this is a case where the 1^st respondent traversed beyond the notice proposing penalty and confirmed the penalty against the petitioner on a ground different from what was proposed. That apart, I also note that the claim as regards TDS has been accepted by the assessing authority in the assessment of the petitioner for the assessment year 2012-13.

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Under such circumstances, I am of the view that the 1^st respondent ought to pass fresh orders in lieu of Ext.P4, after taking note of the findings of the assessing authority in the assessment order passed in relation to the petitioner for the assessment year 2012-13. I, therefore,

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W.P(C) No.9379/19

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quash Ext.P4 order and remand the matter to the 1^st respondent for passing fresh orders in lieu of Ext.P4, after hearing the petitioner. To enable the 1^st respondent to do so, I direct the petitioner to appear before the 1^st respondent at his office at 11 A.M. on 04.11.2019. The 1^st respondent shall pass fresh orders as directed, within a month thereafter.

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Sd/- JUDGE

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A.K.JAYASANKARAN NAMBIAR

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okb

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//True copy// P.S. to Judge

W.P(C) No.9379/19

APPENDIX

PETITIONER'S EXHIBITS:

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EXHIBIT P1	THE TRUE COPY OF THE SUMMONS IN FORM NO.22 DATED 5TH JANUARY 2016 ISSUED BY THE FIRST RESPONDENT TO THE PETITIONER.
EXHIBIT P1 A	THE TRUE COPY OF THE REPLY DATED 4TH MARCH 2016 FILED THE PETITIONER AGAINST THIS P1 SUMMONS.
EXHIBIT P1 B	THE TRUE COPY OF THE SUMMONS DATED 24/10/2018, ISSUED BY THE FIRST RESPONDENT TO THE PETITIONER.
EXHIBIT P1 C	THE TRUE COPY OF THE REPLY DATED 15TH NOVEMBER 2018 FILED BY THE PETITIONER BEFORE THE FIRST RESPONDENT.
EXHIBIT P2	THE TRUE COPY OF THE PENALTY NOTICE U/S.67(1) OF THE KVAT DATED 25/01/2019 ISSUED BY THE FIRST RESPONDENT TO THE PETITIONER.
EXHIBIT P3	THE TRUE COPY OF THE REPLY AGAINST P2 PENALTY NOTICE FILED BY THE PETITIONER DATED 13TH FEBRUARY 2019 ALONG WITH CORRESPONDING ANNEXURE A AND ANNEXURE B.
EXHIBIT P3 A	THE TRUE COPY OF THE NOTICE DATED 13/2/2019 ISSUED BY THE FIRST RESPONDENT TO THE PETITIONER.
EXHIBIT P3 B	THE TRUE COPY OF THE REPLY DATED 19/2/2019 ALONG WITH CORRESPONDING DEBIT NOTE ISSUED BY M/S.SHAPOORJI PALLONJI AND COMPANY LTD. AS DEMANDED BY THE FIRST RESPONDENT IN THE P2 NOTICE.
EXHIBIT P4	THE TRUE COPY OF THE PENALTY ORDER NO.IBE- I/IR-126/2015-16 (12-13) DATED 20/2/2019.
EXHIBIT P5	THE TRUE COPY OF THE STATEMENT OF TURNOVER AS SHOWN IN AUDIT REPORT OF THE PETITIONER FOR THE YEAR 2012-2013 WHICH CONTAINS THE DETAILS OF TAX PAID AGAINST SUCH TURNOVER.

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W.P(C) No.9379/19

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EXHIBIT P6 PRE ASSESSMENT NOTICE FOR THE YEAR 20122013, TRUE COPY OF WHICH DATED 27/02/2019.

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EXHIBIT P7 TRUE COPY OF THE ASSESSMENT ORDER NO.32072053803/2012-13 DATED 29.3.2019 ISSUED BY THE SECOND RESPONDENT TO THE PETITIONER.

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EXHIBIT P8 TRUE COPY OF REVENUE RECOVERY NOTICE DATED 21.3.2019

M/S.Dlf Projects Ltd., v. State Tax Officer (Investigation Branch)

Case brief

What is this about?

What did the court decide?

M/S.Dlf Projects Ltd., v. State Tax Officer (Investigation Branch)

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

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