The State of Kerala v. v.Krishnakumar

Kerala HC10 Aug 2022OT.Rev/11/2021

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HIGH COURT OF KERALA AT ERNAKULAM PRESENT…

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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 S.V.BHATTI

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THE HONOURABLE MR.JUSTICE BASANT BALAJI

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WEDNESDAY, THE 10TH DAY OF AUGUST 2022 / 19TH SRAVANA, 1944

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OTHER TAX REVISION CASE NO.11 OF 2021

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(AGAINST THE ORDER DATED 22.05.2020 IN T.A.(VAT)No.284/2016 OF
KERALA VALUE ADDED TAX APPELLATE TRIBUNAl, ADDITIONAL BENCH,
ERNAKULAM)

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REVISION PETITIONER/RESPONDENT/REVENUE:

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THE STATE OF KERALA,

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REPRESENTED BY THE JOINT COMMISSIONER OF STATE TAX
(LAW) DEPARTMENT OF KERALA STATE GOODS AND SERVICE
TAX, ERNAKULAM.

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The State of Kerala Vs v.Krishnakumar — Income Tax | Kerala HC (2022)

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The revenue has filed this tax revision against
the order of the Kerala Value Added Tax Appellate
Tribunal, Additional Bench, Ernakulam as TA(VAT)No.284
of 2016. The respondent is an unregistered dealer. On
30.12.2013, the Intelligence Officer, Squad No.1,
Ernakulam, inspected the business premises of the
respondent and prepared SIR No.224317 dated
30.12.2013. On verification of the books brought into
light that there are irregularities and the dealer has
effected unaccounted sales of perfumery compounds for
Rs.79,11,771/- during 2013-14. He compounded the

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The assessment was completed and proceedings were
issued on 30.07.2015 by the Commercial Tax Officer,
Aluva. The respondent challenged the proceedings of
the Commercial Tax Officer before the Deputy
Commissioner (Appeals) I, Commercial Taxes, Ernakulam,
as First Appeal No.KVATA No.1753 of 2015. The First
Appellate Authority dismissed the appeal, holding that

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filed an appeal before the Kerala Value Added Tax
Appellate Tribunal, Additional Bench, Ernakulam, and
the same was numbered as TA (VAT) No.284 of 2016. The
Tribunal on assessment of the case put forward by the
respondent allowed the appeal in part and reduced the
rate of tax from 14.5% to 5%. Aggrieved by this order
of the Tribunal, the revenue is in appeal.

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1. Whether on the facts and circumstances of the
case, the Appellate Tribunal has erred in law
directing the assessing authority to modify the
Annexure A assessment order by reducing the further
addition to 50% of suppressed turnover particularly
considering the fact that the respondent has no
registration at all which is against the provisions
of KVAT Act and Rules?

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3. Whether Tribunal erred in law in considering
section 94 clarification order issued by the
Commissioner Order No.C3.26401/2008 dated
17.10.2008 which is not at all applicable to the
present case?

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50% of the suppressed turnover by the Tribunal.
Learned Senior Government Pleader also contended that
the dealer effected the unaccounted sale of perfumery
compounds for Rs.79,11,771/- during 2013-14 and he has

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of the KVAT Act, 2003 were issued to the dealer
proposing additional two times of the probable
omission suppression with sales turnover detected by
the intelligence wing. The Intelligence Officer has
rightly ordered two times the probable omission and
suppression. Moreover, the rate of tax applicable is
14.5% as the commodity is clearly stated in the
schedule of the rates of commodities shown on the
website of the Government of Kerala, Commercial Taxes.

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justified in reducing the addition of two times
suppressed turnover as excessive and arbitrary and
limited the same to 50%. Moreover, the Tribunal relied
on the clarification issued by the Commissioner under

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inspected by the Intelligence Officer and found that
there are unaccounted sales of perfumery compounds
during the year 2013-14, totalling Rs.79,11,771/- and
that the assessee has not taken registration under the

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proceedings under Section 25 were invoked and the
assessing officer had taken the rate of tax as 14.5%
for the reason that the website of the Government of
Kerala, Taxes Department shows that for perfumery
compounds containing spirits, the rate of tax should
be 14.5%. We are of the view that the said finding was
interdicted by the Tribunal and held that the
intelligence officer ought to have taken note of the
clarification issued by the Commissioner under Section
94 of the Act, which prescribes that for synthetic
perfume compounds, the entry is Sl. No.91 A of List A
and the tax has to be at the rate of 4%. The Tribunal
also found on facts that the addition of two times
suppressed turnover is excessive and arbitrary.

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On going through the order of the Tribunal, we
find that the Tribunal was justified in reducing the
addition of two times suppressed turnover to 50%
suppressed turnover and that the rate applicable is

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intelligence officer had found that the rate of tax
applicable is 5%. Therefore, we find no reason to
interfere with the order of the Tribunal and the
substantial questions of law raised are found against
the revenue, hence the O.T.Revision is dismissed.

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ANNEXURE ATRUE COPY OF THE ASSESSMENT ORDER DATED
30.7.2015 FOR THE ASSESSMENT YEAR 2013-14.
ANNEXURE BTRUE COPY OF THE 1ST APPELLATE ORDER DATED
22.7.2016 PASSED BY THE DEPUTY COMMISSIONER
(APPEALS) I, COMMERCIAL TAXES, ERNAKULAM IN
KVAT NO.1753/2015.
ANNEXURE CCERTIFIED COPY OF THE ORDER PASSED BY THE
APPELLATE TRIBUNAL IN TA(VAT) NO.284/2016
DATED 22.5.2020.

The State of Kerala v. v.Krishnakumar

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Case brief

What is this about?

A compact analysis

Parties & counsel

Coram

Case details

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