Dismissed

State of Kerala v. Sri.N.P.Ashraf, Proprietor, M/S.Wel-Tech Engineering Company

Kerala HC30 Nov 2022OT.Rev/139/2017

Case brief

AI extract

What is this about?

The Kerala High Court dismissed a tax revision petition challenging a Tribunal order that set aside a penalty under Section 70B of the KVAT Act, holding that the Court cannot interfere on questions of fact and that no question of law arose preventing interference.

What did the court decide?

The order of the Commercial Tax Additional Appellate Tribunal allowing the appeal and setting aside the penalty was upheld.

State of Kerala Vs Sri.N.P.Ashraf, Proprietor… — Banking and Recovery | Kerala HC (2022)

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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 30^TH DAY OF NOVEMBER 2022 / 9TH AGRAHAYANA,

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1944

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OT.REV NO. 139 OF 2017

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REVISION PETITIONER/S:

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STATE OF KERALA REPRESENTED BY THE DEPUTY COMMISSIONER (LAW), COMMERCIAL TAXES, ERNAKULAM.

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RESPONDENT/S:

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SRI.N.P.ASHRAF, PROPRIETOR, M/S.WEL-TECH ENGINEERING COMPANY CHERUVANNUR, FEROKE- 673 631.

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BY ADVS. SRI.PREMJIT NAGENDRAN SRI.P.RAGHUNATH

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OTHER PRESENT:

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GP M.M. JASMIN

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THIS OTHER TAX REVISION (VAT) HAVING COME UP FOR ADMISSION ON 30.11.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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OT.REV NO. 139 OF 2017

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S.V.BHATTI & BASANT BALAJI, JJ.

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- - - - -- - - -- - - - - - - - - - -- - - - - - - - - O.T.REV NO.139 OF 2017

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ORDER

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(Dated this the 30^th November 2022)

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Basant Balaji J.,

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The state has filed this revision against the order in TA (VAT) No.194 of 2016 of the Kerala Value Added Tax Additional Appellate Tribunal, Palakkad. The respondent is a registered dealer. He purchased an electronic weigh bridge from Bangalore as per invoice dated 31.3.2009. On 31.5.2009 the consignment was detained at Commercial

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Tax Check Post, Muthanga and later it was released on the strength of the certificate issued from the Village Officer,

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Cheruvannur. On enquiry by the Intelligence team, it was

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found that the respondent had shown the Tin number in the

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OT.REV NO. 139 OF 2017

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invoice related to M/s.Wel-Tech Engineering Company,

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Cheruvannur whereas the address in the invoice was Wel

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-Tech Weight Bridge, Cheruvannur. The consignee has availed concessional rate of tax at 2% CST. On enquiry, it was revealed that the goods brought from outside Kerala was declaring it as own use but it was actually used for commercial use.

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The respondent has produced Form 16 declaring that the goods are for own use. The Intelligence Officer imposed penalty on the respondent under Section 70B of the Kerala Value Added Tax Act (for short 'the KVAT Act'). The respondent filed appeal before the first appellate authority which was dismissed. A second appeal was filed before the Tribunal. The Tribunal, by the impugned order, allowed the appeal and the penalty order was set aside.

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OT.REV NO. 139 OF 2017

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Aggrieved by the order of the Tribunal, this revision is filed by the State.

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The main contention raised by the Government Pleader is that Section 70B of the KVAT Act was introduced in the Act to ensure that goods brought into the State for own use are not subsequently resold which would result in loss of revenue. The TIN number shown in the invoice relates to M/s.Wel-Tech Engineering Company Cheruvannur, whereas the address in the invoice relate to Wel- Tech Weigh Bridge, Cheruvannur. Concessional rate of tax was remitted treating the goods as one brought for own use. On enquiry it was revealed that the goods brought from outside declaring it as for own use was actually used for commercial use. Noting the said discrepancy, Section 70B of the KVAT Act was invoked

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OT.REV NO. 139 OF 2017

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imposing penalty. The first appellate authority rightly

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dismissed the appeal finding on facts that the machine was brought for commercial use and not for personal use. But the Tribunal without understanding the scope of Section 70B of KVAT Act, allowed the appeal filed by the respondent. Hence, the order is bad in law and against the spirit of 70B of the KVAT Act.

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This revision is filed under Section 63 of the

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KVAT Act . The power of revision is to determine the question of law raised.

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The questions of law raised in this revision are as follows:

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“1. Whether the impugned order is in accordance with law?

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Whether the finding of the Tribunal that the Section 70B of the Case. K.V.A.T. Act is not applicable in the case is

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OT.REV NO. 139 OF 2017

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sustainable and is in A accordance with law?

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Whether the respondent is entitled to produce Form 16 for the import of the Weigh Bridge?

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Whether a registered dealer is entitled to use Form 16 for import of goods?

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Whether a respondent can avail concessional rate of 2% CST without authorised in the registration certificate issued?

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Whether the installation of Weigh Bridge by the respondent in another place other than his business place shown in the certificate of registration is correct and sustainable?

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Is the findings of the Tribunal are correct and sustainable as per the provisions in the K.V.A.T. Act?”

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Though the Intelligence Officer as well as the Assistant Commissioner (Appeals) have entered into a finding that there was misuse of Form 16 for transportation of goods intended for commercial use, the Tribunal reversed the said

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finding on the ground that Section 70B of the KVAT Act

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was introduced with the Finance Act 2009 with effect from

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1.4.2009 and notification giving effect to the provision was

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published only on 29.7.2009 whereas the consignment was

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transported on 31.5.2009 and being a penal provision, it cannot have retrospective effect. The Tribunal, on facts, found that the words ‘has used’ make it clear that offence will be made out only if the imported goods are used for other purpose than own use. The Tribunal has also held that the order of the Intelligence Officer nor the first appellate authority do not enter into a finding that the import is for intended commercial use and any import for intended commercial use or purpose other than own use cannot be made punishable for the simple reason that penalty is to be imposed on tax effect arising from use. Without tax effect penalty cannot be imposed based on the value of the commodity. On going through the order impugned, we are of the considered opinion that this court can interfere in a revision only on a question of law and not on a question of

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fact. The Tribunal, on facts, found that there is nothing on

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record to show that the commodity was put to commercial

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use. Hence, invoking Section 63 of the KVAT Act, we are of the considered opinion that there arises no question of law and the questions of law raised are answered against the State and therefore, the revision fails.

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Accordingly, the O.T. Revision is dismissed.

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S.V.BHATTI, JUDGE

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sd BASANT BALAJI, JUDGE

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dl/

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OT.REV NO. 139 OF 2017

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APPENDIX OF OT.REV 139/2017

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PETITIONER ANNEXURES

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ANNEXURE A A TRUE COPY OF PENALTY ORDER UNDER SECTION 70B OF KVAT ACT DATED 01/08/2009 FOR THE ASSESSMENT YEAR 2009-10 PASSED BY THE INTELLIGENCE OFFICER, SQUAD NO.VI, KOZHIKODE. ANNEXURE B A TRUE COPY OF THE ORDER DATED 09/11/2010 IN KVATA 041 OF 2009. ANNEXURE C CERTIFIED COPY OF THE ORDER OF THE TRIBUNAL IN T.A. (VAT) NO.194/2016 DATED 15/11/2016. ANNEXURE C-1 PHOTOCOPY OF ANNEXURE C.

State of Kerala v. Sri.N.P.Ashraf, Proprietor, M/S.Wel-Tech Engineering Company

Case brief

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What did the court decide?

State of Kerala v. Sri.N.P.Ashraf, Proprietor, M/S.Wel-Tech Engineering Company

Case brief

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What did the court decide?

What the court decided

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