Allowed

Indira Devi.a.v v. State of Kerala

Kerala HC25 Nov 2022OT.Rev/167/2020

Case brief

AI extract

What is this about?

The Court set aside the Commissioner's order dated 06.11.2019 under Section 52 of the KVAT Act. Citing the Full Bench judgment in W.P.(C)No.5467 of 2017, the Court held that trade discounts do not form part of sales turnover under the KVAT Act. The matter was remitted to the Commissioner for fresh assessment after affording the petitioner an opportunity to be heard.

What did the court decide?

The order of the Commissioner dated 06.11.2019 set aside and matter remitted to the Commissioner for fresh consideration.

Indira Devi.a.v Vs State of Kerala — GST and Indirect Tax | 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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FRIDAY, THE 25TH DAY OF NOVEMBER 2022 / 4TH AGRAHAYANA, 1944

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O.T.REV. NO.167OF 2020

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(AGAINST THE ORDER No.CT/1288/18-R2 DATED 06.11.2019 BY THE
COMMISSIONER OF STATE & GOODS SERVICE TAX DEPT., KERALA,
THIRUVANANTHAPURAM)

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REVISION PETITIONER/ASSESSEE:

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INDIRA DEVI.A.V, AGED 54 YEARS,
STAR TRADERS, 28TH MILE, NAVAIKULAM,
THIRUVANANTHAPURAM DISTRICT.

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BY ADVS.
SHRI.S.SURESH BABU (CHERUNNIYOOR)
SHRI.SIVANKUTTY S.

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RESPONDENT/REVENUE:

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STATE OF KERALA,
REPRESENTED BY THE COMMISSIONER,
STATE GOODS AND SERVICE TAX DEPARTMENT,
TAX TOWERS, KARAMANA,
THIRUVANANTHAPURAM-695 002.

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BY GOVERNMENT PLEADER, SMT. M.M. JASMIN

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THIS OTHER TAX REVISION (VAT) HAVING COME UP FOR ADMISSION
ON 25.11.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

OT.Rev.167/2020

ORDER

(Dated: 25th November, 2022)

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Basant Balaji, J.

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The revision petitioner challenges the order of the
Commissioner of State Goods and Services Tax Department,
Kerala dated 06.11.2019. In this revision, questions of
law are raised.

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2. The petitioner is the registered dealer under

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the KVAT Act, 2003 trading in cement. During the year
2011-12, the Assistant Commissioner, Special Circle,
Thiruvananthapuram, issued a notice under Section 25 of
the KVAT Act, 2003 pointing out the receipt of a
discount for Rs.88,49,786/-, which is assessable as per
explanation VII to Section 2(iii) of KVAT Act, 2003.
Though a reply was filed on 13.02.2014 to the pre-
assessment notice, the assessing authority completed
the assessment for the year as per the assessment order
dated 22.04.2014 determining a total and taxable

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OT.Rev.167/2020

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turnover at Rs.10,02,74,840/- as against that proposed

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rate of Rs.1,10,24,168/-. Though the assessing
authority found that the discount receipt will not form
part of the sales turnover, the assessing authority
disallowed an input tax credit to the petitioner. The
petitioner challenged the order of the assessing
authority before the Deputy Commissioner of Appeals,
Thiruvananthapuram, on the ground that the petitioner

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has a vested right to input tax credit on the entire
tax paid during purchase as per the invoices. The first
appellate authority disposed of the appeal, observing
that the petitioner was not given an opportunity to file
an objection which is against the principles of natural
justice and also against the mandatory provision under
Section 25 of the KVAT Act. The appellate authority,
therefore, directed the assessing authority to modify
the assessment after affording the opportunity to the
petitioner to substantiate her arguments.

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3. The assessing authority thereafter issued a

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pre-assessment notice dated 10.12.2015 under Section

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OT.Rev.167/2020

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25(1) of the Act, proposing to add up the discount
again, to fix higher taxable turnover than that fixed
in the original assessment order. Objections were filed
to the pre-assessment notice dated 10.12.2015. The
assessing officer passed modified assessment order
dated 13.01.2016. Aggrieved by the modified assessment
order dated 13.01.2016, the petitioner approached this
Court by filing W.P.(C)No.12705 of 2016 and this court
by judgment dated 29.08.2016 set aside the order of
assessment and directed the assessing officer to
consider the matter afresh in the light of the order of
the appellate authority.

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4. In the meanwhile, the Deputy Commissioner in
exercise of the suo motu power under Section 56 of the
KVAT Act issued a show cause notice dated 27.07.2016
proposing to cancel the original assessment order dated
22.04.2014. Objections were filed on 11.08.2017 to the
show cause notice of the Deputy Commissioner. The Deputy
Commissioner by order dated 27.09.2017 found that non-
assessment of discount receipt in the instant case is

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OT.Rev.167/2020

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prejudicial to the interest of revenue and therefore
the original assessment completed stands cancelled and
the assessing authority was directed to complete the
assessment for the period from 20.11.2012 afresh after
observing the principles of natural justice. Aggrieved
by the order of the Deputy Commissioner, the petitioner
preferred the revision before the Commissioner. The
Commissioner dismissed the revision by the impugned
order on 06.11.2019.

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5. The main contention raised by the counsel for
the appellant is that in view of the order of the Full
Bench of this Court dated 06.04.2022 in W.P.(C)No.5467
of 2017 and connected cases, the issue stands answered
that trade discount receipt will not form part of the
sales turnover and cannot be subjected to the
assessment. Therefore, the finding entered by the
Commissioner is set aside and remitted to the
Commissioner.

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6. 2nd question is regarding the disallowance of
input tax credit on discount receipts since the matter

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OT.Rev.167/2020

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is remitted to the Commissioner. The other findings
entered are also set aside.

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In the result, the order of the Commissioner dated
06.11.2019 is set aside and remitted to the Commissioner

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for fresh consideration in accordance with law after
affording the petitioner an opportunity for hearing.

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 Sd/-

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S.V.BHATTI, JUDGE

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Sd/-
 BASANT BALAJI, JUDGE

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ss

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OT.Rev.167/2020

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APPENDIX OF OT.REV 167/2020

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PETITIONER ANNEXURES:

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ANNEXURE AA TRUE COPY OF THE PRE-ASSESSMENT NOTICE
DATED 03.02.2014 UNDER SECTION 25(1) OF THE
KVAT ACT, 2003 FOR THE YEAR 2011-12.
ANNEXURE BA TRUE COPY OF THE REPLY DATED 13.02.2014
FILED BY THE PETITIONER.
ANNEXURE CA TRUE COPY OF THE ASSESSMENT ORDER DATED
22.04.2014 ISSUED BY THE 3RD RESPONDENT
ASSESSING AUTHORITY FOR THE YEAR 2011-12,
ANNEXURE DA TRUE COPY OF THE APPEAL DATED 08.05.2014
FILED BY THE PETITIONER AGAINST ANNEXURE C
ASSESSMENT ORDER FOR THE YEAR 2011-12.
ANNEXURE EA TRUE COPY OF THE APPELLATE ORDER
01.07.2015 OF THE DEPUTY COMMISSIONER
(APPEALS) THIRUVANANTHAPURAM FOR THE YEAR
2011-12 AGAINST ANNEXURE C ASSESSMENT
ORDER.
ANNEXURE FA TRUE COPY OF THE SHOW CAUSE NOTICE DATED
10.12.2015 UNDER SECTION 25(1) OF THE KVAT
ACT, 2003 FOR THE YEAR 2011-12 ISSUED BY
THE ASSESSING AUTHORITY, IN CONNECTION WITH
MODIFICATION OF ASSESSMENT AS PER ANNEXURE
E APPELLATE ORDER.
ANNEXURE GA TRUE COPY OF THE REPLY DATED 08.01.2016
FILED BY THE PETITIONER TO ANNEXURE F
NOTICE DATED 10.12.2015.
ANNEXURE HA TRUE COPY OF THE MODIFIED ASSESSMENT
ORDER DATED 13.01.2016 ISSUED BY THE NEW
ASSESSING AUTHORITY FOR THE YEAR 2011-12.
ANNEXURE ITRUE COPY OF JUDGMENT DATED 29.08.2016 IN
W.P.(C) NO. 12705 OF 2016 OF THE HON'BLE
HIGH COURT OF KERALA
ANNEXURE JTRUE COPY OF SHOW CAUSE DATED 27.07.2017
FOR SUO MOTU REVISION UNDER SECTION 56.
ANNEXURE KTRUE COPY OF REPLY DATED 11.08.2017 FILED
BY THE PETITIONER TO ANNEXURE J SHOW CAUSE.
ANNEXURE LTRUE COPY OF SUO MOTU REVISION ORDER OF THE
DEPUTY COMMISSIONER DATED 27.09.2017 UNDER
SECTION 56 FOR THE YEAR 2011-12.

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OT.Rev.167/2020

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`ANNEXURE M`	`TRUE COPY OF REVISION AP`	`PLICATIO`	`N DATED`
	`13.12.2017 BEFORE THE CO` `SECTION 59.`	`MMISSIONE`	`R UNDER`
`ANNEXURE N`	`TRUE` `COPY` `OF` `REVISION`	`ORDER`	`OF` `THE`
	`COMMISSIONER DATED 06.11.20` `59 FOR THE YEAR 2011-12.`	`19 UNDER`	`SECTION`
`ANNEXURE O`	`TRUE COPY OF THE ORDER IN`	`W.P.(C)`	`NO. 398`
	`OF 2020 DATED 09.01.2020`	`OF THE`	`HON'BLE`
	`HIGH COURT OF KERALA.`
`ANNEXURE P`	`TRUE COPY OF JUDGMENT IN W.`	`P.(C) NO.`	`398 OF`
	`2020 OF THE HON'BLE HIGH` `DATED 20.02.2020.`	`COURT OF`	`KERALA`

Indira Devi.a.v v. State of Kerala

Case brief

What is this about?

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Indira Devi.a.v v. State of Kerala

Case brief

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