Allowed

K.G.Rejimon v. State of Kerala

Kerala HC25 Nov 2022OT.Rev/22/2021

Case brief

AI extract

What is this about?

This Tax Revision petition challenges a circular dismissing appellant's appeal regarding thermic fluid heater tax rate. High Court held Commissioner erred in ignoring expert opinion and lacked jurisdiction for reassessment post-appellate decision, allowing revision and remitting matter for fresh disposal.

What did the court decide?

Revision allowed; Commissioner order dated 28.12.2020 set aside and remitted for fresh consideration on all grounds raised.

K.G.Rejimon 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.REVN. NO.22 OF 2021

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REVISION PETITIONER/APPELLANT/APPELLANT/ASSESSEE:

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K.G.REJIMON, PROPRIETOR,
M/S.THERMAL TECH ENGINEERS,
PULLUVAZHI P.O., PERUMBAVOOR.

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BY ADVS.
P.S.SOMAN
SMT.T.RADHAMONY

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RESPONDENT/RESPONDENT/REVENUE:

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STATE OF KERALA,
REPRESENTED BY ITS SECRETARY,
TAXES DEPARTMENT, GOVT. SECRETARIAT,
THIRUVANANTHAPURAM-695 001.

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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.22/2021

ORDER

(Dated: 25th November, 2022)

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Basant Balaji, J.

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This Tax Revision is filed against the order dated
28.12.2020 in R.P.Order No.CT/4057/2016-R1 of the
Commissioner of State Tax, State Goods and Service Tax
Department, Thiruvananthapuram.

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2. The revision petitioner is the registered

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dealer dealing with Thermic Fluid Heater. The assessing
authority noticed that the dealer conceded the sale as
machinery and parts under the 3rd schedule, which is
taxable at 4%. As per the clarification order No.C7-
2881/06/CT, dated 12.08.2006 of the Commissioner of

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Commercial Taxes, items Thermic Fluid Heaters, steam
boilers, etc. are clarified as products coming under
Schedule-V and taxable at 12.5%. The Commercial Tax

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Officer completed the assessment of the petitioner for

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the year 2009-10 under Section 25(1) of the KVAT Act
and levied tax at 12.5%. Against the assessment order,

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OT.Rev.22/2021

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the petitioner filed a statutory appeal before the 1st

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Appellate Authority.

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3. The 1st Appellate Authority by order dated

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31.01.2014 allowed the appeal as follows:

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“I have examined the contentions raised in
appeal and records. The learned assessing authority
had completed the assessment for the year 2009-10
in the light of the clarification order No.C7-
2881/06/ dated 12.8.2006 of the Commissioner,
Commercial Taxes, Thiruvananthapuram the item such
as Thermic Fluid Heaters, Steam Boilers are
clarified as the product exigible to tax @ 12.5%.

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In the judgment dated 15.2.2008 in OTA No.2
of 2008, the Hon’ble High Court of Kerala set aside
the clarification order passed by the Commissioner
of Commercial Taxes and remitted back to the
Commissioner, Commercial Taxes to re-do the matter.
So the clarification is not in force now. But there
is no observation was made by the Hon’ble High
Court in respect of the rate of tax of commodities
covered by the clarification order. Considering
facts and circumstances of the case, I am of view
that it is only fair and reasonable to re-do the
assessment. The appellant is directed to produce
relevant documents connected with the case and the
assessing authority directed to consider the case
afresh in the light of above judgment. The appeal
is disposed as modified as indicated above.
Ordered accordingly.”

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4. The Assessing Authority in compliance with the

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direction of the 1st Appellate Authority, modified the
assessment order dated 11.11.2013 and passed a fresh
order dated 16.10.2015, wherein, the tax levied is at

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OT.Rev.22/2021

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the rate of 4%. The Deputy Commissioner, Commercial

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Taxes, Mattancherry, in exercise of the power under
Section 56(3) of the KVAT Act, cancelled the order dated
16.10.2015 of the Assessing Authority and remitted back

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for fresh disposal relying on a clarification order
No.C3/28881/06/CT dated 07.04.2016, whereby the rate of

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tax of Thermic Fluid Heater was fixed as 14.5%. The
revision petitioner challenged the order dated
03.09.3016 of the Deputy Commissioner, before the
Commissioner of Sales Tax, State Goods and Service Tax
Department, Thiruvananthapuram. The Commissioner heard
the parties and passed Annexure-H order dated
28.12.2020, dismissing the revision and confirming the
order dated 03.09.2016 of the Deputy Commissioner.
Aggrieved by the order of the Commissioner of Sales
Tax, this revision is filed by the petitioner.

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5. Heard the learned counsel for the petitioner
as well as the respondent.

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6. The main contention raised by the counsel for

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the revision petitioner is that, along with the

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OT.Rev.22/2021

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revision petition a detailed hearing note was filed

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before the Commissioner of Sales Tax, in which he raised

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8 grounds to substantiate the illegality and
irregularity in the order of the Deputy Commissioner

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and the Commissioner without considering any of the
grounds raised by the petitioner, dismissed the
revision in a cryptic manner. One of the grounds raised
is, the petitioner has produced an expert opinion from
the qualified engineer explaining the nature, function
and use of the machine dealt with by the petitioner.
The opinion of the expert is produced in this revision
as Annexure-G(5).

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7. The substantial questions of law that arise

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for consideration are:

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a. Whether on the facts and in the circumstance
of the case, is not the revisional authority, the
Commissioner, erred in dismissing the revision
petition filed by the petitioner?

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b. Whether on the facts and in the circumstance
of the case is not the revisional authority, the
Commissioner, erred in leaving the grounds of
revision raised in the revision petition without any
finding?

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c. Whether on the facts and in the circumstance
of the case is not Annexure-H order passed by the

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OT.Rev.22/2021

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Commissioner violated the principles of natural
justice?

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d. Whether on the facts and in the circumstance
of the case is not the revisional authority, the
Commissioner, erred in applying Annexure-D
clarification dated 07.04.2016 for the assessment
of the year 2009-10 completed on 16.10.2015
especially in view of the decision in Sreedhareeyam
Ayurvedic Medicines (P) Ltd. & Others v. State of
Kerala, (2011) 19 KTR 561(Ker.)?

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e. Whether on the facts and in the circumstance
of the case is not the revisional authority, the
Commissioner, erred in applying the higher rate of
tax for the product sold by the petitioner in
between the period from 15.02.2008 to 07.04.2016?

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8. The learned counsel argues that, it is settled

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law that the evidence of experts is tendered, and the
statutory authority is bound to rely on it unless such
material can be rebutted with contra evidence which has
more evidentiary value on comparison of both the
reports of the expert. The learned counsel relies on
the decision of this court in State of Kerala v. M.R.F.

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Ltd., (2016) 90 VST 304 (Ker.),to support this
proposition. He also raised another contention that the
Deputy Commissioner has passed the order involving
Section 56(3) of the KVAT Act. The Section clearly
provides that, if an issue has been a subject matter of

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OT.Rev.22/2021

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an appeal and the said subject matter has been decided

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by the appellate authority, the Deputy Commissioner
cannot invoke the jurisdiction under Section 56(1). He
also contends that, since the first appellate authority

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has already decided in favour of the petitioner
regarding the rate of tax applicable, the same issue
cannot be reopened by the Deputy Commissioner invoking
the powers under Section 56(3). Be that as it may, going

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by the decision cited (supra), the Commissioner has not
gone into the expert opinion produced before it, in
arriving at the conclusion that dismissing the
petition. Having gone through the judgment of the
Division Bench of this Court in MRF’s case, we are of

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the considered opinion that the Commissioner ought to

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have taken into consideration the report of the expert

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and the order should have been passed thereafter.
Moreover, there is yet another contention of the
petitioner that under Section 56(3) of the KVAT Act,

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the Deputy Commissioner cannot invoke the jurisdiction,
since the 1st Appellate Authority has already taken a

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OT.Rev.22/2021

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decision in respect of the rate of tax applicable. In
view of the matter, we are of the considered opinion
that the order of the commissioner has to be set aside
and to be redone.

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In the result, the O.T.Revision is allowed and the
substantial questions of law raised are answered in
favour of the assessee, and the order of the
Commissioner of Sales Tax dated 28.12.2020 is set aside
and remitted for fresh consideration on all the grounds
raised by the petitioner in the memorandum of revision
and in the hearing note.

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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.22/2021

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APPENDIX OF OT.REV 22/2021

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PETITIONER ANNEXURES:

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ANNEXURE ACOPY OF THE CLARIFICATION NO.C7-28881/06/CT
DATED 12.8.2006 ISSUED BY THE COMMISSIONER.
ANNEXURE BCOPY OF THE ORDER OF THE IST APPELLATE
AUTHORITY IN KVATA 99/2014 DATED 31.1.2014.
ANNEXURE CCOPY OF THE REVISED ASSESSMENT ORDER
NO.32151392932/2009-10 DATED 16.10.2015
ISSUED BY THE ASSESSING AUTHORITY.
ANNEXURE DCOPY OF THE CLARIFICATION ORDER NO.C3-
28881/06/CT DATED 7.4.2016 ISSUED BY THE
AUTHORITY FOR CLARIFICATION.
ANNEXURE ECOPY OF THE SUO MOTU REVISION ORDER ISSUED
BY THE DEPUTY COMMISSIONER, COMMERCIAL
TAXES, MATTANCHERRY FOR THE YEAR 2009-10.
ANNEXURE FTRUE COPY OF THE GROUNDS OF REVISION RAISED
BEFORE THE COMMISSIONER IN THE REVISION
PETITION.
ANNEXURE GTRUE COPY OF THE HEARING NOTE ALONG WITH
THE COPY OF EXPERT OPINION AND COPY OF THE
CASE LAWS RELIED ON BY THE PETITIONER FILED
BEFORE THE COMMISSIONER.
ANNEXURE HCOPY OF THE REVISION ORDER ISSUED BY THE
COMMISSIONER OF STATE TAX, SGST DEPARTMENT,
THIRUVANANTHAPURAM.

K.G.Rejimon v. State of Kerala

Case brief

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K.G.Rejimon v. State of Kerala

Case brief

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