Dismissed

M/S.Hotel Aida v. State of Kerala

Kerala HC1 Aug 2022ST.Rev./21/2014

Case brief

AI extract

What is this about?

The Full Bench in S.T.(Rev.) No.21/2014 construed Section 7(b) of the KGST Act, upholding the Department's method of calculating total turnover tax by comparing tax conceded in returns/accounts against tax paid over the previous three years. The revision against the Tribunal's order allowing the dealer to set off losses was dismissed.

What did the court decide?

The Sales Tax Revision was dismissed with directions for the dealer to calculate losses based on the Full Bench's interpreted method.

M/S.Hotel Aida Vs State of Kerala — Constitutional and Fundamental Rights | 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 MONDAY, THE 1^ST DAY OF AUGUST 2022 / 10TH SRAVANA, 1944

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ST.REV. NO. 21 OF 2014

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AGAINST THE ORDER TAVAT 38/2011 OF STAT ADDITIONAL BENCH, KOTTAYAM

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PETITIONER/S:

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M/S.HOTEL AIDA M.C.ROAD,KOTTAYAM,REPRESENTED BY ITS MANAGING PARTNER,MOHAN JACOB.

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BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON; SRI.MAHESH V.MENON

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RESPONDENT/S:

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STATE OF KERALA REPRESENTED BY ITS SECRETARY,TAXES DEPT.THIRUVANANTHAPURAM-695001.

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OTHER PRESENT:

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SPL GP MOHAMMED RAFIQ

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THIS SALES TAX REVISION HAVING COME UP FOR ADMISSION ON 01.08.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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S.T.(Rev.) No.21/2014

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O R D E R

S.V. Bhatti, J.

Heard Advocate Mr Harisankar V Menon and Special Government Pleader (Taxes) Mr Mohammed Rafiq V K for parties.

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The dealer, registered under the KGST Act, is the petitioner. The dealer challenges the order of the Tribunal dated 23.09.2013. The revision relates to the assessment year 2010-11. The issue arises under Section 7(3) of the KGST Act.

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The Full Bench, by Order dated 06.4.2022 in the instant Revision, considered the question and held as follows:

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“16. We are afraid the said argument omits to take note of the factors on which the highest turnover tax is determinable. Construed literally, the word highest is comparing all the three

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S.T.(Rev.) No.21/2014

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situations. The word ‘paid’ is in the company of words “turnover tax” which means the tax permitted to be paid in the previous year at a compounded rate. The authority verifies the highest tax payable as conceded in the returns or accounts on one hand and turnover tax paid on the other hand whichever is the highest among the three, the applicable percentage viz. 115% is applied and compounded rate for the subsequent year is accepted. The construction as commended to the Court by Mr Harisankar, we are afraid, will efface the clear expression in Section 7(b), viz. highest turnover tax payable as conceded in the return/accounts. ‘Payable’ is understood in the company of the return or accounts and ‘paid’ is understood in the company of the turnover tax. By applying the rule of Noscitur-a-sociis , we hold that for the purpose of Section 7(b) the turnover tax payable by the dealer as conceded either in the return or accounts or the turnover tax paid for the previous consecutive three years is the deciding factor. So interpreted, we hold that the construction adopted by the Tribunal which reads as follows is the correct and literal construction available in the circumstances of the case.

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“The State contends that TOT payable as per accounts is to be taken for calculating TOT. Respondents contention is that it is to be done on the basis of return. On a perusal of relevant provision, it is very clear that the clause applicable to this assessee is clause (b) of Sec.7. In clause (b) itself, 3

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S.T.(Rev.) No.21/2014

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situations arise.

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Highest turnover tax payable by assessee as conceded in return for any of the previous consecutive three years or

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2.Highest turnover tax payable by assessee as conceded in accounts for any of the previous consecutive three years or 3.Highest turnover tax paid by assessee for any of the previous consecutive three years.”

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The question is answered as indicated above…..”

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By following the principle laid down by the Full Bench, the questions of law are answered against the dealer, in favour of the Department.

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S.T. Revision stands dismissed consequently.

S.V.BHATTI

JUDGE

BASANT BALAJI

JUDGE

jjj

S.T.(Rev.) No.21/2014

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APPENDIX OF ST.REV. 21/2014

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PETITIONER ANNEXURES ANNEXURE-A COPY OF ORDER ISSUED BY THE COMMERCIAL TAX OFFICER, KOTTAYAM ANNEXURE-B COPY OF THE APPELLATE ORDER OF THE DEPUTY COMMISSIONER (APPEALS) KOTTAYAM ANNEXURE C COPY OF ORDER ISSUED BY THE AGRICULTURAL INCOME TAX & SALES TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH, KOTTAYAM.

M/S.Hotel Aida v. State of Kerala

Case brief

What is this about?

What did the court decide?

M/S.Hotel Aida v. State of Kerala

Case brief

What is this about?

What did the court decide?

What the court decided

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