Dismissed

Haroon Rasheed v. State of Kerala

Kerala HC18 Aug 2023WP(C)/7362/2012

Case brief

AI extract

What is this about?

The Court dismissed a writ petition challenging a modified tax assessment order. The petitioner argued that the assessment authority could not have completed the assessment due to time limits, and that subsequent statutory amendments applying retrospectively were invalid. The Court held the petition was not maintainable in the absence of an appeal against the remand order and dismissed it.

What did the court decide?

The writ petition praying for quashing of the modified assessment order and declaring the amendment laws invalid as arbitrary was dismissed.

Haroon Rasheed Vs State of Kerala — GST and Indirect Tax | Kerala HC (2023)

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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 AMIT RAWAL

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FRIDAY, THE 18^TH DAY OF AUGUST 2023 / 27TH SRAVANA, 1945

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WP(C) NO. 7362 OF 2012

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PETITIONER/S:

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HAROON RASHEED, PROPRIETOR, S.M.TRADERS, ENNAKKOTTIL STREET, PALAKKAD DISTRICT.

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BY ADV SRI.K.J.VINCENT (MUNDAMVELI)

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RESPONDENT/S:

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1 STATE OF KERALA, REPRESENTED BY THE SECRETARY, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM.

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2 THE COMMISSIONER OF COMMERCIAL TAXES, THIRUVANANTHAPURAM.

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3 THE COMMERCIAL TAX OFFICER, 1ST CIRCLE, DEPARTMENT OF COMMERCIAL TAXES, PALAKKAD, PIN-678 001.

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BY ADVS.GOVERNMENT PLEADER

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OTHER PRESENT:

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SPL GP TAX SYED M THANGAL

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 15.06.2023, THE COURT ON 18.08.2023 DELIVERED THE FOLLOWING:

WPC 7362/2012

AMIT RAWAL, J.

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WP(C) No.7362 of 2012

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Dated this the 18^th day of August, 2023

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J U D G M E N T

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Petitioner herein was a registered dealer under Kerala General Sales Tax Act, 1963 ('KGST Act', for short) bearing registration No.31112802. While filing returns for the financial year 20042005 disclosed total taxable turnover of Rs.76,01,630/-, but could not produce the books of accounts called for by the third respondent, i.e. the Commercial Tax Officer, 1^st Circle, Palakkad which led to an assessment order Ext.P1 dated 22.01.2008 wherein third respondent Commercial Tax Officer, assessed the taxable turnover for the aforementioned period to be Rs.3,81,78,430/-, accordingly assessed an amount to the tune of Rs.15,87,272/- as tax due from the petitioner.

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WPC 7362/2012

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Aforesaid order Ext.P1 was challenged before the appellate authority, but, the said authority vide order Ext.P2 dated 15.12.2008 concurred with the assessment order. Aggrieved by order Ext.P2 petitioner moved the Appellate Tribunal. The Tribunal vide Ext.P3 order dated 13.01.2010 modified the assessment order Ext.P1, and remanded the matter to first respondent State of Kerala represented by Secretary, Tax Department for passing modified assessment. Though matter was remanded vide Ext.P3 order on 13.01.2010, the third respondent Commercial Tax Officer did not pass modified assessment for almost twenty two (22) months and later on 26.11.2011 passed a modified assessment fixing tax liability to the tune of Rs.13,50,021/- vide Ext.P4 which has been assailed through this writ petition with the following prayers:-

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“1. Issue a writ of certiorari calling for the original of Ext.P4 order and quashing the same;

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WPC 7362/2012

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Declare that sec. 5(2)(ii)(b) and sec. 1(2) (iv) of Kerala Finance Act 2011 to the extent the same amended the 3rd proviso to s.17(8) of the KGST with retrospective from 01.04.2011 are arbitrary, invalid, unreasonable and hence unenforceable;”

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Ext.P4 order was passed with the aid of the amendment to the third proviso to Section 17(8) of the KGST Act extending the time for completion of modified assessment up to 31.3.2012. Though the amendment to Sections 5(2)(ii)(b) and 1(2)(iv) of Kerala Finance Act, 2011 was notified on 8.11.2011, but was brought into force retrospectively with effect from 1.4.2012. The course adopted, as per submission, by the respondents is illegal and with the object of taking away the accrued right.

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The amendment was brought to permit the assessing authority to pass modified assessments which they could not have done in view of the absence of extension of time limit.

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WPC 7362/2012

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On the other hand, learned Government Pleader for the Revenue countered the argument by submitting that the best judgment assessment in respect of the case of the petitioner for the year 2004-05 was completed vide order Ext.P1 dated 22.1.2008, whereby balance tax due was Rs.15,87,272/- plus interest. Dealer did not account the declaration for an amount of Rs.1,67,82,125/- and also suppressed an amount of Rs.1,22,990/- detected while checking vehicle. Assessing authority added 50% of the purchase suppression with 20% gross profit in respect of such declaration and added two times of the suppression detected on the vehicle checked.

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First appellate authority also concurred with the findings of the assessing authority.

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Though the Tribunal remanded the matter, but while dealing with the appeal had noted that the plea raised by the petitioner with regard to the death of their accountant was an attempt to

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WPC 7362/2012

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fill up the lacuna for delay for producing books of accounts before the Tribunal. The said order was not assailed before this Court. It was in that view of the fact, the Tribunal reduced the addition in respect of declaration to 25% and “two times” addition to “one time”. Accordingly, modified order dated 26.11.2011 was served on the petitioner on 17.12.2011.

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The present writ petition is not maintainable in the absence of availment of the remedy of appeal as was done in the past. The petitioner had already suppressed crores of rupees and evaded tax amounting to lakhs of rupees and urged this Court for dismissal of the writ petition.

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I have heard the learned counsel for the parties and appraised the paper book. There is no merit in the arguments.

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It would be expedient to extract the relevant portion of the order of the Tribunal,

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WPC 7362/2012

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Ext.P3. The same reads as under:

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“..... So the contention regarding the death of the Accountant now putforward by the appellant appears to be an after thought to fill up the lacuna for the long lapse for non-production of accounts before the authorities, in spite of the demand. So the books of accounts now produced before this Tribunal is seems to be a cooked up one and no evidentiary value can be attributed to it. Hence, they are not accepted.”

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The aforementioned findings, admittedly have not been assailed. There was no retrospectivity while causing amendment in the Finance Act as the financial year always starts with effect from first of April every year. No documentary evidence has been placed on record in respect of the valuable right alleged to have been accrued in favour of the petitioner. Tribunal had already given the benefit of reduction of addition towards probable omission and suppression from “two times” to “one time” and reduced the declaration

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WPC 7362/2012

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from “50%” to “25%”. No explanation has come-forth in not availing the remedy of appeal even if the order on remand of the Tribunal, a fresh order of assessment was passed. All these factors have been examined.

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Writ petition is bereft of any merit and is accordingly dismissed. Pending interlocutory applications, if any, in the writ petition would stand dismissed.

Sd/-

AMIT RAWAL JUDGE

WPC 7362/2012

APPENDIX OF WP(C) 7362/2012

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PETITIONER EXHIBITS EXHIBIT P1 A TRUE COPY OF THE ASSESSMENT ORDER DATED 22.01.2008 PASSED BY THE 3RD RESPONDENT. EXHIBIT P2 A TRUE COPY OF THE APPELLATE ORDER DATED 15-12-2008 PASSED AGAINST THE PETITIONER. EXHIBIT P3 TRUE COPY OF THE ORDER DATED 13.01.2010 ISSUED BY APPELLATE TRIBUNAL. EXHIBIT P4 A TRUE COPY OF THE MODIFIED ASSESSMENT ORDER DATED 26.11.2011 BY THE 3RD RESPONDENT. EXHIBIT P5 A TRUE COPY OF THE NOTIFICATION DATED 08-11-2011.

Haroon Rasheed v. State of Kerala

Case brief

What is this about?

What did the court decide?

Haroon Rasheed v. State of Kerala

Case brief

What is this about?

What did the court decide?

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