Value Added Tax; Kerala Small Industries Development Corporation Ltd. Vs. Intelligence Officer (IB), Aluva [Kerala High Court, 12-07-2016]

Value Added Tax Act, 2003 (Kerala) – S. 67 (1) – Show-cause notice – Can entertain a writ petition – Appellant, without giving an explanation, has rushed to the Court – The parties have an efficacious alternative remedy – therefore, dismissed the writ appeal as meritless.

2016 (3) KLT 891 : 2016 (4) KLJ 38 : 2016 (4) KHC 44

IN THE HIGH COURT OF KERALA AT ERNAKULAM

ANTONY DOMINIC & DAMA SESHADRI NAIDU, JJ.

Writ Appeal No.127 of 2015

Dated this the 12 th day of July, 2016

AGAINST THE JUDGMENT IN WP(C) 35359/2014 of HIGH COURT OF KERALA DATED 06-01-2015

APPELLANT/PETITIONER

KERALA SMALL INDUSTRIES DEVELOPMENT CORPORATION LTD., (MARKETING DIV), H.O.HOUSING BOARD BUILDING, SANTHINAGAR, TRIVANDRUM AND DIVISIONAL OFFICE AT GANDHI NAGAR, ERNAKULAM, REPRESENTED BY ITS MANAGING DIRECTOR DR.SAJI BASHEER.

BY ADVS.SRI.S.ANANTHAKRISHNAN SRI.N.K.SUBRAMANIAN

RESPONDENTS/RESPONDENTS

1. INTELLIGENCE OFFICER (IB), DEPARTMENT OF COMMERCIAL TAXES, GOVERNMENT OF KERALA, MINI CIVIL STATION, ALUVA – 683 523.

2. ASSISTANT COMMISSIONER, SPECIAL CIRCLE-II, ERNAKULAM – 682 031.

R BY GOVERNMENT PLEADER SMT.SHOBA ANNAMMA EAPEN

J U D G M E N T

Dama Seshadri Naidu, J.

The appellant filed W.P.(C)No.35359/14 assailing Exts.P4 to P6 notices issued by the respondent authorities under Section 67(1) of the Kerala Value Added Tax Act, 2003. Later, aggrieved by the dismissal of the writ petition, the appellant has filed this intra-court appeal.

2. The appellant is a public sector Corporation selling and supplying, among other things, water beds to the Government Hospitals. In the course of time, the Intelligence Officer, the Department of Commercial Taxes, issued Exts.P4 to P6 notices under Section 67(1) of the Kerala Value Added Tax Act: that the appellant has misclassified the product and, as a result, not remitted the actual tax due to the Government. Assailing Exts.P4 to P6, the appellant filed a writ petition.

3. A learned Single Judge of this Court dismissed the writ petition on a preliminary ground: Exts.P4 to P6 are show-cause notices and that the appellant ought to have replied to them before taking recourse to any adjudicatory process. Aggrieved, the assessee filed this intra-court appeal.

4. The learned counsel for the appellant has contended that the first respondent lacks jurisdiction to issue Exts.P4 to P6 notices. He has further contended that the authority concerned was predetermined, and any reply by the appellant to Exts.P4 to P6 notices would be an exercise in futility. According to him, as the rate of tax to be applied is only 4%, rather than 12.5%, this Court ought to have, in the first instance, interfered with Exts.P4 to P6 notices. He has rested his case on a few precedents dealing with the public law remedy vis-à-vis a show-cause notice.

5. The learned Government Pleader has, on the other hand, contended that the appellant, as a precondition, ought to have answered the claims set out in the show-cause notices. She has also further submitted that the appellant, even thereafter, has an efficacious alternative remedy to agitate further.

6. Heard the learned counsel for the appellant and the learned Government Pleader, apart from perusing the record.