Karvy Innotech Ltd vs Deputy Commissioner(Assmt)
2022 Latest Caselaw 919 Ker

            IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                PRESENT

      THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS

  TUESDAY, THE 25TH DAY OF JANUARY 2022 / 5TH MAGHA, 1943

                     WP(C) NO. 24913 OF 2021

PETITIONER:

            M/S.KARVY INNOTECH LTD
            (EARLIER KNOWN AS HCL SERVICES LTD),
            MIDLAND AREENA, 84B,
            MAROTTICHUVAD JN.,
            EDAPPALLY, KOCHI,
            REPRESENTED BY ITS AUTHORIZED REPRESENTATIVE
            MR.ABHISHEK VAISHYA
            BY ADVS.
            SRI.A.KUMAR
            SRI.P.J.ANILKUMAR
            SMT.G.MINI(1748)
            SRI.P.S.SREE PRASAD
            SRI.JOB ABRAHAM
            SRI.AJAY V.ANAND


RESPONDENT:

            DEPUTY COMMISSIONER(ASSMT)
            SGST DEPARTMENT, SPECIAL CIRCLE-111,
            ERNAKULAM-682 015.
            DR.THUSHARA JAMES, SR. GOVT. PLEADER

     THIS     WRIT   PETITION    (CIVIL)   HAVING   COME   UP   FOR
ADMISSION ON 11.01.2022, THE COURT ON 25.01.2022 DELIVERED
THE FOLLOWING:
 W.P.(C) No.24913/21                       -:2:-




                       BECHU KURIAN THOMAS, J.
                       --------------------------------
                        W.P.(C) No.24913 of 2021
                       --------------------------------
                   Dated this the 25th day of January, 2022

                                    JUDGMENT

Petitioner assails an order of assessment issued against it

for the assessment year 2016-17 under the Kerala Value Added

Tax Act, 2003 (for short, 'KVAT Act'). The grievance of the

petitioner arises from the impugned order having allegedly been

rendered, without any hearing. Petitioner contended that the

impugned order is issued without jurisdiction and in violation of

the principles of natural justice, since, an effective opportunity of

hearing was not granted to the petitioner apart from failing to

consider the reply filed initially to a notice under section 25(1) of

the KVAT Act.

2. Petitioner is a public limited company engaged in the

business of various IT related services. For the assessment year

2016-17, it had filed its annual return on 31.05.2017.

Thereafter, a notice dated 10.04.2018 issued under section 25(1)

of the KVAT Act was served on the petitioner, alleging various

irregularities. A reply notice was filed by the petitioner on

08.05.2018. The total escaped turnover proposed by the

assessing officer as per notice dated 10.4.2018 was

Rs.6,95,10,864/-. Petitioner pleads that subsequent to the reply

to the notice dated 10.04.2018, no communication was received

thereafter and that they assumed the matter to have been

closed. However, Ext.P5 notice dated 05.01.2021 was received

by the petitioner for the same assessment year, issued under

section 25(1) of the KVAT Act, wherein, the total escaped

turnover was proposed to be Rs.29,32,47,628/-.

3. Pursuant to the aforesaid notice, petitioner responded

by e-mail dated 25.01.2021, requesting an additional time of two

weeks for submitting the information and also sought an

opportunity for hearing before any orders are passed. By

communication dated 27.01.2021, produced as Ext.P8, the

respondent adjourned the proceeding to 02.02.2021 with an

assertion that 'no further adjournment will be granted'.

Presumably, there was no appearance on 02.02.2021. However,

by Ext.P9 dated 03.02.2021, petitioner sought an additional time

of one more week, for submitting its response and again sought

an opportunity of hearing. Though the documents produced

along with the writ petition do not show any adjournment on

02.02.2021, the communication produced as Ext.P10 reveals

that the assessing officer must have granted a further

adjournment. Again petitioner requested additional time of two

weeks through the latter part of Ext.P10. In the initial part of

Ext.P10, there is a communication issued by the respondent on

26.02.2021 adjourning the case to 01.03.2021.

4. Sri.A.Kumar, learned counsel for the petitioner

submitted that petitioner is subjected to great prejudice since

sufficient opportunity was not granted. It was also argued that

the entire affairs of the petitioner, especially those relating to the

taxation matters were being handled by the corporate office of

the petitioner at Uttar Pradesh and due to the surge in Covid

cases, there were difficulties for the petitioner to collate the data

for replying to the notices issued by the respondent, which was

the reason why the adjournments were sought for. Learned

counsel further submitted that no prejudice would be caused to

the Revenue if an opportunity is granted afresh.

5. Dr.Thushara James, learned Senior Government Pleader,

on the other hand, submitted that repeated opportunities were

granted to the petitioner and their failure to avail those

opportunities resulted in the impugned assessment order. It was

also argued that, in the circumstances of the case, it cannot be

contended that there was violation of the principles of natural

justice and hence the normal remedies provided in the statute

ought to be pursued by the petitioner.

6. I have considered the rival contentions.

7. An assessment order issued under section 25(1) of the

KVAT Act is impugned in this writ petition. The jurisdiction of the

High Court to interfere in matters relating to assessment of tax

arises only when there is an infringement of fundamental rights

or when the taxing authorities have assumed a jurisdiction not

vested in it or when there is a violation of the principles of

natural justice or when there is a challenge to the vires of the

Statute [see C.A.Abraham v. Income Tax Officer, Kottayam

and Anr. (AIR 1961 SC 609), N.T.Veluswami Thevar v.

G.Raja Nainar and Others (AIR 1959 SC 422), and Assistant

Commissioner of State Tax and Others v. Commercial

Steel Ltd. (2021) SCC Online SC 884)].

8. A perusal of the notices issued by the respondent as

Ext.P2 and Ext.P5 reveals that the latter of the notices dated

05.01.2021 was for a different amount and therefore the

petitioner ought to have replied to the specific allegations

mentioned in the said notice dated 05.01.2021. Failure to

consider the reply dated 08.05.2018, is, therefore, not material,

since the officer had, subsequent to the original notice, issued a

fresh notice within the period of limitation raising a different set

of allegations. Thus, I find that failure to consider Ext.P3 reply

given by the petitioner, while issuing Ext.P11 order of

assessment, does not vitiate the assessment order.

9. A perusal of Ext.P7, P8, P9 and P10 communications will

reveal that petitioner was granted several opportunities to object

to the notice dated 05.01.2021 and that every request for

adjournment was heeded to by the assessing officer. If the

petitioner fails to respond even after four or five adjournments,

the assessing officer is left without any remedy other than to

issue the assessment order.

10. While considering the question whether the petitioner

was deprived of an opportunity of hearing, this Court bears in

mind that, by Ext.P7, petitioner had sought only for two week's

time. By Ext.P9 he had only sought for one more week's time

and by Ext.P10 he sought for a further two weeks time. Thus

practically every request for adjournment was granted with a

specific rider that 'no further adjournment will be given'. In spite

of the above, further opportunities were granted to the

petitioner, but he failed to avail the same. Admittedly, as evident

from the impugned assessment order, even on 01.03.2021,

petitioner had failed to file any objection and even failed to

appear for a hearing. As a result of the failure of the petitioner

to appear for the hearings as well as the failure to file any

objection, the respondent could not have done anything other

than issuing an order of assessment, as proposed in the notice.

It is in the above circumstances that Ext.P11 came to be issued.

11. On a consideration of the sequence of events that

culminated in Ext.P11 assessment order, I am of the considered

view that petitioner was granted sufficient opportunity to contest

the assessment proceedings and his failure to do so cannot be

regarded as a violation of the principles of natural justice to

invoke the discretionary jurisdiction of this Court under Article

226 of the Constitution.

Hence, the writ petition stands dismissed. However, the

liberty of the petitioner to pursue his statutory remedies shall not

be affected by this judgment and if any such remedy is invoked,

the same shall be considered in accordance with law.

Sd/-

BECHU KURIAN THOMAS JUDGE vps

APPENDIX OF WP(C) 24913/2021

PETITIONER'S/S' EXHIBITS EXHIBIT P1 A TRUE COPY OF THE ANNUAL RETURN FOR THE ASSESSMENT YEAR 2016-17 DATED 30.5.2017 EXHIBIT P2 A TRUE COPY OF THE NOTICE DATED 10.4.2018 EXHIBIT P3 A TRUE COPY OF THE REPLY DATED 8.5.2018 EXHIBIT P4 A TRUE COPY OF THE LETTER DATED 14.5.2018 EXHIBIT P5 A TRUE COPY OF THE NOTICE DATED 5.1.2021 EXHIBIT P6 A TRUE COPY OF EMAIL DATED 12.1.2021 EXHIBIT P7 A TRUE COPY OF THE COMMUNICATION DATED 25.1.2021 EXHIBIT P8 A TRUE COPY OF THE COMMUNICATION DATED 27.1.2021 EXHIBIT P9 A TRUE COPY OF THE COMMUNICATION DATED 3.2.2021 EXHIBIT P10 A TRUE COPY OF THE COMMUNICATION DATED 26.2.2021 EXHIBIT P11 A TRUE COPY OF THE ASSESSMENT ORDER DATED 3.3.2021 EXHIBIT P12 A TRUE COPY OF THE RECTIFICATION APPLICATION DATED 15.3.2021 EXHIBIT P13 A TRUE COPY OF THE LETTER DATED 8.2.2021 EXHIBIT P14 A TRUE COPY OF THE EMAIL DATED 10.2.2021 EXHIBIT P15 A TRUE COPY OF THE EXTRACTS FROM 8FA REPORT EXHIBIT P16 A TRUE COPY OF THE LETTER DATED 29.6.2021

EXHIBIT P17 A TRUE COPY OF THE LETTER DATED 13.10.2021 EXHIBIT P18 A TRUE COPY OF THE LETTER SEEKING WITHDRAWAL OF RECTIFICATION APPLICATION DATED 3.11.2021 EXHIBIT P19 A TRUE COPY OF THE LETTER SEEKING WITHDRAWAL OF RECTIFICATION APPLICATION DATED 3.11.2021 EXHIBIT P20 A TRUE COPY OF THE REVENUE RECOVERY NOTICE DATED 5.10.2021