Kerala High Court
M/S. Associated Pipe Industries vs State Of Kerala on 9 August, 2023
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR
&
THE HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P.
WEDNESDAY, THE 9TH DAY OF AUGUST 2023 / 18TH SRAVANA, 1945
OT.REV NO. 111 OF 2022
(AGAINST THE ORDER OF THE KERALA VALUE ADDED TAX/AGRL.INCOME TAX
AND SALES TAX APPELLATE TRIBUNAL, ADDL.BENCH, THIRUVANANTHAPURAM
IN TA(VAT) NO.239 OF 2018 DATED 19.10.2022)
REVISION PETITIONER/APPELLANT/ASSESSEE:
M/S. ASSOCIATED PIPE INDUSTRIES,
ALUMMOODU, KOLLAM , REPRESENTED BY ITS MANAGING
PARTNER, A. HAMSA., PIN - 691577
BY ADVS.
SRI.HARISANKAR V. MENON
SMT.MEERA V.MENON
SRI.R.SREEJITH
SMT.K.KRISHNA
RESPONDENT/SRESPONDENT/ASSESSEE:
STATE OF KERALA
REPRESENTED BY ITS SECRETARY, TAXES DEPARTMENT
GOVT. SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695001
BY GOVERNMENT PLEADER SMT. M.M JASMINE
THIS OTHER TAX REVISION (VAT) HAVING COME UP FOR ADMISSION
ON 09.08.2023, ALONG WITH OT.Rev.1/2023, THE COURT ON THE SAME
DAY DELIVERED THE FOLLOWING:
:2:
OT.Rev.No.111 of 2022
&
OT.RevNo.1 of 2023
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR
&
THE HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P.
WEDNESDAY, THE 9TH DAY OF AUGUST 2023 / 18TH SRAVANA, 1945
OT.REV NO. 1 OF 2023
(AGAINST THE ORDER OF THE KERALA VALUE ADDED TAX/AGRL.INCOME
TAX AND SALES TAX APPELLATE TRIBUNAL, ADDL.BENCH,
THIRUVANANTHAPURAM IN TA(VAT) NO.111 OF 2017 DATED 27.07.2022)
REVISION PETITIONER/APPELLANT/ASSESSEE:
M/S. ASSOCIATED PIPE INDUSTRIES,
ALUMMOODU, KOLLAM , REPRESENTED BY ITS MANAGING
PARTNER, A. HAMSA, PIN - 691577
BY ADVS.
SRI.HARISANKAR V. MENON
SMT.MEERA V.MENON
SRI.R.SREEJITH
SMT.K.KRISHNA
RESPONDENT/RESPONDENT/ASSESSEE:
STATE OF KERALA,
REPRESENTED BY ITS SECRETARY, TAXES DEPARTMENT. GOVT.
SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695001
BY GOVERNMENT PLEADER SMT.M.M JASMINE
THIS OTHER TAX REVISION (VAT) HAVING COME UP FOR
ADMISSION ON 09.08.2023, ALONG WITH OT.Rev.111/2022, THE COURT
ON THE SAME DAY DELIVERED THE FOLLOWING:
:3:
OT.Rev.No.111 of 2022
&
OT.RevNo.1 of 2023
ORDER
Dr. A.K.Jayasankaran Nambiar, J.
As both these O.T. Revisions involve a common issue, they are
taken up for consideration together and disposed by this common
judgment. O.T. Revision No.111 of 2022 pertains to the assessment year
2013-2014 and O.T. Revision No.1 of 2023 pertains to the assessment
year 2012-2013. The short issue that arises for consideration in both
these O.T. Revisions is the legality of the orders of the Tribunal to the
extent it disallowed the claim for input tax credit in respect of the tax
paid by the petitioner on various inputs purchased locally and interstate
and used by the petitioner in the manufacture of PVC pipes that were
then sold within the State as also stock transferred to outside the State.
The case of the petitioner before the authorities was that, in respect of
the interstate purchase of raw materials/inputs used in the manufacture
of PVC pipes, it had not availed input tax credit, and the input tax credit
was claimed only in respect of the tax paid on raw-materials/inputs
purchased locally. The consequent argument of the petitioner before the
tax authorities was that inasmuch as input tax credit was availed only in
OT.Rev.No.111 of 2022
&
OT.RevNo.1 of 2023
respect of the raw materials purchased locally and the said raw
materials were entirely consumed in the manufacture of that quantity of
PVC pipes that were sold within the State, it was entitled to the entire
input tax credit claimed by it.
2. The authorities below consistently found that the petitioner
had not maintained any accounts that clearly demonstrated that the
entire input tax credit claimed pertained to the tax paid on local
purchases of raw materials/inputs that were then used in the
manufacture of that quantity of PVC pipes which were sold locally
within the State. In other words, the authorities below presumed that a
portion of the claim was hit by the provisions of the third proviso to
Section 11(3) of the Kerala Value Added Tax Act, and to that extent, the
claim for input tax credit made by the petitioner could not be allowed.
3. Before us, it is the submission of Sri. Harisankar V. Menon,
duly assisted by Smt.K. Krishna, the learned counsel for the petitioner,
that the petitioner had, in fact, produced the manufacturing, trading
profit and loss account and work sheet before the assessing authority
for the purposes of demonstrating that it had not availed input tax
credit on the raw-materials/inputs purchased from outside the State
OT.Rev.No.111 of 2022
&
OT.RevNo.1 of 2023
that were then used for the manufacture of PVC pipes which were
transferred by way of stock transfer outside the State. It is their
contention, therefore, that inasmuch as separate accounts were
maintained in respect of the two streams of supply of manufactured
PVC pipes, there was no justification in restricting credit claimed by
them in respect of the PVC pipes stock transferred outside the State.
4. Per contra, the learned Government Pleader Smt. M.M.
Jasmine would point out that the authorities below have consistently
found that the petitioner had not produced the accounts and work sheet
before the various authorities and the mere fact that the assessing
authority had extracted the contents of the reply furnished by the
petitioner to the pre-assessment notice wherein there was a mention
regarding attachment of certain documents, could not come to the aid
of the petitioner in the light of the specific finding of the authorities that
no such account books/records were produced before them.
On a consideration of the rival submissions, we are of the view
that the impugned orders of the Tribunal do not require any
intervention in these proceedings. As rightly pointed out by the learned
Government Pleader, the consistent finding of the First Appellate
OT.Rev.No.111 of 2022
&
OT.RevNo.1 of 2023
Authority and the Tribunal is that no records/accounts were produced
by the petitioner before them to substantiate the contention that no
input tax credit was availed on the tax paid on raw materials/inputs
purchased from outside the State and further that the said inputs were
used exclusively for the manufacture of that quantity of PVC pipes
which were eventually stock transferred outside the State. In the
absence of a clear bifurcation in the accounts between the two streams
of supply of PVC pipes, namely, (1) through stock transfer outside the
State and (2) through sale within the State, the authorities below
cannot be faulted for having disallowed input tax credit proportionate
to the quantity of PVC pipes that were stock transferred to outside the
State. The O.T.Revisions are therefore disposed by answering the
questions of law raised in favour of the revenue and against the
assessee.
Sd/-
Dr. A.K.JAYASANKARAN NAMBIAR
JUDGE
Sd/-
MOHAMMED NIAS C.P.
JUDGE
mns
OT.Rev.No.111 of 2022
&
OT.RevNo.1 of 2023
APPENDIX OF OT.REV 1/2023
PETITIONER ANNEXURES
Annexure A COPY OF ORDER ISSUED BY THE COMMERCIAL TAX
OFFICER, FIRST CIRCLE, KOLLAM FOR THE YEAR
2012-13 DTD. NIL
Annexure B COPY OF APPELLATE ORDER IN KVATA NO.
665/2014 ISSUED BY THE DEPUTY COMMISSIONER
(APPEALS), KOLLAM DTD. 12-01-2017
Annexure C COPY OF APPELLATE ORDER IN KVATA NO.
394/2013 ISSUED BY THE DEPUTY COMMISSIONER
(APPEALS), KOLLAM DTD. 19-02-2015
Annexure D ORIGINAL ORDER IN TA (VAT) NO. 111/2017
ISSUED BY THE VALUADDED TAX APPELLATE
TRIBUNAL, ADDL. BENCH, THIRUVANANTHAPURAM
DTD. 27-07-2022
OT.Rev.No.111 of 2022
&
OT.RevNo.1 of 2023
APPENDIX OF OT.REV 111/2022
PETITIONER ANNEXURES
Annexure A COPY OF ORDER ISSUED BY THE COMMERCIAL TAX
OFFICER, FIRST CIRCLE, KOLLAM FOR THE YEAR
2013-14 DTD. 14-08-2014
Annexure B COPY OF APPELLATE ORDER IN KVATA NO. 844/14
ISSUED BY THE DEPUTY COMMISSIONER
(APPEALS), KOLLAM DTD. 30-12-2017
Annexure C COPY OF APPELLATE ORDER IN KVATA NO. 394/13
ISSUED BY THE DEPUTY COMMISSIONER
(APPEALS), KOLLAM DTD. 19-02-2015
Annexure D ORIGINAL ORDER IN TA (VAT) NO. 239/18
ISSUED BY THE KERALA VALUE ADDED TAX/AGRL.
INCOME TAX & SALES TAX APPELLATE TRIBUNAL,
ADDL. BENCH, THIRUVANANTHAPURAM DTD. 19-10-
