M/S.Karickal Hardwares, Vyttila vs The Commercial Tax Officer
2023 Latest Caselaw 9043 Ker

               IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                PRESENT
            THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH
        WEDNESDAY, THE 23RD DAY OF AUGUST 2023 / 1ST BHADRA, 1945
                         WP(C) NO. 39356 OF 2016
PETITIONER/S:
           M/S.KARICKAL HARDWARES, VYTTILA, 29/1388, PREETHI BUILDING,
           VYTTILA, KOCHI.19, REPRESENTED BY PARTNER SAJEEV K.P.

            BY ADV SRI.P.N. DAMODARAN NAMBOODIRI


RESPONDENT/S:
    1    THE COMMERCIAL TAX OFFICER DEPARTMENT OF COMMERCIAL
         TAXES, KVAT CIRCLE-II, TRIPUNITHURA-682019.

    2      THE DEPUTY COMMISSIONERCOMMERCIAL TAXES, THEVARA,
           ERNAKULAM.682015.

    3      THE STATE OF KERALA, REPRESENTED BY THE SECRETARY TO
           GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT,
           THIRUVANANTHAPRUAM.695001.


OTHER PRESENT:
          RESHMITA RAMACHANDRAN-GP


        THIS WRIT PETITION (CIVIL) HAVING COME UP FOR HEARING ON
23.08.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 W.P.(C) No.39356/2016
                                      -2-




                          JUDGMENT

The present writ petition under Article 226 of the

Constitution of India has been filed impugning Ext.P6 order

dated 26.09.2016 for the return period 2010-11.

2. The petitioner is an assessee under the provisions of

the Kerala Value Added Tax Act 2003 (for short, 'KVAT

Act'). During the year 2010-11, the assessee filed an annual

return declaring a sales turnover of Rs.4,18,12,918/-. On

scrutiny of the monthly return filed by the dealer, suppression

of sales and purchases was noticed. An audit visit was

conducted in the business premises of the petitioner on

29.10.2010, and the audited books of accounts up to September

2010 were verified. On verification, defects were noticed, and

therefore, monthly assessments up to September 2010 were

completed with a turnover addition of Rs.63,13,625/-. W.P.(C) No.39356/2016

2.1 Again, on 04.11.2010, the Intelligence Officer, Squad

No.VI inspected the business premises of the petitioner. The

dealer produced some books of accounts before the

Intelligence Squad on 18.01.2016. After detailed verification

of the books of accounts, the squad found a stock difference of

Rs.11,19,278/- taxable @ 12.5%. The squad also found that an

amount of Rs.1,41,200/-with a rate of tax @ 12.5% was not

accounted. Therefore, a total suppression of Rs.13,31,478/-

with a tax effect of Rs.1,68,100/- was detected by the

Intelligence Squad. The dealer admitted the same and prayed

for the composition of the offence and the same was

allowed. Rs.1,70,000/- was collected and the file was

forwarded to the 1st respondent for the assessment under

Section 25(1) of the KVAT Act.

2.3 Before the last date for completion of the

assessment i.e., 31.03.2016, the time was extended under

Section 25B of the KVAT Act by the Deputy Commissioner, W.P.(C) No.39356/2016

Ernakulam vide Order dated 18.03.2016. A notice under

Section 25(1) of the KVAT Act was issued to the petitioner

thereafter on 16.08.2016. The petitioner was afforded an

opportunity for a personal hearing on 30.08.2016.

2.4 The petitioner on 05.09.2016 requested three weeks

more time as some more details had to be collected. The

petitioner filed a reply on 20.09.2016. The Assessing Authority

noticed that there had been a pattern of suppression. On

verification of the documents and reply submitted by the

petitioner, the impugned order Ext.P6 was passed completing

the assessment on 26.09.2016.

3. The only ground that has been taken in the writ

petition is that the assessment proceedings are beyond 5 years

of limitation. Section 25B of the Act authorises the Deputy

Commissioner to extend the time for completion of

assessment by one year. Section 25B reads as under: W.P.(C) No.39356/2016

25 B. Extension of period of limitation for assessments in certain cases:- Notwithstanding anything contained in section 24 or in section 25, in cases where an investigation or inquiry is pending under this Act of any other law or where any assessment cannot be completed within the period specified under the said sections, the Deputy Commissioner may, for good and sufficient reasons, extend the period of completion of the assessment beyond the period specified in those sections.

3.1 The Deputy Commissioner exercising power under

Section 25B and considering the facts of the case where there

has been a pattern of attempts to evade the tax, passed the

order on 18.03.2016 extending the time for completion of

assessment by one year. I do not find that the order passed by

the Deputy Commissioner dated 18.03.2016 suffers from any

illegality. Therefore, the assessment order in pursuance of the

notice issued to the petitioner on 16.08.2016 does not require

interference in the exercise of the writ jurisdiction under

Article 226 of the Constitution of India, inasmuch as the

assessment proceedings had been completed within the W.P.(C) No.39356/2016

extended time of one year under Section 25B of the KVAT Act

2003.

4. I do not find any substance in the submission of the

learned Counsel for the petitioner that the power under

Section 25B could have been exercised only in cases in which

assessment proceedings were complete. In the present case,

the assessment proceedings were pending, as noted

above. There is no ground to interfere in the present writ

petition or the impugned order.

Therefore, the writ petition is devoid of merit and hereby

dismissed.

Sd/-

DINESH KUMAR SINGH JUDGE

jjj W.P.(C) No.39356/2016

APPENDIX OF WP(C) 39356/2016 PETITIONER EXHIBITS

EXHIBIT P1 TRUE COPY FO THE ANNUAL RETURN DATED 19.7.2011 FOR THE YEAR 2010-11 SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT.

EXHIBIT P2 TRUE COPY FO THE AUDIT REPORT IN FORM 13 & 13 A DATED 22.3.2013 FOR THE YEAR 2010-11 SUBMITTED BY THE PETITIONER.

EXHIBIT P3 TRUE COPY OF THE ORDER NO.C-9-1037/16(14) DATED 18.3.2016 FOR THE YEAR 2010-11 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER.

EXHIBIT P4 TRUE COPY OF THE NOTICE ISSUED UNDER SECTION 25(1) OF KERALA VALUE ADDED TAX ACT, NO.32071180612/2010-11 DATED 16.8.2016 BY THE 1T RESPONDENT TO THE PETITIONER.

EXHIBIT P5 TRUE COPY OF THE REPLY DATED 20.9.2016 SUBMITTED BY THE PETITIONER TO THE 1ST RESPODNENT.

EXHIBIT P6 TRUE COPY OF THE ASSESSMENT ORDER NO.32071180612/2010-11 DATED 26.9.2016 U/S 25(1) OF KVAT ACT, FOR THE YEAR 2010-11 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER.