K.G.L Bhat And Sons vs State Of Kerala
2024 Latest Caselaw 32278 Ker

Kerala High Court

K.G.L Bhat And Sons vs State Of Kerala on 8 November, 2024

Author: A.K.Jayasankaran Nambiar

Bench: A.K.Jayasankaran Nambiar

                                                    2024:KER:83331
            IN THE HIGH COURT OF KERALA AT ERNAKULAM

                             PRESENT

      THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR

                                 &

            THE HONOURABLE MR.JUSTICE K. V. JAYAKUMAR

     FRIDAY, THE 8TH DAY OF NOVEMBER 2024 / 17TH KARTHIKA, 1946

                       OT.REV NO. 29 OF 2021

       AGAINST THE ORDER DATED 17.08.2020 IN TA(VAT) NO.538 OF 2019

 OF KERALA VALUE ADDED TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH,

                            KOZHIKODE


REVISION PETITIONER/APPELLANT:

          K.G.L BHAT AND SONS, BANK ROAD,
          KASARAGOD, KERALA-671123,
          REPRESENTED BY ITS AUTHORISED REPRESENTATIVE
          K.MURALIDHAR BHAT, MANAGING PARTNER.


          BY ADVS.
          JOSE JACOB
          SHRI.JAZIL DEV FERDINANTO
          SRI.M.RISHIKESH SHENOY


RESPONDENT/RESPONDENT:

          STATE OF KERALA
          REPRESENTED BY THE SECRETARY,
          TAXES (A) DEPARTMENT,
          GOVT. OF KERALA, SECRETARIAT, TRIVANDRUM-695001.


          SRI V K SHAMSUDHEEN, SR GP


     THIS OTHER TAX REVISION (VAT) HAVING BEEN FINALLY HEARD ON

08.11.2024, ALONG WITH OT.Rev.31/2021, THE COURT ON THE SAME DAY

DELIVERED THE FOLLOWING:
 O.T.Rev.Nos.29 and 31 of 2021
                                      2

                                                      2024:KER:83331

               IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                  PRESENT

        THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR

                                     &

              THE HONOURABLE MR.JUSTICE K. V. JAYAKUMAR

      FRIDAY, THE 8TH DAY OF NOVEMBER 2024 / 17TH KARTHIKA, 1946

                            OT.REV NO. 31 OF 2021

           AGAINST THE ORDER/JUDGMENT DATED 17.08.2020 IN TA(VAT)

    NO.538 OF 2019 OF KERALA VALUE ADDED TAX APPELLATE TRIBUNAL,

                      ADDITIONAL BENCH, KOZHIKODE


REVISION PETITIONER/APPELLANT:

             K.G.L BHAT AND SONS
             BANK ROAD, KASARAGOD, KERALA - 671123,
             REPRESENTED BY ITS AUTHORISED REPRESENTATIVE
             K. MURALIDHAR BHAT, MANAGING PARTNER.

             BY ADVS.
             JOSE JACOB
             SHRI.JAZIL DEV FERDINANTO
             SRI.M.RISHIKESH SHENOY


RESPONDENT/RESPONDENT:

             STATE OF KERALA
             REPRESENTED BY THE SECRETARY,
             TAXES (A) DEPARTMENT,
             GOVT. OF KERALA, SECRETARIAT, TRIVANDRUM - 695001.

             SRI V K SHAMSUDHEEN, SR GP


       THIS OTHER TAX REVISION (VAT) HAVING COME UP FOR ADMISSION

ON 08.11.2024, ALONG WITH OT.Rev.29/2021, THE COURT ON THE SAME DAY

DELIVERED THE FOLLOWING:
 O.T.Rev.Nos.29 and 31 of 2021
                                      3

                                                           2024:KER:83331

                                                                       'CR'

               DR. A. K. JAYASANKARAN NAMBIAR, J.
                                  &
                        K. V. JAYAKUMAR, J.
                         -------------------------------
                    O.T.Rev Nos.29 and 31 of 2021
                      -----------------------------------
               Dated this the 8th day of November, 2024

                                  ORDER

Dr. A.K. Jayasankaran Nambiar, J.

As both these Revision Petitions impugn a common order of the

Kerala Value Added Tax Appellate Tribunal, Additional Bench, Kozhikode,

they are taken up together for consideration and disposed by this common

order.

2. The brief facts necessary for disposal of the OT

Revisions are as follows:

The petitioner/assessee is a partnership firm that was engaged in

the trading of hill produce during the assessment years 2012-13 and 2014-

15. The CST assessments were completed by the assessing authority by

granting the assessee the benefit of concessional rate of tax of 2% in respect

of interstate sales effected by them and by accepting the declaration in O.T.Rev.Nos.29 and 31 of 2021

2024:KER:83331 Form-C filed by the petitioner before the assessing authority.

3. About four years later, the revisional authority issued a

notice under Section 56 of the Kerala Value Added Tax Act r/w 8(1) of the

Central Sales Tax Act proposing a cancellation of the assessment order on

the ground that investigation conducted by the department had revealed that

the C-Forms produced by the petitioner before the assessing authority were

bogus. In the proceedings that followed, the proposal communicated to the

petitioner was confirmed and the assessment order modified by disallowing

the concessional rate of tax to the petitioner on the ground that no valid

C-Forms had been produced by the petitioner before the assessing authority.

4. It was aggrieved by the order of the revision authority

that the petitioner preferred appeals before the Appellate Tribunal. In the

meanwhile, the petitioner had also sought information under the RTI Act

from the assessing authorities of the respective buyers in other States,

regarding the genuineness of the C-Forms received from those buyers. In

response of the RTI query, the petitioner was served with a reply enclosing

copies of the C-Forms stated to have been issued from the various assessing O.T.Rev.Nos.29 and 31 of 2021

2024:KER:83331 authorities of the buyers concerned outside the State. At the time of hearing

before the Tribunal, therefore, the petitioner produced the reply received

from the RTI Commissioner, along with the C-Forms annexed thereto, that

bore the signature and seal of the respective issuing officers/assessing

authorities of the buyers concerned. The petitioner also produced

translations of the said C-Forms bwfore the Tribunal since the C Forms

were all in Hindi. The Appellate Tribunal, on a perusal of the said

documents, opined that they could not be relied on since they did not bear

the signature of the issuing authority or the seal of the office from where

they were supposedly issued. Based on the said finding, the Appellate

Tribunal proceeded to dismiss the appeals preferred by the petitioner. It is

against the said order of the Appellate Tribunal that the petitioner has

approached this Court through the OT revisions above raising the following

questions of law.

1) Whether under the facts and circumstances of the case, the Hon'ble Tribunal was correct in confirming the differential CST demand for the AY 2012-13 without considering RTI responses received by the Petitioner confirming the genuineness of the Forms furnished by the Petitioner?

O.T.Rev.Nos.29 and 31 of 2021

2024:KER:83331

2) Whether under the facts and circumstances of the case, the Hon'ble Tribunal was correct in holding that the forms were not genuine when the only allegation put forward by the lower authorities was that the forms are not reflecting in TXNSYS which was not a condition prescribed in the statute or the rules?

3) Whether under the facts and circumstances of the case, the Hon'ble Tribunal was correct in upholding the orders passed by the lower authorities exercising powers under the KVAT Act which stood repealed at the time of exercising the powers by the lower authorities?

4) Whether under the facts and circumstances of the case, the Hon'ble Tribunal was correct in upholding the orders passed by the lower authorities when the assessment order was clearly time barred?

5. We have heard Sri.Jose Jacob, learned counsel for the

petitioner and Sri.V.K.Shamsudheen, learned Government Pleader for the

respondent State.

6. On a consideration of the facts and circumstances and

the submission made across the Bar, we find that the reasons cited by the

revenue, for cancelling the original assessment order that allowed the

concessional rate of tax of 2% against C-Forms, was their finding on O.T.Rev.Nos.29 and 31 of 2021

2024:KER:83331 investigation that the C-Forms produced by the petitioner assessee were

bogus. However, the petitioner assessee had, in response to a RTI query,

obtained certificates from the assessing authorities concerned having

jurisdiction over the purchasers in the other States, that the C-Forms were

genuine and had actually been issued to the petitioner. The reply received

in response to the RTI query, together with the C-Forms that bore the

signatures and seals of the issuing authority in the other States, were

produced before the Appellate Tribunal along with the translations thereto.

We have also perused the copies of the C-Forms that were produced before

the Appellate Tribunal, which have also been produced along with the OT

revisions. We note that while the signature and seal of the issuing authority

in the other States is clear in the Hindi version, the seal and signature cannot

be seen in the translated version in English. We have reason to believe that

it was probably by referring to the translated version that the Tribunal came

to the finding that the C-Forms produced were not duly authenticated.

Inasmuch as we find that the C-Forms produced by the petitioner before the

Tribunal were actually duly authenticated as borne out from the Hindi

version, we have to find that the original assumption by the revenue that the

C-Forms produced by the petitioner before the assessing authority were O.T.Rev.Nos.29 and 31 of 2021

2024:KER:83331 bogus cannot be legally sustained. Since the very basis for the cancellation

of the assessment originally done on the assessee has been dis-lodged

through the production of the copies of the C-Forms issued, we cannot

sustain the impugned order of the Appellate Tribunal.

Resultantly, we set aside the impugned order of the Appellate

Tribunal and restore the original assessment order pertaining to the assessee

under the CST Act for the assessment years 2012-13 and 2014-15

respectively. The questions of law raised in the OT Revisions are answered

in favour of the assessee and against the revenue.

Sd/-

DR. A. K. JAYASANKARAN NAMBIAR JUDGE

Sd/-

K. V. JAYAKUMAR JUDGE Sbna/08.11.24 O.T.Rev.Nos.29 and 31 of 2021

2024:KER:83331

PETITIONER ANNEXURES

ANNEXURE A1 TRUE COPY OF THE ORDER 03.02.2016.

ANNEXURE A2 TRUE COPY OF THE ORDER DATED 05.03.2018.

ANNEXURE A3 TRUE COPY OF THE NOTICE DATED 09.05.2018.

ANNEXURE A4 TRUE COPY OF THE ORDER DATED 14.02.2019.

ANNEXURE A5 TRUE COPY OF THE APPELLATE ORDER NO.VATA 38/2019 DATED 26.08.2019.

ANNEXURE A6 TRUE COPY OF THE APPEAL FILED BEFORE THE HON'BLE TRIBUNAL.

ANNEXURE A7 TRUE COPY OF RESPONSES RECEIVED IN RELATION TO THE RTI APPLICATIONS FILED WITH THE ASSESSING AUTHORITIES OF THE CONCERNED BUYERS ALONG WITH TRANSLATED COPIES.

ANNEXURE A8 TRUE COPY OF THE ORDER DATED 17.08.2020.

ANNEXURE A9 TRUE COPY OF THE WRIT PETITION DATED 15.12.2020.

ANNEXURE A10 TRUE COPY OF THE JUDGMENT DATED 18.12.2020.

ANNEXURE A11 TRUE COPY OF THE WRIT APPEAL DATED 19.01.2021.

ANNEXURE A12 TRUE COPY OF THE JUDGMENT DATED 11.02.2021.

ANNEXURE A13 TRUE COPY OF FORM C SUBMITTED BY THE PETITIONER RELATING TO AY 2014-15.

O.T.Rev.Nos.29 and 31 of 2021

2024:KER:83331

PETITIONER ANNEXURES

ANNEXURE A1 TRUE COPY OF THE ORDER DATED 15.3.2014.

ANNEXURE A2 TRUE COPY OF THE ORDER DATED 5.3.2018.

ANNEXURE A3 TRUE COPY OF THE NOTICE DATED 9.5.2018.

ANNEXURE A4 TRUE COPY OF THE ORDER DATED 14.2.2019.

ANNEXURE A5 TRUE COPY OF THE APPELLATE ORDER NO.VATA 37/2019 DATED 26.8.2019.

ANNEXURE A6 TRUE COPY OF THE APPEAL FILED BEFORE THE HON'BLE TRIBUNAL.

ANNEXURE A7 TRUE COPY OF RESPONSES RECEIVED IN RELATION TO THE RTI APPLICATIONS FILED WITH THE ASSESSING AUTHORITIES OF THE CONCERNED BUYERS ALONG WITH TRANSLATED COPIES.

ANNEXURE A8 TRUE COPY OF THE ORDER DATED 17.8.2020.

ANNEXURE A9 TRUE COPY OF THE WRIT PETITION DATED 15.12.2020.

ANNEXURE A10 TRUE COPY OF THE JUDGMENT DATED 18.12.2020.

ANNEXURE A11 TRUE COPY OF THE WRIT APPEAL DATED 19.1.2021.

ANNEXURE A12 TRUE COPY OF THE JUDGMENT DATED 11.2.2021.

ANNEXURE A13 TRUE COPY OF FORM C SUBMITTED BY THE PETITIONER RELATING TO AY 2012-13.