State Of Kerala vs Abraham K. Thomas
2024 Latest Caselaw 29722 Ker

Kerala High Court

State Of Kerala vs Abraham K. Thomas on 22 October, 2024

Author: A.K.Jayasankaran Nambiar

Bench: A.K.Jayasankaran Nambiar

OT.REV NO. 178 OF 2020         1               2024:KER:78426
OT.REV NO. 14 OF 2021
OT.REV NO. 18 OF 2021
&
OT.REV NO. 12 OF 2024

           IN THE HIGH COURT OF KERALA AT ERNAKULAM

                            PRESENT

     THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR

                               &

          THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.

  TUESDAY, THE 22ND DAY OF OCTOBER 2024 / 30TH ASWINA, 1946

                     OT.REV NO. 178 OF 2020

      AGAINST THE ORDER DATED 10.05.2019 IN TA(VAT) NO.277
OF 2017 OF THE KERALA VALUE ADDED TAX /AGRL. INCOME TAX &
SALES    TAX   APPELLATE   TRIBUNAL,   ADDITIONAL   BENCH,
THIRUVANANTHAPURAM
REVISION PETITIONER/RESPONDENT/REVENUE:

           STATE OF KERALA
           REP. BY THE JOINT COMMISSIONER OF STATE TAX (LAW),
           STATE G.S.T.DEPARTMENT, ERNAKULAM - 682 011.

           BY GOVERNMENT PLEADER SMT.RESMITHA RAMACHANDRAN
RESPONDENT/APPELLANT/ASSESSEE:

           SRI.ABRAHAM K.THOMAS
           BEGORRA INFRASTRUCTURES AND DEVELOPERS (P) LTD.,
           KARIMKUTTIYIL BUILDINGS, ANGADI P.O., RANNI,
           PATHANAMTHITTA DISTRICT, PIN - 689 674.

           BY ADVS.
           SHRI.PHILIP J.VETTICKATTU
           SMT.SAJITHA GEORGE


     THIS OTHER TAX REVISION (VAT) HAVING COME UP FOR FINAL
HEARING ON 22.10.2024, ALONG WITH OT.Rev.18/2021, 14/2021
AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
 OT.REV NO. 178 OF 2020        2                2024:KER:78426
OT.REV NO. 14 OF 2021
OT.REV NO. 18 OF 2021
&
OT.REV NO. 12 OF 2024


           IN THE HIGH COURT OF KERALA AT ERNAKULAM

                           PRESENT

     THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR

                              &

          THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.

  TUESDAY, THE 22ND DAY OF OCTOBER 2024 / 30TH ASWINA, 1946

                   OT.REV NO. 18 OF 2021
      AGAINST THE ORDER DATED 10.05.2019 IN TA(VAT) NO.278
OF 2017 OF THE KERALA VALUE ADDED TAX /AGRL. INCOME TAX &
SALES    TAX   APPELLATE   TRIBUNAL,     ADDITIONAL BENCH,
THIRUVANANTHAPURAM

REVISION PETITIONER/RESPONDENT/REVENUE:

           STATE OF KERALA
           REPRESENTED BY THE JOINT COMMISSIONER OF STATE TAX
           (LAW), STATE G.S.T. DEPARTMENT, ERNAKULAM-682 011.

           BY GOVERNMENT PLEADER SMT.RESMITHA RAMACHANDRAN
RESPONDENT/APPELLANT/ASSESSEE:

           ABRAHAM K. THOMAS
           BEGORRA INFRASTRUCTURES AND DEVELOPERS (P) LTD.,
           KARIMKUTTIYIL BUILDINGS, ANGADI P.O., RANNI,
           PATHANAMTHITTA DISTRICT, PIN-689 674.

           BY ADVS.
           SHRI.PHILIP J.VETTICKATTU
           SMT.SAJITHA GEORGE

     THIS OTHER TAX REVISION (VAT) HAVING COME UP FOR FINAL
HEARING ON 22.10.2024, ALONG WITH OT.Rev.178/2020 AND
CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
 OT.REV NO. 178 OF 2020        3                2024:KER:78426
OT.REV NO. 14 OF 2021
OT.REV NO. 18 OF 2021
&
OT.REV NO. 12 OF 2024


           IN THE HIGH COURT OF KERALA AT ERNAKULAM

                           PRESENT

     THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR

                              &

          THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.

  TUESDAY, THE 22ND DAY OF OCTOBER 2024 / 30TH ASWINA, 1946

                   OT.REV NO. 14 OF 2021
      AGAINST THE ORDER DATED 10.05.2019 IN TA(VAT) NO.279
OF 2017 OF THE KERALA VALUE ADDED TAX /AGRL. INCOME TAX &
SALES    TAX   APPELLATE   TRIBUNAL,     ADDITIONAL BENCH,
THIRUVANANTHAPURAM
REVISION PETITIONER/RESPONDENT/REVENUE:

           STATE OF KERALA
           REPRESENTED BY THE JOINT COMMISSIONER OF STATE
           TAX(LAW)STATE G.S.T.DEPARTMENT, ERNAKULAM-682011.

           BY GOVERNMENT PLEADER SMT.RESMITHA RAMACHANDRAN
RESPONDENT/APPELLANT/ASSESSEE:

           ABRAHAM K.THOMAS
           BEGORRA INFRASTRUCTURE AND DEVELOPERS(P)LTD.
           KARIMKUTTIYIL BUILDINGS,ANGADI.P.O,RANNI,
           PATHANAMTHITTA DISTRICT,PIN-689674.

           BY ADVS.
           SHRI.PHILIP J.VETTICKATTU
           SMT.SAJITHA GEORGE


     THIS OTHER TAX REVISION (VAT) HAVING COME UP FOR FINAL
HEARING ON 22.10.2024, ALONG WITH OT.Rev.178/2020 AND
CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
 OT.REV NO. 178 OF 2020             4             2024:KER:78426
OT.REV NO. 14 OF 2021
OT.REV NO. 18 OF 2021
&
OT.REV NO. 12 OF 2024


           IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                PRESENT

     THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR

                                   &

          THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.

  TUESDAY, THE 22ND DAY OF OCTOBER 2024 / 30TH ASWINA, 1946

                         OT.REV NO. 12 OF 2024

      AGAINST THE ORDER DATED 20.09.2023 IN TA(VAT) NO.32 OF
2021 OF THE KERALA VALUE ADDED TAX /AGRL. INCOME TAX & SALES
TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH, THIRUVANANTHAPURAM
REVISION PETITIONER/APPELLANT IN TA(VAT):

           STATE OF KERALA
           REP.BY THE JOINT COMMISSIONER OF STATE TAX
           (LAW),STATE G.S.T DEPARTMENT,ERNAKULAM., PIN -
           682011

           BY GOVERNMENT PLEADER SMT.RESMITHA RAMACHANDRAN


RESPONDENT/RESPONDENT IN TA(VAT):

           M/S.BEGORA INFRASTRUCTURE& DEVELOPERS(P)LTD
           ANGADI P.O, RANNI , PATHANAMTHITTA DISTRICT.,
           PIN - 689674


     THIS OTHER TAX REVISION (VAT) HAVING COME UP FOR
ADMISSION ON 22.10.2024, ALONG WITH OT.Rev.178/2020 AND
CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
 OT.REV NO. 178 OF 2020                5                     2024:KER:78426
OT.REV NO. 14 OF 2021
OT.REV NO. 18 OF 2021
&
OT.REV NO. 12 OF 2024


                                 ORDER

Dr. A.K.Jayasankaran Nambiar, J.

As all these OT Revision petitions involve a common issue

pertaining to the eligibility of the respondent assessee for the benefit of the

concessional rate of tax under Section 8(a)(ii) of the Kerala Value Added Tax

Act (hereinafter referred to as 'the KVAT Act'), 2003 in the four quarters of

2015-2016, they are taken up together for consideration and disposed by this

common judgment.

2. The brief facts necessary for the disposal of the OT Revision petitions

are as follows:-

The respondent assessee is a works contractor, who had opted to

pay tax on compounded basis in terms of Section 8(a)(ii) of the KVAT Act @

4% of the contract value. Pursuant to the returns filed by the assessee on

that basis, the assessing authority verified the accounts of the assessee for

the said year and while perusing the said accounts found that the assessee

had effected interstate purchases of goods, purportedly for incorporation into

the works contracts. Finding that this dis-entitled the assessee to claim the

concessional rate of 4% under Section 8(a)(ii) of the KVAT Act and that the

assessee was liable to pay tax at the rate of 7% in accordance with the

provisions of Section 8(a)(i) of the KVAT Act, the assessing authority OT.REV NO. 178 OF 2020 6 2024:KER:78426 OT.REV NO. 14 OF 2021 OT.REV NO. 18 OF 2021 & OT.REV NO. 12 OF 2024

completed the assessment by directing the assessee to pay tax at the rate of

7% on the contract value.

3. In an appeal preferred by the assessee the First Appellate

Authority concurred with the views of the assessing authority and dismissed

the appeal. In a further appeal before the Appellate Tribunal, however, the

assessee produced documents to show that the items imported were basically

items that had been ordered for the previous year, and which had been

supplied belatedly by the supplier. It was also pointed out before the Tribunal

that the assessee did not have a CST registration during the relevant year

and further, the supplier of the imported item had been asked to take back

the imported goods since the assessee had no use for the same as the period

of the contract for which the items were ordered had long since expired. The

Appellate Tribunal, after considering the said contentions of the assessee and

verifying the material produced to show that the imported items had since

been returned without incorporating any part of it in the works contracts

undertaken for the assessment year 2015-16, found that the conditions

required for attracting the higher rate of tax of 7% under Section 8(a)(i) of

the KVAT Act were not satisfied in the instant case. The Appellate Tribunal

therefore allowed the appeal preferred by the assessee after finding that the

assessee had proved that the goods imported were not incorporated in the

works contracts for the year 2015-16 and that the goods were actually

returned to the supplier.

OT.REV NO. 178 OF 2020 7 2024:KER:78426 OT.REV NO. 14 OF 2021 OT.REV NO. 18 OF 2021 & OT.REV NO. 12 OF 2024

4. The revenue is before us in these OT. Revision petitions

impugning the aforesaid order of the Tribunal by raising the following

questions of law: .

1.Whether the Tribunal is right in holding that the conditions under S.8(a)(i) of the KVAT Act that import of any goods into the State or Country 'for incorporation in the works contract' stands not proved?

2. Whether the Tribunal is right in finding that the respondent/appellant proved that the goods imported were not incorporated in the works contract for the year 2015-16 and the goods were returned to the supplier?

5. We have heard Smt. Resmitha Ramachandran, the learned

Government Pleader for the petitioner and Sri. Philip Vettickattu, the

learned counsel appearing for the respondent assessee.

6. On a consideration of the rival submissions, we are of the view

that while it may be a fact that in the absence of any material to suggest the

actual return of the imported goods, the revenue may have been justified in

presuming that the goods imported were in fact for incorporation in the

works contract, and in such a situation would have been justified in insisting

on the assessee discharging the tax liability @ of 7% on the contract value in

accordance with Section 8(a)(i) of the KVAT Act, we find that when the

Appellate Tribunal was satisfied on facts regarding proof of return of the OT.REV NO. 178 OF 2020 8 2024:KER:78426 OT.REV NO. 14 OF 2021 OT.REV NO. 18 OF 2021 & OT.REV NO. 12 OF 2024

imported goods without incorporation of the same in the works contracts

undertaken by the assessee for the assessment year in question, the assessee

cannot be denied the benefit of the concessional rate of tax of 4% in terms of

Section 8(a) (ii) of the KVAT Act. The pre-condition for attracting the higher

rate of tax under Section 8(a) (i) cannot be seen as attracted on the facts of

the instant case where the assessee did not hold a CST registration during

the assessment year in question, and further, had returned the imported

goods to the supplier without incorporating any part of it in the works

contracts undertaken during the said year. We, therefore, see no reason to

interfere with the impugned order of the Appellate Tribunal. These OT.

Revision petitions are thus dismissed by answering the questions of law

raised against the revenue and in favour of the assessee.

Sd/-

DR. A.K.JAYASANKARAN NAMBIAR JUDGE

Sd/-

SYAM KUMAR V.M. JUDGE

mns OT.REV NO. 178 OF 2020 9 2024:KER:78426 OT.REV NO. 14 OF 2021 OT.REV NO. 18 OF 2021 & OT.REV NO. 12 OF 2024

PETITIONER ANNEXURES

ANNEXURE A A TRUE COPY OF THE ASSESSMENT ORDER NO.32030727873/2015-16 (FIRST QUARTER) DATED 30.1.2016.

ANNEXURE B               A TRUE COPY OF     THE COMMON APPELLATE
                         ORDER IN SALES     TAX APPEAL NO.KVATA

(PTA)73/2016 AND CONNECTED CASE DATED 28.5.2017.

ANNEXURE C               A TRUE COPY OF THE COMMON ORDER OF THE
                         KERALA    VALUE   ADDED  TAX  APPELLATE
                         TRIBUNAL,    ERNAKULAM  IN   TA   (VAT)

NO.278/2017 AND CONNECTED CASES DATED 10.5.2019.

OT.REV NO. 178 OF 2020 10 2024:KER:78426 OT.REV NO. 14 OF 2021 OT.REV NO. 18 OF 2021 & OT.REV NO. 12 OF 2024

PETITIONER ANNEXURES

ANNEXURE A A TRUE COPY OF THE ASSESSMENT ORDER NO.32030727873/2015-16(SECOND QUARTER)DATED 30.01.2016.

ANNEXURE B               A TRUE COPY OF     THE COMMON APPELLATE
                         ORDER IN SALES     TAX APPEAL NO.KVATA

(PTA)74/2016 AND CONNECTED CASE DATED 28.05.2017.

ANNEXURE C               A TRUE COPY OF THE COMMON ORDER OF THE
                         KERALA   VALUE    ADDED  TAX    APPELLATE
                         TRIBUNAL,ERNAKULAM        IN         T.A.

(VAT)NO.279/2017 AND CONNECTED CASES DATED 10.05.2019.

OT.REV NO. 178 OF 2020 11 2024:KER:78426 OT.REV NO. 14 OF 2021 OT.REV NO. 18 OF 2021 & OT.REV NO. 12 OF 2024

PETITIONER ANNEXURES

Annexure A PROCEEDINGS OF THE STATE TAX OFFICER (WORKS CONTRACT),PATHANAMTHITTA ORDER NO. 32030727873/2015-16 (ANNUAL) DATED 29-11-2017

Annexure B PROCEEDINGS OF THE JOINT COMMISSIONER (APPEALS) 11,KOLLAM IN SALES TAX APPEAL NO. KVATA (PTA) NO. 06/2018 DATED 05-11-

Annexure C               CERTIFIED COPY OF THE ORDER OF THE
                         KERALA    VALUE  ADDED    TAX    APPELLATE
                         TRIBUNAL,        ADDITIONAL         BENCH,
                         THIRUVANANTHAPURAM    IN    TA(VAT)    NO.
                         32/2021 DATED 20-09-2023
 OT.REV NO. 178 OF 2020             12               2024:KER:78426
OT.REV NO. 14 OF 2021
OT.REV NO. 18 OF 2021
&
OT.REV NO. 12 OF 2024




PETITIONER ANNEXURES

ANNEXURE A               A    TRUE     COPY   OF    THE   ORDER

NO.3203072873/2015-16 DATED 31/12/2015 OF THE COMMERCIAL TAX OFFICER (WC), PATHANAMTHITTA.

ANNEXURE B A TRUE COPY OF THE APPELLATE ORDER IN SALES TAX APPEAL NO.KVATA(PTA) 65/2016 DATED 18/05/2017.

ANNEXURE C CERTIFIED COPY OF COMMON ORDER OF THE KERALA VALUE ADDED TAX/AGRL.INCOME TAX & SALES TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH, THIRUVANANTHAPURAM, IN T.A.(VAT) NO.277/2017 AND CONNECTED CASES DATED 10/05/2019.