Kerala High Court
Assistant Commissioner vs Kei Industries Ltd on 18 February, 2025
Author: A.K.Jayasankaran Nambiar
Bench: A.K.Jayasankaran Nambiar
2025:KER:14001
WA NO. 9 OF 2021
1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR
&
THE HONOURABLE MR. JUSTICE EASWARAN S.
TUESDAY, THE 18TH DAY OF FEBRUARY 2025 / 29TH MAGHA, 1946
WA NO. 9 OF 2021
AGAINST THE ORDER/JUDGMENT DATED 30.10.2020 IN
WP(C) NO.23189 OF 2020 OF HIGH COURT OF KERALA
APPELLANTS/RESPONDENTS:
1 ASSISTANT COMMISSIONER
(WORKS CONTRACT), OFFICE OF THE DEPUTY
COMMISSIONER, STAGE GOODS AND SERVICES TAX
DEPARTMENT, MATTANCHERRY, KOCHI 682 002.
2 STATE OF KERALA,
REPRESENTED BY SECRETARY TO GOVERNMENT, TAXES
DEPARTMENT, GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM 695 001.
BY ADV.SRI.V.K.SHAMSUDHEEN, SR.GOVERNMENT
PLEADER
RESPONDENT/PETITIONER:
KEI INDUSTRIES LTD.,
BAVA MEMORIAL BUILDINGS, THANNIKKAL, KEERTHI
NAGAR ROAD, ELAMAKKARA, KOCHI 682 026,
REPRESENTED BY SRI. VINOD MENON, AUTHORIZED
SIGNATORY.
BY SRI.K.N.SREEKUMARAN
OTHER PRESENT:
Sr.GP SRI.V K SHAMSUDHEEN
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2
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON
18.02.2025, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
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3
JUDGMENT
Easwaran S., J.
The appeal is preferred by the State aggrieved by the judgment
dated 30.10.2020 in WP(C)No.23189/2020.
2. The brief facts for the disposal of the writ appeal are as
follows:
The petitioner/assessee approached the writ court challenging
Ext.P3 order of assessment on the ground that the same is barred by
limitation. The petitioner was served with a notice under Section
25(1) of the Kerala Value Added Tax Act, 2003, proposing the best
judgment assessment as per show cause notice dated 16.1.2020. It
is contended that by Ext.P2, though the petitioner replied to the said
show cause notice, the 1st appellant proceeded to finalise the
assessment by order dated 12.3.2020, Ext.P3, without granting
sufficient opportunity. Therefore, primarily, it was contended that
while passing the order of assessment, the principles of natural
justice were violated. It was further contended that as per Section
25(1) of the KVAT Act, the assessment for the year 2013-14 ought to
have been completed within an outer limit of five years. Reliance
was placed on the decisions of this Court in MCP Enterprises &
Others v. State of Kerala & Others [2020 (1) KHC 127] and Baiju AA
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& Others v. State Tax Officer [2020 (1) KHC 39]. The learned Single
Judge who considered the writ petition found that the period of
limitation with respect to the assessment year 2013-14 had expired
on 1.4.2019 and therefore, Ext.P1 notice dated 16.1.2020 proposing
to carry out the assessment is clearly barred by limitation.
Accordingly, the writ petition was allowed.
3. In the appeal, the State contends that the learned Single
Judge failed to notice the amendment made to the KVAT Act by
Finance Act, 2017, inserting Third Proviso to Section 25(1), whereby
the period of five years for completion of the assessment was
amended to six years and therefore, the period of assessment which
would expire on 31.3.2017 was thus extended to 31.3.2018.
4. We have heard Sri.V.K.Shamsudheen, the learned Senior
Government Pleader appearing for the appellant/State, and
Sri.K.N.Sreekumaran, the learned counsel appearing for the
respondent/writ petitioner/assessee.
5. On a consideration of the rival submissions raised across
the bar, we are of the view that the learned Single Judge erred
egregiously in allowing the writ petition on the ground that the
assessment is time-barred. While doing so, the learned Single Judge
failed to consider the impact of the amendment to the Third Proviso
to Section 25(1) inserted by the Finance Act, 2017. By the aforesaid
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amendment, the State gets an extended period of six years from the
end of the relevant assessment year for the purpose of completing
the assessment.
6. In the present case, we notice that the assessment year
is 2013-14. Once the KVAT Act was amended in the year 2017 by
extending the period of limitation for re-opening/completing the
assessment from five years to six years, the appellants were justified
in issuing Ext.P1 notice dated 16.1.2020. Thus, we find that the
notice issued on 16.1.2020 was clearly within the period of limitation.
We also note that in a similar factual situation, we had taken a similar
view in State Tax Officer v. Harit Havens (P) Ltd. [W.A.No.1295/2020
dated 6.1.2025, authored by Dr.AKJN(J).
7. Thus, taking note of the submissions of the learned
Senior Government Pleader and finding that in the instant case also
consequent to the aforesaid amendment to Section 25(1) by Finance
Act, 2017, the notice issued by the appellants to the respondent/writ
petitioner/assessee is within the period of six years that was
operative for the assessment year 2013-14, we deem it appropriate
to set aside the impugned judgment of the learned Single Judge and
allow the writ appeal by dismissing the writ petition and we do so.
8. Since we have set aside the judgment of the learned
Single Judge and dismissed the writ petition, necessarily, it is for the
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respondent/writ petitioner/assessee to approach the first appellate
authority under the KVAT Act against Ext.P3 assessment order that
was impugned in the writ petition by filing a statutory appeal. The
respondent/writ petitioner/assessee shall be at liberty to prefer an
appeal as above within a period of one month from the date of receipt
of a copy of this judgment. If an appeal is preferred within the
aforesaid period, the same shall be treated as one filed within the
time limit prescribed under the KVAT Act.
Ordered accordingly.
Sd/-
DR.A.K.JAYASANKARAN NAMBIAR,
JUDGE
Sd/-
EASWARAN S.,
JUDGE
jg
