Brief of the Case
Kerala High Court held In the case of Flipkart Internet (P.) Ltd. vs. State of Kerala that It is well settled that show cause notices issued by statutory authorities particularly in case of imposition of penalty on an assessee, cannot pre-determine the guilt of an assessee. The notices issued cannot confront an assessee with definite conclusions as regards the commission of an offence by him as; otherwise, it would make a mockery of the process of quasi-judicial adjudication. Also there is nothing mention in the notice as to why the revenue authorities considered the petitioner a dealer, or why the transactions in question had to be treated as local sales as against inter-state sales.
Also WS Retail, the seller responsible for effecting majority of the sales to customers in Kerala, through the online portal , is registered as a dealer under the KVAT Act and, they have filed NIL taxable turnover under the KVAT Act, on the contention that their entire sales turnover pertained to inter-state sales effected by them. No rejection of such returns was made by the authorities. Held that there is no reason left to initiate penalty proceedings to tax the turnover twice which have already taxed under CST provisions.
Facts of the Case
Writ Petition (c) no.5348
The assessee is an online service provider, registered under the Finance Act, 1994 i.e. service tax. In this case the assessee is aggrieved by orders of penalty that have been passed against it by the authorities under the Kerala value Added Tax Act (KVAT Act). The said orders have been passed under section 67 of the KVAT Act on the finding that the petitioner has breached the provisions of sections 20 and 40 of the KVAT Act as he is not getting itself registered as a dealer under the KVAT Act and further, not filing returns and maintaining true and correct accounts as mandated under the said Act.
Writ Petition (c) no.6916
The assessee is a person who actually engages in the business of sale and purchase through an online portal – myntra.com. The assessee, however, maintains that during the relevant period, it was a registered dealer under the KVAT and was paying tax in respect of the local sales and inter-state sales effected from its business premises in the state of Karnataka. It was notice that as all the sales effected to its customers in Kerala are local sales and it is on the said premise that notice of penalty was issued under the penal provisions of the KVAT Act and Rules.
Contention of the Assessee
The ld counsel of the assessee submitted following arguments:
