No liability on Flipkart under KVAT as no clear finding to held sale as Interstate sale which already taxed under CST Act: HC

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

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