Case Law Details
Mythree Associates Vs Commercial Tax Officer (Kerala High Court)
In a recent ruling, the Kerala High Court addressed the case of Mythree Associates Vs Commercial Tax Officer concerning the denial of input tax credit under the Kerala Value Added Tax Act, 2003 (KVAT Act). The petitioner, a registered dealer engaged in scrap material trade, purchased materials from the Travancore Devaswom Board during a specified period. Despite the Board collecting taxes and remitting them to the State Exchequer, the petitioner was denied credit because the Board was not registered under the KVAT Act. The court acknowledged the tax remittance by the Board and deemed the denial unjust, directing the Commissioner under the KVAT Act to ensure credit for taxes paid by the petitioner.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The petitioner is a registered dealer under the Kerala Value Added Tax Act, 2003 (hereinafter referred to as the ‘KVAT Act’). The business of the petitioner involves the purchase and sale of scrap materials. During the period from 20-09-2013 to 30-01-2014, the petitioner purchased certain scrap materials from the Travancore Devaswom Board. It is the case of the petitioner that the Board had sold these scrap materials after obtaining permission from this Court in DBA No.54/2012 and had also collected 5% as tax under the KVAT Act on the amounts remitted by the petitioner towards the auction amount. The petitioner’s claim is that since the Travancore Devaswom Board was not a registered dealer, the credit of the amounts paid by the petitioner as tax has not been given to him while completing the assessment for the year 2013-2014.
2. It is not disputed before me that the amount of tax collected from the petitioner has been remitted to the State Exchequer by the Travancore Devaswom Board. It is clear from a reading of Ext.P4 modified order of assessment that the denial of credit to the petitioner was on the basis that the Travancore Devaswom Board was not a registered dealer and therefore the petitioner is not entitled to input tax credit under Section 11 of the KVAT Act.
3. Having heard the learned Senior Counsel appearing for the petitioner, learned Government Pleader appearing for the 1st respondent and the learned Standing Counsel appearing for respondent Nos.2 and 3, I am of the opinion that this is a fit case where the competent authority, who exercises powers of the Commissioner under the KVAT Act, must exercise jurisdiction under Section 3 of the KVAT Act so as to ensure that the credit of the amount of tax paid by the petitioner, which has admittedly been received to the credit of the State Exchequer, is extended to the petitioner. Since it is admitted that the petitioner has paid tax at the prescribed rate on the materials procured by him from the Travancore Devaswom Board and since this amount has already been paid over to the State Exchequer, any denial of credit to the petitioner solely on the ground that the Travancore Devaswom Board/ Thiruvabharanam Commissioner was not registered under the KVAT Act would be unjust. Moreover, the definition of ‘casual trader’ under Section 2(xi) of the KVAT Act will also indicate that the Travancore Devaswom Board may not even fall within the definition of a casual trader for the purposes of the KVAT Act. The provisions of Section 3(2)(c) of the KVAT Act indicate that the Commissioner shall have superintendence over all officers and persons employed in the execution of the Act and the Commissioner may issue such orders, instructions and directions to such officers and persons as he may deem fit, for the proper administration of this Act.
4. Therefore, this writ petition will stand disposed of directing that if the petitioner makes a suitable representation before the officer presently exercising the jurisdiction of Commissioner under the provisions of the KVAT Act, the said officer shall, having regard to the observations contained in this judgment, pass necessary orders giving instructions to the appropriate officer to provide credit of the amount paid by the petitioner as tax on the purchase of materials from the Travancore Devaswom Board to the extent such tax has been credited to the State Exchequer.
Writ petition is disposed of as above.
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