Case Law Details
Usha Bagri Vs Assistant Commissioner (Kerala High Court)
In a recent judgment, the Kerala High Court addressed a crucial issue regarding the correction of documents submitted along with VAT returns. The case, Usha Bagri Vs Assistant Commissioner, involves a dealer in construction materials who inadvertently uploaded an incorrect stock inventory. This article delves into the background of the case, the legal arguments presented, and the court’s decision.
The petitioner, Usha Bagri, operates as a registered dealer specializing in marbles, granite, and tiles. During the submission of annual returns for the fiscal year 2014-15, she mistakenly uploaded a statement of closing stock dated 28-05-2015 instead of the required date of 31-03-2015. Upon realizing the error, Usha Bagri promptly notified the Assessing Authority and filed a request for correction.
The Assessing Authority responded with notices (Exts.P6 to P8), indicating procedural issues related to the submission under Rule 22(3)(v) of the Kerala Value Added Tax Rules, 2005. The core contention was whether the rules allowed for the correction of documents uploaded alongside VAT returns, specifically the stock inventory.
The court deliberated on Rule 22(4A), which permits dealers to revise returns in case of detected errors. However, the rule appeared silent on whether corrections could extend to documents uploaded alongside the returns. The petitioner argued for an interpretation of Rule 22(4A) that would encompass corrections to uploaded documents, highlighting the practical necessity and fairness of such an allowance.
The learned Senior Government Pleader countered, asserting that the rules did not explicitly cover corrections to documents accompanying returns under Rule 22(1).
After hearing both parties, the court interpreted Rule 22(4A) broadly to include corrections to documents like the stock inventory. The judgment emphasized the importance of fairness and practicality in tax administration, especially when errors are promptly acknowledged by the taxpayer.
Consequently, the Kerala High Court ruled in favor of Usha Bagri, directing the Assessing Authority to permit the correction of the stock inventory uploaded for the fiscal year 2014-15, as per the correct date of 31-03-2015. The decision underscored the necessity of enabling taxpayers to rectify genuine errors, provided they are promptly reported and do not prejudice tax administration.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The petitioner is a registered dealer engaged in the business of Marbles, Granite, Vitrified tiles, cemamic tiles and wall tiles etc. According to the petitioner while uploading the annual returns for the year 2014-15, the statement of closing stock as on 28-05-2015 (Ext.P2) was uploaded instead of the closing stock as on 31-03-2015. It is the case of the petitioner that on noticing the mistake the petitioner filed Ext.P1 before the Assessing Authority and requested for permission to correct the mistake. Exhibit P1 is an E-mail communication sent by the petitioner on 14-09-2015. However, the petitioner was served with Exts.P6 to P8 notices. Exhibit P6 pertains to the year 2014-15 and Exts.P7 and P8 pertain to the months of April and May of 2015. The learned counsel for the petitioner would submit that these notices are issued after the petitioner intimated the mistake committed while uploading the statement of closing stock filed in terms of the provisions contained in Rule 22 (3)(v) of the Kerala Value Added Tax Rules, 2005 (‘the 2005 Rules’). It it submitted that the 2nd respondent is taking the stand that there is no provision to enable the filing of a revised copy of stock inventory as on 31-032015.
2. The learned Senior Government Pleader would submit that though there is provision for correction of returns in terms of the provisions contained in Rule 22 of the 2005 Rules, the said Rule does not appear to cover documents required to be uploaded along with the returns in terms of sub-rule (3) of Rule 22. It is submitted that it is for the petitioner to suitably respond to Exts.P6 to P8 notices, which were, thereafter, be finalized by the respondent in accordance with the law.
Having heard the learned counsel for the petitioner and the learned Government Pleader, I am of the view that the petitioner is entitled to an order permitting him to file / upload a revised stock statement as of 31-03-2015. Sub-rule (4A) of Rule 22 of the 2005 Rules contemplate the filing of a revised return where the dealer detects any omission or mistake in the return submitted by him under sub rule (1) of Rule 22. Sub-rule (3) of Rule 22 deals with the documents that have to be uploaded by the dealer along with the return filed under sub-rule (1) of Rule 22. In the facts of the present case the mistake on the part of the petitioner was that she uploaded the stock inventory as on 28-05-2015 instead of the stock inventory as on 31-03-2015 [which is the requirement under Rule 22 (3)(v) of the 2005 Rules]. In my view the provisions of sub-rule (4A) of Rule 22 should be interpreted as permitting the dealer also to revise or correct any mistake in the documents uploaded along with returns under Rule 22 (1), as any other interpretation would mean that while the dealer is permitted to revise his return on detecting a mistake, he cannot correct a mistake in any of the documents uploaded along with the returns. In the light of the above finding, this writ petition will stand disposed of directing the 2nd respondent to permit the petitioner to correct the copy of stock inventory (closing stock) as on 31-032015 which was filed along with the annual returns submitted by the petitioner for the year 2014-15. Thereafter, the petitioner shall suitably reply to Exts.P6 to P8 notices. If the 2nd respondent is satisfied that the mistake committed by the petitioner was a genuine mistake and considering the fact that the petitioner herself had brought to the notice of the 2nd respondent that such a mistake had been committed (even prior to the issuance of Ext.P6 to P8 notices), the 2nd respondent shall drop further proceedings against the petitioner. The 2nd respondent shall take a decision in the matter as directed above after affording an opportunity of hearing to the petitioner, within a period of four months from the date of receipt of a certified copy of this judgment.
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