Case Law Details
Commercial Tax Officer Vs. M/s. MIilona Ice Cream Private Limited (Kerala High Court)
Assessing Officer issued a notice to the assessee threatening cancellation of the compounding and regular assessment. The notice was on the ground that there could be no compounding applied for, for ice-creams which is not a cooked food. Regular assessment was completed for the year as seen from Exhibit P16 produced in W.P.(C)No. 12649 of 2017.
At the first instance a compounding application was not responded to and after three quarters a notice was issued threatening cancellation. In the very next year the assessee again applied for compounding and the Assessing Officer sat over it without finalizing the earlier notice for cancellation and without rejecting the application for that subsequent year and even permitting remittance of quarterly tax under the scheme. The learned Special Government Pleader (Taxes), who argued the appeals on behalf of the State would point out that there were two Officers in the two assessment years. We are not convinced that this would be an explanation for the laches of the Officers in not having looked at the applications in time. In any event we are more concerned with the merits of the matter. The lethargy of the department, however, cannot absolve the assessee from the natural consequences flowing from the Act.
When “ice- cream” “cooked food” and “food” are separately included in the schedules and notifications prescribing the rates of taxation, we cannot understand the legislature having an intention to include all cooked foods, in common parlance, under the compounding scheme.
When ice-cream is treated as a separate commodity included in the notified goods taxable at 14.5% there could not have been a compounding application filed by the petitioner, taking ice-creams to be coming within the definition of cooked-food. Even if an order permitting such compounding was passed, it could have been suo motu revised under Section 56 of the KVAT Act. The limitation for such revision is also not crossed. In such circumstances, the assessee cannot claim that the contract entered into between the Department and the assessee is now concluded and none can resile from it. The order permitting compounding, is revisable under Section 56, in circumstances where the compounding scheme itself is not applicable to the dealer and the order was issued erroneously. This will not amount to resiling from the contract, but would be a permissible exercise for reason of prejudice occasioned to the Revenue. Ice-cream, as is seen from KVAT Act, is treated differently from cooked food and is taxable at a higher rate and included in the notified goods. There could not have been an application for compounding filed and in such circumstances, we are of the opinion that the learned Single Judge ought not to have set aside the assessment.
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