Kerala HC Dismisses Writ Petition Against KVAT Assessment Order

Jinny Jaison Vs State Tax Officer (Kerala High Court)

Introduction: The Kerala High Court recently ruled on a significant case involving Jinny Jaison against the State Tax Officer under the KVAT Act. The petitioner, engaged in the jewellery business, contested an assessment order related to alleged discrepancies in sales and purchases during the financial year 2022-2023. Despite seeking relief through various channels, the court’s decision hinged on the availability of statutory remedies. This article provides an in-depth analysis of the judgment and its implications.

Detailed Analysis:

1. Background of the Case: Jinny Jaison, a jewellery business owner, faced scrutiny under the KVAT Act following an auction sale of gold ornaments. The assessment order issued raised concerns over unaccounted transactions, prompting the petitioner to appeal the decision.

2. Legal Proceedings:

• The petitioner pursued remedies through appeals, starting from the Deputy Commissioner to the Tribunal, seeking redressal for the assessment order’s implications.
• Simultaneously, the State Goods and Services Tax Department initiated proceedings against the seller, further complicating the matter.

3. Revised Notice and Order:

• Despite the petitioner’s efforts to address concerns raised by the assessing authority, a revised notice was issued demanding input tax on differential turnover.
• The petitioner contested this order, leading to the present writ petition challenging its validity before the Kerala High Court.

4. Court’s Ruling:

• The court acknowledged the availability of an alternative remedy under Section 55 of the KVAT Act, emphasizing the absence of jurisdictional errors or violations of natural justice principles.
• Consequently, the writ petition was dismissed, with the petitioner advised to seek recourse through the appellate authority.

FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT

The petitioner was an assessee under the provisions of Kerala Value Added Tax Act (hereinafter referred to as ‘the KVAT Act’). The petitioner has been dealing in jewellery business. During the financial year 2022-2023, as per the averments made in the writ petition, the petitioner participated in the auction sale of gold ornaments conducted by the financier M/s. Manappuram Finance Ltd. The petitioner was issued a notice under Section 25(1) of the KVAT Act, on allegation that on verification of the data available with the department certain sales and purchases were not found accounted by the petitioner. The assessment order in pursuance to the notice issued under Section 25(1) of the KVAT Act was completed on 30.07.2016 as evidenced in Ext.P1.

2. The petitioner aggrieved by the said assessment order filed an appeal before the Deputy Commissioner. The appellate authority dismissed the appeal vide order dated 15.12.2017 in Ext.P4. Aggrieved by the said dismissal of the appeal by the first appellate authority, the petitioner approached the Tribunal. The Tribunal vide order dated 25.11.2022 allowed the appeal and remanded the matter back to the assessing authority to pass fresh assessment order.

3. While the appeal was pending before the Tribunal, the intelligence wing of the State Goods and Services Tax Department initiated proceedings against the seller for suppression of turn over and non payment of tax. The seller produced the copies of the sale bills issued to the petitioner during the year 2012-2013. Petitioner was issued notice and the petitioner filed replies to the said notice issued by the intelligence wing of the State Goods and Services Tax Department.

4. After considering the replies of the petitioner to the notices issued by the assessing authority on the inputs given by the intelligence wing of the Kerala State Goods and Services Tax Department, a revised notice was issued to the petitioner on 01.08.2023. The petitioner replied to the said notice explaining the defects pointed out and requested to consider the documents issued by the State Tax Officer. However, the 2^nd respondent passed an order dated 05.12.2023, demanding input tax on the differential turn over. The said order is under challenge before this court.

5. Admittedly, there is a remedy of appeal under Section 55 of the KVAT Act before the appellate authority against the said order. This court does not find that the order suffers from jurisdictional error or violation of principle of natural justice or there is an error apparent on the face of record.

In view thereof, the writ petition is dismissed on the ground of availability of alternative remedy, leaving it open to the petitioner to approach the appellate authority, if he is so advised.