Case Law Details
N.R. Patel & Co. Vs Assistant Commissioner (Kerala High Court)
The case of N.R. Patel & Co. versus the Assistant Commissioner before the Kerala High Court revolves around the assessment and refund orders issued under the Kerala Value Added Tax Act, 2003 (KVAT Act). The petitioner, a registered dealer engaged in contract execution for Bharat Petroleum Company Ltd., sought a refund for the years 2008-09 to 2011-12. The assessment orders for these years resulted in an excess payment, which was carried forward to subsequent years. Subsequently, the petitioner filed a representation for refund, followed by a writ petition seeking a directive for refund sanction along with interest.
During the pendency of the writ petition, notices under the KVAT Act were served on the petitioner for assessment purposes. Despite these notices, the petitioner did not respond or produce required documents. Consequently, an ex-parte assessment order was passed for the year 2012-13, adjusting the excess payment from previous years. Subsequently, a rectified assessment order was issued for the same year, creating a demand for payment.
Upon identifying irregularities in the assessment for the year 2011-12, the Deputy Commissioner proposed cancellation of the assessment order. A rectified assessment order was then passed, creating a substantial demand. The petitioner filed a writ petition and a contempt case, which were disposed of with the observation that further grievances could be addressed through appropriate proceedings.
In response, the petitioner filed an appeal against the revised assessment order. The appellate authority modified the order and granted a refund. However, subsequent errors in interest calculation led to further adjustments and a reduced refund amount. The petitioner challenged this through a writ petition.
The High Court dismissed the writ petition, emphasizing that it is not an appellate authority under the KVAT Act to scrutinize the merit of assessment or refund orders. Instead, the appropriate remedy for the petitioner would be to appeal to the authority designated under the statute itself. Therefore, the court rejected the petition, highlighting that factual disputes should be resolved through the statutory appeal process rather than invoking public law remedies.
In conclusion, the judgment underscores the principle that disputes regarding assessment and refunds should be addressed through statutory channels, and the court’s role is limited to examining questions of law rather than factual disputes in tax matters.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The petitioner is a registered dealer under the provisions of the Kerala Value Added Tax Act, 2003, and is engaged in execution of contract awarded by the Bharat Petroleum Company Ltd. The assessment for the years from 2008 – 2009 to 2011-2012 were completed and the amount found to be paid in excess for the years 2008-2009 to 2010-2011 were carry forwarded to the year 2011-2012. An amount of Rs. 20,11,109/- was found to have been paid in excess as per the order dated 22.08.2014 for the assessment year 2011-12. The assessee has filed a representation dated 13.01.2015 before the assessing authority for refund of the said amount and thereafter, a writ petition was filed before this Court, W.P(C.) No.7071/2015 seeking a direction to sanction refund amount with interest. This Court vide judgment dated 31.03.2015, disposed of the said writ petition, with direction to the assessing authority to consider and pass orders on the representation of the petitioner dated 13.01.2015 within a period of two months from the date of the order, this Court also directed the 1st respondent to compute the total refund amount due to the petitioner with upto-date interest as provided under Section 89 of the KVAT Act.
2. During the pendency of the said writ petition, a notice dated 09.04.20 15, under Section 25 of the KVAT Act, was served on the petitioner company, proposing the complete assessment for the assessment year 20 12- 2013. A notice under Section 95 was also issued on 26.06.2015. Even though the notices were served on the petitioner, no response came from the petitioner to these notices. Later on some other turnover, suppression was noticed and revised notice dated 29.07.2015 was issued to the petitioner. Despite the direction issued by the High Court, the petitioner neither filed a reply nor produced the books of account in pursuance to the notices issued to the petitioner. The petitioner also did not file annual returns of statements before the assessing authority.
3. As the petitioner did not produce the documents and not filed reply to the notice, an exparte order of the assessment for the year 2012-2013 was passed, in which it was held that an amount of Rs.19,47,790/- was found due after adjusting the refund amount of Rs.23,52,998/- for the year 2011-2012. Since the amount to be refunded for the year 2011-2012 with interest was given credit for the year 2012-2013, the direction of the High Court in its judgment dated 31.03.2015 was complied with in respect of the assessment year 2011-2012. Later on, it was found that some mistake in calculating the interest on refund had occurred for the assessment year 2011-12 and therefore, the order for the assessment year 2012-13 was rectified by which an amount of Rs.21,51,887/- was given credit and balance amount of Rs.22,18,689/- was found due for the year 2012-13 as per the rectified order dated 16.10.20 15.
4. In the meantime, Deputy Commissioner Thiruvananthapuram suo-motu proposed the cancellation of the assessment order for the year 2011- 12 on finding certain irregularities in the assessment Thereafter, the assessment order was completed and the rectified assessment order was passed on 25.11.2016 creating a demand of Rs.65,79,113/- and cess of Rs.65,611/-.
5. The petitioner thereafter filed W.P(C) 31926/2016 and Contempt Case No.67/2016 which were disposed of as per Ext.P12 judgment. On consideration of the affidavit filed on behalf of the alleged contemnor, the contempt and writ petitions were closed by the judgment dated 18.07.20 18 with the observation “If at all the petitioner has any further grievance regarding the computation of interest or the manner in which the adjustments have been made, it would always be open for the petitioner to challenge the same in appropriate proceedings”.
6. In view of the aforesaid observation made by this Court in its judgment dated 18.07.2018, the petitioner filed appeal against the revised assessment order. The appellate authority has modified the assessment order vide order dated 20.06.2022 for the Assessment year 2011-12 by Ext.P15 and P16 separate orders. Subsequently, the refund has been ordered as Ext.P17 granting an amount of Rs.90,29,252/-. On further verification, it came to light that there was some error in the calculation of the interest portion. Hence, Ext.P18 notice was issued under Section 56 on 29.07.2023. After hearing the petitioner, a fresh order on Ext.P20 was issued on 21.01.2023 directing the assessing authority to re-work the interest applicable as per the Statute. Subsequently, after issuing Ext.P21 notice and considering the aforesaid reply filed by the petitioner in Ext.P23 order dated 04.09.2023 was issued and an order of refund was limited to Rs.49,96,500/-.
7. If the petitioner is aggrieved by the said order, the remedy lies elsewhere under the Statute itself. This Court cannot enter into the factual dispute as it is for the petitioner to approach the Appellate Authority against the said order if he is not satisfied with the order passed for refund in the impugned order. This court is not an appellate authority under the provisions of the KGST Act to examine the merit of the assessment/refund order. The appropriate remedy would be to approach the authority under the Statute itself and not invoke the public law remedy by filing the writ petition.
Thus, I find no substance in this writ petition which is hereby dismissed. If the petitioner files the appeal, the time consumed in prosecuting the writ petition shall be taken into consideration while considering the application for condoning the delay.
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