Case Law Details
Nivz Imports & Exports A Ltd Vs Deputy Commissioner of State Tax (Kerala High Court)
In a recent ruling Hon’ble Kerala HC have held that refund due to the petitioner for the year 2016-17 could not have been adjusted against the demand for 2015-16 when there was a stay on account of the provisions contained in Section 60 (1A) of the KVAT Act.
The petitioner was a registered dealer under the Kerala Value Added Tax Act, 2003. It is the grievance of the petitioner that a refund due for the year 2016-17 has been adjusted against a demand for the AY 2015-16. It is legally sustainable in the eye of the law as 2nd appeal against demand for AY 2015-16 is pending before Kerala Value Added Tax Tribunal. It is pointed out that the petitioner had already remitted 10% of the demand and going by the provisions of Section 60(1A) of the KVAT Act (as amended with effect from 01.04.2023), there is an automatic stay of recovery of the balance on deposit of 10% of the tax amount.
It was argued on behalf of tax department that the fact of filing of the appeal and the deposit of 10% was not made known to the Assessing Authority, as a result of which the refund due to the petitioner for the year 2016-17 was adjusted against the demand for 2015-16.
On the other hand, it was argued by petitioner that even after adjustment of the amount, respondents are demanding interest in respect to the amount payable for the AY 2015-16 without giving any interest on the refund amount to the petitioner. It is purely illegal as demand stands stayed on deposit of 10% at the time of filing the appeal before the Tribunal.
After considering the submissions from both sides Hon’ble HC disposed the writ petition with direction that the demand for interest shall be kept in abeyance till the matter is finally decided by the Appellate Tribunal. Technically, the refund due for the year 2016-17 could not have been adjusted against the demand for AY 2015-16 when there was a stay on account of the provisions contained in Section 60 (1A) of the KVAT Act.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The petitioner was a registered dealer under the Kerala Value Added Tax Act, 2003 (the ‘KVAT Act’). The petitioner has approached this Court being aggrieved by the fact that a refund due to the petitioner for the year 2016-17 (under the KVAT Act) as per Ext.P3 order has been adjusted against a demand under the KVAT Act for the assessment year 2015-16 at a time when a 2nd appeal is pending before the Kerala Value Added Tax Appellate Tribunal in respect of such demand. It is pointed out that the petitioner had already remitted 10% of the demand and going by the provisions of Section 60(1A) of the KVAT Act (as amended with effect from 01.04.2023), there is an automatic stay of recovery of the balance on deposit of 10% of the tax amount.
2. The learned Government Pleader submits that the fact of filing of the appeal and the deposit of 10% was not made known to the Assessing Authority, as a result of which the refund due to the petitioner for the year 2016-17 was adjusted against the demand for 2015-16.
3. The learned counsel appearing for the petitioner would submit that even after adjustment of the amount and without giving any interest on the refund amount to the petitioner, the respondents are demanding interest in respect of the amount payable for the year 2015-16. It is submitted that this is clearly illegal considering the fact that the demand stands stayed on deposit of 10% at the time of filing the appeal before the Tribunal.
4. Having heard the learned counsel for the petitioner and the learned Government Pleader and having regard to the facts and circumstances of the case, I am of the view that this writ petition can be disposed of directing that the demand for interest shall be kept in abeyance till the matter is finally decided by the Appellate Tribunal. Though technically the refund due to the petitioner for the year 2016-17 could not have been adjusted against the demand for 2015-16 when there was a stay on account of the provisions contained in Section 60 (1A) of the KVAT Act, I am of the view that the issue need not be considered in this writ petition as it is the specific case of the learned Government Pleader that the refund came to be adjusted against the demand only on account of the fact that the Assessing Authority was not intimated regarding the filing of the appeal and the deposit of 10% of the tax demand. However, I am of the opinion that the demand for interest has to be kept in abeyance pending the final decision of the Appellate Tribunal.
5. Accordingly, this writ petition will stand disposed of directing that the demand for interest out of the liability assessed against the petitioner for the year 2015-16 shall not be demanded or collected from the petitioner pending disposal of the statutory appeal before the Tribunal for the year 2015-16.
The writ petition is ordered accordingly.
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