Case Law Details
Commercial Tax Officer Vs Chungath Jewellery (Kerala High Court)
Facts- When the compounded tax for dealers in ornaments or articles of gold, or other metals were retrospectively amended for the year 2011-12, the dealers raised a challenge against the collection of differential tax.
The learned Single Judge allowed all the writ petitions after concluding that the differential tax attempted to be collected from the writ petitioners for the assessment year 2011-12 was legally unsustainable. The department has come up in these appeals contending that the retroactive operation of the compounded rate of tax was within the scope of the Government’s authority and the consequential collection of differential tax was legally valid.
It was contended that the compounded tax being in the nature of a contract, the Government was estopped from demanding compounded tax at a higher rate sanction was granted by the assessing officer to pay tax under the compounded scheme, that too in instalments.
Conclusion- Held that the retrospectivity of tax or its collection brought in by the Finance Act 16 of 2011 is not controlled by the validation clause in section 12 of that Kerala Value Added Tax Act, 2003.
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