2009 (9) TMI 901 - HC - VAT and Sales Tax

Whether CST assessment could be completed by the fast track team under the provisions of section 17D of the Kerala General Sales Tax Act? Held that - The applicability of section 17D of the KGST Act for completion of pending assessments under the CST Act does not bar regular assessing officers to complete CST assessments if the fast track team does not take up such assessments. We therefore uphold the judgment of the learned single judge and dismiss the writ appeal. The appellant will deposit ₹ 50,000 towards assessed tax for 2003-04 and ₹ 1 lakh towards assessed tax for 2004-05 before the assessing officer within two weeks from the date of receipt of a copy of this judgment.

Summary

Issues:
1. Interpretation of Section 17D of the KGST Act for completing pending CST assessments by a fast track team.
2. Applicability of the procedure for assessment under the CST Act.
3. Power of local authorities to assess under the CST Act.
4. Validity of ex parte assessments and remedy available to the appellant.

Interpretation of Section 17D of the KGST Act:
The writ appeal questioned whether CST assessments could be finalized by the fast track team under Section 17D of the Kerala General Sales Tax Act. The appellant argued that Section 17D only applied to pending assessments under the local sales tax Act, not CST assessments. However, the court noted that Section 17D enables completion of pending sales tax assessments by a fast track team appointed by the Commissioner of Commercial Taxes to clear arrears and facilitate the implementation of the Kerala Value Added Tax Act. The court emphasized that the procedure for assessment under the CST Act aligns with that of the KGST Act, allowing the fast track team to handle CST assessments as well.

Applicability of the procedure for assessment under the CST Act:
The court highlighted that authorities empowered to assess under the local Act also possess the authority to assess, collect, and enforce payment under the CST Act, as per Section 9(2) of the CST Act. This means that the procedure for assessment under the KGST Act applies equally to CST assessments. The court clarified that the fast track team's ability to complete CST assessments was not negated by the State's statement that they did not intend to use Section 17D for CST assessments. Regular assessing officers could still finalize CST assessments if the fast track team did not do so.

Power of local authorities to assess under the CST Act:
The judgment reinforced that local authorities handling assessments under the KGST Act automatically have the power to assess under the CST Act, ensuring a consistent procedure for both types of assessments. The court upheld the applicability of Section 17D of the KGST Act to complete pending CST assessments, affirming the single judge's decision and dismissing the writ appeal.

Validity of ex parte assessments and remedy available to the appellant:
While dismissing the appeal, the court noted that the assessments were made ex parte. The appellant's remedy against such assessments was to file an appeal before the Tribunal after depositing the full tax amount, as required by Section 17D(5) for appeal before the Tribunal. The court granted conditional relief to the appellant, directing them to deposit specified amounts towards assessed tax for certain years and cooperate with the fast track team for revised assessments, ensuring proper opportunity for the appellant to present their case.

In conclusion, the judgment clarified the interpretation of Section 17D of the KGST Act, affirmed the applicability of the procedure for assessment under the CST Act, and provided a remedy for ex parte assessments while upholding the authority of local officers to assess under both Acts.