2013 (6) TMI 672 - HC - VAT and Sales Tax

Delay in online application in form IB to remit compounded tax for cooked food - Doctrine of substantial compliance - Doctrine of implied power - petitioner argued that there is no prohibition or inhibition going by the phraseology of rule 11 of the Rules, and therefore, the statutory authority could have accepted the application for compounding, since they did not find any other default or defect in it - Held that - The doctrine of substantial compliance does not, in any manner, authorise a statutory authority to permit institution of certain matter in the form of returns, etc., after the period prescribed. If the doctrine of implied power or the doctrine of substantial compliance is stretched to that limit, we can easily foresee abuse of power. The provision in rule 11 of the KVAT Rules, read with section 8 of the KVAT Act, does not provide any room for the statutory authority to condone delay on a ground referable to default of the assessee or his accountant, as in the case here. - Decided against assessee.

Summary

Issues:
1. Timeliness of application for remitting compounded tax under Kerala Value Added Tax Act, 2003.
2. Authority's discretion to condone delay in filing compounding application.
3. Application of doctrine of implied powers and substantial compliance in tax matters.

Analysis:
1. The revision petitioner filed an online application for remitting compounded tax for cooked food after the prescribed deadline. The application was rejected due to being filed after the cut-off date of May 15, 2012, as per the provisions of the Kerala Value Added Tax Rules, 2005.

2. The petitioner argued that since no other default was found in the application, the authority should have accepted it for compounding, citing the doctrine of implied powers. However, the court noted that previous extensions of deadlines were due to system failures, not individual failures, and that the statutory authority cannot condone delay based on the doctrine of implied powers.

3. The court referenced various judgments, including those of the Supreme Court and the High Court, to explain the limitations of the doctrine of implied powers and substantial compliance in tax matters. It emphasized that these doctrines cannot be used to permit the filing of returns after the prescribed period, as it could lead to potential abuse of power.

4. Ultimately, the court found no grounds to entertain the revision petition and dismissed it, stating that the provisions of the Kerala Value Added Tax Act and Rules do not allow for condonation of delay based on the default of the assessee or their accountant. The revision petition was consequently dismissed.