2014 (9) TMI 910 - HC - VAT and Sales Tax

Availment of benefit of compounding - Reopening of proceedings holding that 1% cess payable was not included for the purpose of reckoning the amount actually payable as compounded tax - held that - similarly situated persons, being aggrieved of the condition imposed by the appellate authority to avail the benefit of interim stay, had approached this Court. The law stands declared by a Division Bench of this Court in State of Kerala v. Gopalakrishanan 2002 (12) TMI 582 - KERALA HIGH COURT and Bhima Jewellery V. Assistant Commissioner 2002 (7) TMI 778 - KERALA HIGH COURT . This Court had directed the appellate authority to consider and pass final orders on the appeal granting absolute stay till such time. Ext. P18 is the judgment passed by this Court under one such circumstance and pursuant to this, the matter was considered by the appellate authority, who accepted the version of the assessee and accordingly, Ext.P19 order was passed setting aside the impugned orders and allowing the appeals. - matter remanded back - Decided in favour of assessee.

Summary

Issues: Reopening of tax liability under Kerala Value Added Tax Act due to non-inclusion of 1% cess in compounded tax calculation; Pursuance of Revenue Recovery proceedings during pendency of appeals; Granting interim stay during appeal process.

In this judgment by the Kerala High Court, the petitioner, a jeweler, had cleared their tax liability under the Kerala Value Added Tax Act for certain assessment years by availing the benefit of compounding. However, the tax authority sought to reopen the liability, claiming that 1% cess was not included in the compounded tax calculation. This led to the issuance of orders imposing a significant burden on the petitioner. The petitioner then filed appeals and stay petitions before the appellate authority, but Revenue Recovery proceedings continued unabated. The petitioner approached the High Court through a writ petition seeking relief.

During the proceedings, it was highlighted that similarly situated individuals had approached the High Court previously regarding the condition imposed by the appellate authority for availing interim stay. Citing precedents like State of Kerala v. Gopalakrishnan and Bhima Jewellery v. Assistant Commissioner, the Court directed the appellate authority to consider and pass final orders on the appeals, granting absolute stay until final decisions were made. Following these directives, the appellate authority accepted the petitioner's version in subsequent cases and set aside the impugned orders, allowing the appeals. The petitioner requested similar relief in this case.

After hearing both parties, the Court decided to direct the tax authority to consider and pass orders on the pending appeals filed by the petitioner in accordance with the law, providing an opportunity for the petitioner to present their case. The tax authority was instructed to do so within three months from the date of receipt of the judgment. Additionally, any coercive proceedings were ordered to be kept on hold until the appeal process was finalized. The petitioner was directed to submit a copy of the judgment and the writ petition to the relevant tax authority for further action.