2016 (2) TMI 929 - HC - VAT and Sales Tax

Completion of the assessment proceedings pursuant to the pre-assessment notices - clarification sought in the earlier writ petition and till such time the clarification is issued all matter was to be kept in abeyance - application for clarification could not be considered since the adjudication order had already been passed in the matter - whether the adjudication order passed without receiving clarifications is maintainable and need to be complied with? - Held that - since the intention of the Court while passing judgment was to ensure that an adjudication would follow the order passed by the authority for clarification under the KVAT Act and the said object has not been materialised through the passing of orders by the 1st respondent without waiting for clarifications the orders passed should be quashed and the respondent directed to pass orders on merits in the application for clarification preferred by the petitioner. - adjudication orders passed without clarification is quashed and the respondent directed to pass fresh orders on the application for clarification submitted by the petitioner after affording the petitioner an opportunity of hearing. The respondent to pass fresh orders as directed within a period of one month after hearing the petitioner. The respondent shall pass fresh orders of assessment in relation to the petitioner only after the issuance of clarification as directed earlier and after hearing the petitioner - petition disposed off - decided in favor of petitioner.

Summary

Issues: Challenge against Exts.P10 and P11 orders under the Kerala Value Added Tax (KVAT) Act.

In this case, the petitioner, a dealer in energy drinks, challenged the Exts.P10 orders passed by the 1st respondent and the P11 order passed by the 3rd respondent under the Kerala Value Added Tax (KVAT) Act. The petitioner had previously approached the Court aggrieved by pre-assessment notices proposing assessment completion and penalty imposition for the assessment year 2014-15. The issue revolved around the classification of products for taxation under the KVAT Act. The Court directed the authority to consider and pass orders on the clarification petition within two months, while keeping further proceedings in abeyance. However, the 1st respondent passed Ext.P10 orders completing assessment proceedings, and the 3rd respondent passed the P11 order stating the application for clarification could not be considered as an adjudication order was already passed. The petitioner challenged these orders on the grounds of overreaching the Court's directions and being passed by a different authority than directed.

Upon hearing both parties, the Court found that the intention of the earlier judgment was to ensure an adjudication following the clarification order under the KVAT Act, which was not fulfilled by the 1st respondent's Ext.P10 orders and the 3rd respondent's P11 order. Consequently, the Court quashed the Ext.P10 orders and directed the 3rd respondent to pass fresh orders on the clarification application after giving the petitioner a hearing. The 3rd respondent was instructed to do so within one month of receiving a copy of the judgment. The Court further directed that the 1st respondent could only pass fresh assessment orders after the 3rd respondent had complied with the directives in the judgment and heard the petitioner. The writ petition was disposed of accordingly.