2015 (8) TMI 1059 - HC - VAT and Sales Tax

Revenue Recovery Proceeding Applicability of Section 22(4) of Kerala GST Act, 1963 Revenue recovery proceedings were initiated against respondent for recovery of amount towards sales tax dues of society for assessment years 1981-82 to 1991-92 Respondent challenged recovery proceedings and by impugned judgment, single Judge allowed petition Held that - Admittedly, section 22(4) was incorporated in statute only with effect from April 1, 1999 which is long after relevant assessment years and even after resignation of respondent from service of society Provision in of section 22(4), in absence of any thing indicating that same is retrospective, can also be prospective If that be so, this provision may not have any impact in so far as the assessment years in question are concerned Thus, Judge was fully justified in allowing petition Decided against revenue.

Summary

Issues:
Recovery proceedings under KGST Act against a cooperative society's former secretary for sales tax dues from 1981-1992.

Analysis:
The respondent, a former secretary of a cooperative society, challenged the recovery proceedings initiated against him for sales tax dues amounting to &8377; 80,07,077 for the assessment years 1981-82 to 1991-92. The recovery action was based on section 22(4) of the KGST Act, holding individuals like directors, managers, secretaries, or officers of a company jointly and severally liable for unpaid taxes. However, it was noted that section 22(4) was introduced only from April 1, 1999, which was after the relevant assessment years and the respondent's resignation from the society. The court highlighted that unless explicitly stated, such provisions are usually prospective and may not apply retrospectively. Therefore, the judgment allowed the writ petition, emphasizing that the provision did not impact the assessment years in question. The court dismissed the appeal, clarifying that the decision did not prevent the authorities from pursuing recovery from the actual liable party.

This judgment underscores the importance of statutory interpretation and the principle that new provisions are typically prospective unless expressly stated otherwise. It also highlights the significance of timing in legal actions, emphasizing that laws introduced after the relevant period may not apply retroactively. The decision provides clarity on the liability of individuals in tax matters and ensures that legal proceedings are conducted in accordance with the applicable laws and timelines.