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2017 (11) TMI 1698 - HC - VAT and Sales TaxClarification under Section 94 of the Kerala Value Added Tax Act, 2003 - Transfer of right to use goods - installation of hoardings and providing the services of putting up advertisements on the said hoardings - taxable event or not - Held that - Even if the irregularities pointed out by the learned Government Pleader did exist, it was incumbent upon the respondents to have brought the anomaly to the notice of a judicial forum for the purposes of setting aside Ext.P4 order of clarification, which, according to them, was illegal. The said course of action not having been adopted by the respondents, permitting the 1st respondent to withdraw an earlier order passed by him, would tantamount to blessing an illegality that is committed by the 1st respondent, in that it would amount to permitting the 1st respondent to exercise a power to review, which is not conferred under the Statute. Ext.P5 order is quashed, to the limited extent that it withdraws Ext.P4 earlier order of clarification.
Issues:
1. Legality of the 1st respondent withdrawing the earlier clarification (Ext.P4) in the subsequent proceedings under Section 94 of the KVAT Act. Analysis: The petitioner and the additional 4th respondent are involved in installing hoardings and putting up advertisements. The petitioner challenged Ext.P5 order, which withdrew an earlier clarification (Ext.P4) regarding the tax liability on rent received for mounting flex boards of advertisements. The 1st respondent withdrew Ext.P4 after a Division Bench judgment took a contrary view. Another Division Bench doubted the correctness of the previous judgment, emphasizing the immovable nature of hoardings. The petitioner argued that the 1st respondent lacked the authority to withdraw Ext.P4, as the power to cancel or modify orders under Section 94 is with the Commissioner unless fraud or misrepresentation is proven. The Court found that the 1st respondent did not have the power to review its own order, thus quashing Ext.P5 to the extent it withdrew Ext.P4. The Government Pleader argued that Ext.P4 could not have been passed in light of the existing Ext.P6 judgment, suggesting that non-disclosure of Ext.P6 would have vitiated Ext.P4. The Court acknowledged the irregularities but emphasized that the respondents should have raised the issue in a judicial forum to set aside Ext.P4 if it was illegal. Allowing the 1st respondent to withdraw Ext.P4 without proper legal recourse would amount to permitting an illegality, as the authority for clarification does not have the power to review its own orders. Consequently, the Court quashed Ext.P5 to the limited extent of withdrawing Ext.P4. In conclusion, the writ petition was allowed, and Ext.P5 order was quashed to the extent that it withdrew the earlier clarification (Ext.P4).
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