2017 (9) TMI 1243 - HC - VAT and Sales Tax

Restoration of appeal - Penalty u/s 67(1)(c) of the Act - benefit u/s 22(5) of the KVAT Act - whether such an order could have been passed by the Tribunal in the appeals filed by the assessee and particularly in the absence of appeal or cross objection by the Revenue? - Held that - Although this issue was not raised in the appellate order, this was pointedly raised in the rectification applications as is seen from the orders passed by the Tribunal itself - it is not that in a case of this magnitude, the issues were properly framed or considered - matters require to be considered afresh with due application of mind - proceedings are now restored to the files of the Tribunal for re-consideration - appeal allowed by way of remand.

Summary

Issues:
Challenge to common order passed by Tribunal regarding assessment under KVAT Act, applicability of Section 22(5), rectification applications dismissed by Tribunal, enhancement of liability without appeal or cross objection by Revenue.

Analysis:

1. The revision petitions were filed challenging a common order passed by the Kerala Value Added Tax/Agricultural Income Tax and Sales Tax Appellate Tribunal concerning assessments under the KVAT Act. The appeals were related to the period from November 2011 to March 2012 and from June 2012 to October 2013. Assessments were completed under Section 22(3) of the Act due to non-filing of returns by the assessee, resulting in penalty levied under Section 67(1)(c). Appeals were made before the first appellate authority, which directed the benefit of Section 22(5) to the appellant and allowed assessments under Section 25(1) for any escaped turnover. The Tribunal, in the impugned order, set aside the first appellate authority's decision and reinstated the assessing officer's order, leading to an increase in the liability of the assessee.

2. The counsel for the assessee relied on the decision in State of Kerala v. Vijaya Stores 42 STC 418, while the Government Pleader defended the Tribunal's orders and majority decisions on rectification applications. The issue raised was whether the Tribunal could enhance the liability of the assessee without any appeal or cross objection by the Revenue. The Tribunal's orders on rectification applications were divided, with two members dismissing and one member disagreeing. The Court noted that the total liability on the assessee exceeded `10 crores, but compliance with the first appellate authority's orders would have reduced it to less than `1,00,00,000. The Court found that the issues were not properly framed or considered, necessitating a fresh consideration in light of the referred decision.

3. Consequently, the Court set aside the Tribunal's common order in the appeals and rectification applications filed by the assessee. The Court also acknowledged the request by the assessee's counsel to withdraw the appeals before the Tribunal. As the orders were set aside for reconsideration by the Tribunal, the Court left it to the Tribunal to pass fresh orders in accordance with the law, disposing of the revisions.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the Court's decision in each aspect of the case.