2018 (3) TMI 90 - HC - VAT and Sales Tax

Rectification of mistake - specific case of the petitioner is that the determination of the amount payable by them made in terms of Ext.P2 order is incorrect - Held that - In so far as the correctness of Ext.P5 order is the subject matter of the appeal preferred by the petitioner against the same, it may not be appropriate for this Court to go into the merits of the matter. But, on the materials on record, it appears prima facie to this Court that the computation of the liability of the petitioner in terms of Ext.P5 order is incorrect - petition allowed.

Summary

Issues:
1. Rectification of tax liability under Kerala Value Added Tax Act for the year 2012-13.
2. Challenge of rectified order by the petitioner.
3. Observations by appellate tribunal on tax liability determination.
4. Fresh order passed by assessing authority.
5. Challenge to the fresh order in appeal and application for stay.
6. Disposal of the stay application by the appellate authority.
7. Judicial review of the orders passed.

Analysis:
The petitioner, a dealer under the Kerala Value Added Tax Act, opted to pay tax at compounded rates for the year 2012-13. Initially, the assessing authority permitted the petitioner to pay tax at a certain amount, which was later rectified due to computation errors, increasing the tax liability substantially. The petitioner challenged this rectified order in appeal, where the appellate authority found non-compliance with natural justice principles and directed the assessing authority to issue fresh orders. Subsequently, the assessing authority re-evaluated the tax payable, resulting in a significant increase in the liability. The petitioner appealed this fresh order, seeking a stay which was granted by the appellate authority on the condition of remitting 20% of the demanded tax within three weeks.

Upon judicial review, the court noted that the computation of the petitioner's liability in the latest order was incorrect and failed to consider observations from the appellate tribunal's earlier order. The court opined that the petitioner, who had already paid the initial tax amount, should have been granted an absolute stay. Consequently, the court allowed the writ petition, modifying the impugned order to grant the petitioner the stay requested. Additionally, the appellate authority was directed to dispose of the appeal within two months from the date of the judgment, considering the peculiar circumstances of the case.