2018 (2) TMI 1429 - HC - VAT and Sales Tax

Review of the judgment dated 10.08.2017 - Held that - the judgment under review was passed relying on that portion of the judgment of the Division Bench in Silver Line Villas & Apartments Pvt. Ltd v. State of Kerala 2016 (12) TMI 1695 - KERALA HIGH COURT which took a stand that in respect of any suppressed turnover which was not declared as part of the compounding proceedings the benefit of the rate of tax applicable to compounding provision would not be applicable. The judgment under review does not call for any interference - review petition dismissed.

Summary

Issues: Review of judgment dismissing writ petitions based on applicability of Division Bench decision in Silver Line Villas & Apartments case.

The judgment in question pertains to review petitions seeking a reevaluation of a previous judgment that dismissed writ petitions. The basis of dismissal was the applicability of a Division Bench decision in the Silver Line Villas & Apartments case. The review petitioner argued that the facts in the referred case were distinct from the current writ petitions. The Division Bench decision centered on the declaration of works contracts for compounding under the Kerala Value Added Tax Act. It was found that failure to declare certain contracts for compounding required assessment of suppressed turnover under regular provisions, not the compounding scheme. The review petitioner contended that their declaration was complete for compounding purposes, seeking to differentiate their case from the Division Bench ruling. The Court noted a similar stance taken in a previous judgment regarding suppressed turnover in a compounding scheme context. The Court emphasized the binding nature of the compounding scheme as a contract between the dealer and the Department, limiting the turnover subject to compounding to the declared amount. Any suppressed turnover not included in the compounding declaration would be subject to regular tax rates.

The Court highlighted an instance where an assessing officer erroneously applied a higher tax rate to the entire turnover, including the declared turnover for compounding. The Court deemed this approach incorrect and directed the reassessment of tax demand, restricting the regular tax rate application to turnover not covered by the compounding declaration. Consequently, the Court found no grounds for interference with the reviewed judgment, dismissing the review petitions except for the provided clarification. The reviewing judge upheld the original judgment based on the principles outlined in previous decisions and the specific circumstances of the case.