2018 (6) TMI 1289 - HC - VAT and Sales Tax

Permission for Revision of return - time limitation - application filed beyond time limit - sub-rule (4A) of Rule 22 of the Kerala Value Added Tax Rules - Change in turnover - Circular No.14 of 2017 - Held that - Ext P1 is an application preferred out of time. It is seen that a circular has also been issued by the competent authority under the Act as Circular No.8 of 2018 for proper implementation of the amended provision - The applicability of the amendment made to sub-section (2) of Section 42 of the Act to the case of the petitioner is a matter for the competent authority under the Act to consider at the first instance. The first respondent is directed to pass fresh orders on Ext.P1 application preferred by the petitioner in the light of subsection (2) of Section 42 of the Act, as amended in terms of the Finance Act, 2018 and Circular No.8 of 2018 - Ext P6 order is quashed.

Summary

Issues:
1. Rejection of application for permission to submit a revised return under the Kerala Value Added Tax Act, 2003.
2. Interpretation of sub-section (2) of Section 42 of the Act regarding filing revised returns.
3. Compliance with the time limit prescribed by Rule 22 of the Kerala Value Added Tax Rules for filing revised returns.
4. Application of the provisos added to the existing proviso to sub-section (2) of Section 42 of the Act in terms of Finance Act, 2018.

Analysis:

1. The petitioner, a registered dealer under the Kerala Value Added Tax Act, filed a return for September 2015 with an incorrect value of goods stock transferred. Upon detecting the mistake upon receiving the audit report, the petitioner sought permission to submit a revised return through Ext.P1 application. However, the application was rejected by the first respondent based on Circular No.14 of 2017, citing concerns about changes in turnover. This rejection was challenged in a writ petition.

2. The petitioner argued that under sub-section (2) of Section 42 of the Act, they were entitled to file revised returns upon detecting mistakes with reference to audited figures. However, it was noted that the petitioner did not provide the audit report for the relevant year, and the application for a revised return was made before the audit report was received. Therefore, the reliance on sub-section (2) of Section 42 was deemed invalid.

3. While the petitioner could independently apply for permission to submit a revised return, it was highlighted that such an application must adhere to the time limit specified by sub-rule (4A) of Rule 22 of the Kerala Value Added Tax Rules. The petitioner failed to demonstrate that the Ext.P1 application was filed within the prescribed time frame, indicating that it was submitted late.

4. The petitioner also contended that the provisos added to the existing proviso to sub-section (2) of Section 42 of the Act, as per the Finance Act, 2018, allowed for the revision of returns in certain cases. These provisions permitted dealers to revise returns for technical or clerical defects up to a specified period, subject to conditions outlined in the amendment. The Court directed the first respondent to reconsider the Ext.P1 application in light of the amended provisions and Circular No.8 of 2018 within a specified timeframe.

In conclusion, the High Court of Kerala quashed the initial rejection order and instructed the first respondent to review the petitioner's application for a revised return in accordance with the relevant legal provisions and circulars, emphasizing the need for timely compliance and adherence to statutory requirements.