2018 (9) TMI 1190 - HC - VAT and Sales Tax

Maintainability of appeal - the asssessing authority of the petitioners has suo motu amended the certificate of registration of the petitioners under the Act and revoked the authorization granted to effect interstate purchase of fuel - Section 7(4) of the Central Sales Tax Act. Whether an appeal lies under the VAT Act against an order issued under Section 16(10)? Held that - It is seen that Section 55(1) of the VAT Act dealing with the right of appeal against orders issued under the said statute has been amended in terms of the provisions contained in the Finance Act, 2017 - the petitioners are entitled to prefer appeals challenging the orders issued under Section 7(4) of the Act. It is seen that the impugned orders have been rendered without taking note of the amendment introduced to Section 55(1) of the VAT Act in terms of the provisions contained in Finance Act, 2017. Petition allowed.

Summary

Issues:
1. Validity of orders issued under Section 7(4) of the Central Sales Tax Act.
2. Maintainability of appeals against the orders under the Kerala Value Added Tax Act.
3. Interpretation of Section 55(1) of the VAT Act post amendment.
4. Relief sought by the petitioners in the writ petitions.

Analysis:
The judgment delivered by the High Court of Kerala pertains to the validity of orders issued under Section 7(4) of the Central Sales Tax Act. The assessing authority had amended the certificate of registration of the petitioners and revoked their authorization for interstate purchase of fuel, effective from 01.07.2017. The petitioners challenged these orders in appeal before the second respondent, which were dismissed on the grounds of non-maintainability. Consequently, the petitioners filed writ petitions against the said orders.

Upon hearing arguments from both parties, the court noted that the orders in question were issued under Section 7(4) of the Act. It was highlighted that the remedy against such orders must be determined with reference to the provisions of the Kerala Value Added Tax Act (VAT Act). The corresponding provision in the VAT Act to Section 7(4) of the CST Act is Section 16(10). The court then delved into the issue of appealability against orders issued under Section 16(10) of the VAT Act.

The court analyzed Section 55(1) of the VAT Act, which deals with the right of appeal against orders issued under the statute. It was observed that this section had been amended in accordance with the Finance Act, 2017. The amended provision allowed for appeals against orders issued under Section 7(4) of the CST Act. The court concluded that the impugned orders were rendered without considering the amendment to Section 55(1) of the VAT Act.

As a result, the writ petitions were allowed, the impugned orders were set aside, and the second respondent was directed to pass fresh orders on the appeals filed by the petitioners in compliance with the law. The court mandated that this process should be completed within one month from the date of receiving a copy of the judgment.