2020 (5) TMI 535 - HC - VAT and Sales Tax

Maintainability of petition - effective alternative remedy by way of Revision - Section 56 of the Kerala Value Added Tax Act, 2003 - whether the product of the appellant will fall under entry 36 in accordance with Rule 23 of the Rules of Interpretation? - HELD THAT - There are no authoritative pronouncement of this court or the hon'ble Supreme Court with respect to the interpretation of the amended provision. Therefore, whether the exercise done by the Ist respondent by invoking the powers under Section 56(1) is sustainable or not, can be decided only on an elaborate consideration into the merits of the issue. In that respect, we perfectly agree with the findings rendered by the learned Single Judge that the orders do not suffer from any jurisdictional error or violation of natural justice or contravention of the provisions. All the contentions raised herein above can be effectively agitated in a properly constituted Revision Petitions filed under Section 59 of the KVAT Act - the intra-court appeal filed is upheld. If the appellant prefers a statutory Revision Petition before the Commissioner, the same shall be entertained by the said authority. If any delay condonation application is filed along with the Revision Petition, the time spent by the petitioner in prosecuting the writ petition as well as this writ appeal shall be taken into consideration in deciding the question of condoning the delay. So also, if any interim application is filed seeking stay of further proceedings, pending disposal of the Revision Petition, the Commissioner shall consider the same and pass appropriate orders without any further delay. Appeal disposed off.

Summary

Issues:
Challenge to orders passed under Section 56 of the KVAT Act - Jurisdictional error, violation of natural justice, statutory provisions - Availability of alternative remedy under Section 59 of the Act - Interpretation of amended provisions - Sustainability of exercise under Section 56(1) - Possibility of modified orders leading to recovery - Stay against recovery - Entertaining Revision Petition before the Commissioner - Condonation of delay - Passing of appropriate orders by the Commissioner - Restraining assessing authority from passing modified orders.

Analysis:

1. The appellant challenged orders passed under Section 56 of the Kerala Value Added Tax Act, 2003 (KVAT Act) in a writ petition, contending jurisdictional error, violation of natural justice, and contravention of statutory provisions. The Single Judge found no special circumstances to intervene under Article 226 of the Constitution of India, noting the availability of an alternative remedy under Section 59 of the Act before the Commissioner. The appellant sought time to move before the Revisional Authority, and the Single Judge granted a stay against recovery for three weeks. The appeal was filed against this judgment.

2. The assessments in question relate to the years 2009-2010 and 2010-2011, initially finalized in 2012. A dispute arose regarding the tax rate for the product "Fat Free Tablet." A previous judgment set aside the assessments, leading to modified assessments. However, the Ist respondent canceled these modified assessments through the impugned orders. The appellant argued that the orders were passed in ignorance of amended provisions and observations in the previous judgment, which were not properly considered by the Ist respondent.

3. The court noted that the appellant has a statutory remedy under Section 59 of the KVAT Act before the Commissioner. The ultimate decision on whether the product falls under a specific entry requires a detailed examination, as no authoritative interpretation exists. The court agreed with the Single Judge's findings that the orders did not suffer from jurisdictional errors or violations. The appellant's contentions can be addressed in Revision Petitions under Section 59, and hence, the court declined to interfere in the intra-court appeal.

4. Despite the above, the court acknowledged the appellant's concern regarding possible modified orders leading to recovery. A stay against recovery was already granted for three weeks. The court directed that if the appellant files a Revision Petition before the Commissioner, any delay may be considered, and interim applications for stay of proceedings should be promptly addressed. The assessing authority was restrained from passing modified orders for one month to facilitate the appellant's actions.

5. In conclusion, the writ appeal was disposed of accordingly, emphasizing the availability of the statutory remedy under Section 59, the importance of addressing concerns regarding recovery, and the need for proper consideration and decision-making by the Commissioner in the Revision process.