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TMI Blog2016 (12) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment order that the petitioners have violated any of the conditions enumerated in Section 6(5), none of the petitioners are entitled for the benefit of Section 25C. In other words, a finding by the assessing authority that the dealer has violated the conditions in Section 6(5) is a precondition for claiming input tax credit under Section 25C. Penalty proceedings u/s 22(7) of the Act - Held that: - it is an independent provision in respect of dealers paying tax under Section 6(5) and if it is found that amount of tax if any paid is less than the amount of tax which he is liable to pay, then the assessing authority has jurisdiction to direct the dealer to pay difference of tax between the amount of tax already paid and that fixed in such proceedings together with thrice the amount of such difference as penalty. Having regard to the aforesaid discussion, I do not think that the petitioners are entitled to get any relief in the above writ petitions. Petitions disposed off - The assessing Officer is directed to make a fresh assessment giving the benefit of payment of tax at presumptive rate - decided partly in favor of petitioner-assessee. - W.P. (C) Nos. 38920/15, 384 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turnover of ₹ 58,11,410/- and Ext.P7 assessment order for the year 2011-12 by fixing sales turnover of ₹ 68,81,398/-. Once the assessment proceedings were terminated, there was no reason for initiating penalty proceedings. Petitioner submits that the statutory remedy available under Section 55 of the KVAT Act is not effective and therefore this writ petition is filed. 4. Counter affidavit has been filed on behalf of the 1st respondent, inter alia stating that the proceedings had been taken in accordance with law. There is clear suppression of purchase turnover. In the pre-assessment notice, dealer was given full details of purchases detected from KVATIS. Since the purchases during each year is around 1000 numbers, it is not possible to summon each supplier and cross verify the data and therefore they justified the stand taken in the matter. 5. In W.P(C) No.11849/2016, petitioner challenges Exts.P3 P3(a) assessment orders. Petitioner is a presumptive dealer under Section 6(5) of the KVAT Act. The petitioner reported sales turnover below ₹ 60 lakhs for the year 2012-13 and paid tax at presumptive rate. While so, she was served with notices under Sections 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the 1st respondent raising similar contentions and supporting the stand of the Government inter alia contending that there was clear suppression of the purchase turnover for the relevant period. It is submitted that notice dated 19.11.2015 was issued under Section 22(3) of the Act and since the dealer has not produced any books of account during the prescribed time limit, the assessments were completed. Thereafter, the assessment orders were passed under Section 25(1) of the Act. 8. In W.P.(C) No.17808/2016, petitioner challenges Exts.P3 to P3(b) orders passed under Section 25(1) of the KVAT Act. Petitioner, being a presumptive dealer under Section 6(5), seeks the benefit of input tax credit as provided under Section 25C. The contentions raised are similar to other cases. 9. In W.P.(C) No.17809/2016, petitioner challenges Exts.P3, P3(a) P3(b) assessment orders and penalty order wherein also petitioner claims the benefit of input tax credit under Section 25C. Ext.P3 is the order passed under Section 24 of the KVAT Act for the assessment year 2013-14, Ext.P3(a) for the assessment year 2014-15 and Ext.P3(b) is the penalty order issued under Section 67(1)(b)(d) of the KVAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill not in any manner absolve any dealer paying presumptive tax against whom any assessment or other proceedings are initiated by the assessing authority denying the eligibility to pay presumptive tax for the violation of conditions enumerated in sub section (5) of Section 6 from being assessed for payment of tax as a normal dealer or from imposing any penalty under Sub Section (7) of Section 22. (ii) In judgment dated 12.08.2012 in O.T.Revision No.69/2012 (Reji Jose v. State of Kerala) , another Division Bench had occasion to consider the scope and effect of Section 6 (5). Referring to the proviso introduced in the Kerala Finance Act 2011, it was held that, once it is found that the assessee exceeded the turnover limit as prescribed under Section 6(5) especially by detection of an offence, even for the turnover which falls within the limit, the assessee cannot be permitted to pay tax at the rate of 0.5%. Even though it is true that the assessee would not have had the option to collect tax when he continued under the presumptive net, such option was always available by way of maintaining proper books of accounts disclosing the actual turnover and seeking conversion to the mode ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in an instance where suppression is detected by the assessing officer. 17. The benefit of Section 6(5) becomes available to a presumptive dealer, who had agreed to pay tax at the rate of 0.5% of turnover of taxable goods as presumptive tax, instead of paying tax under sub section (1). But, as per Section 6(5), the said dealer shall not be an importer, or a dealer making any sale in the course of industrial trade or commerce, or an exporter, or a dealer registered under the Central Sales Tax Act 1956 or a dealer affecting first taxable sale of goods within the State or a dealer covered by sub section 1(a) of Section 6 or a contractor. Apparently, the 6th proviso to Section 6(5) reads as under:- Provided also that notwithstanding anything contained in the Act or Rules made thereunder, if the turnover of the dealer, who opted for payment of tax under this Sub Section, has exceeded the turnover limit during the course of an year, he shall be eligible for input tax credit on the turnover in excess of ₹ 60 lakhs. This provision may not have application to the facts in an issue especially in the light of the judgment in Keltron Employees Co-operative Society v. State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessing authority had denied the eligibility of the dealer to pay presumptive tax for the violation of conditions enumerated in sub section (5) of Section 6. Unless such a finding is made by the assessing authority in the assessment order that the petitioners have violated any of the conditions enumerated in Section 6(5), none of the petitioners are entitled for the benefit of Section 25C. In other words, a finding by the assessing authority that the dealer has violated the conditions in Section 6(5) is a precondition for claiming input tax credit under Section 25C. 21. In some of these cases, petitioners also challenge the penalty proceedings taken under Section 22(7) of the Act. As already held by the Division Bench in Keltron Employees Cooperative Society (supra), it is an independent provision in respect of dealers paying tax under Section 6(5) and if it is found that amount of tax if any paid is less than the amount of tax which he is liable to pay, then the assessing authority has jurisdiction to direct the dealer to pay difference of tax between the amount of tax already paid and that fixed in such proceedings together with thrice the amount of such difference a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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