ANIL KUMAR S., vs. THE COMMISSIONER OF STATE GOODS AND SERVICE TAX DEPARTMENT,

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OP (TAX)/2/2019HC KeralaKLHC01021758201921 March 2019Author: HONOURABLE MR.JUSTICE C.K.ABDUL REHIM,HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI7 pages
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What did the High Court hold?

The High Court, while exercising its supervisory jurisdiction under Article 227, found that it could not interfere with the interim order passed by the Tribunal as it was issued within the Tribunal's discretionary powers and based on an evaluation of the prima facie merits. The Court noted that the Tribunal had applied its mind and passed a speaking order. However, considering the petitioner's financial difficulties and the proviso to Section 55(4) of the KVAT Act (though applicable to first appeals, it was considered in the spirit of equity), the Court decided to modify the Tribunal's order. The condition for deposit was reduced from 30% to 20% of the total amount due. The deposit was to be made within one month from the date of the High Court's order. The Court explicitly stated that this modification should not be considered a precedent. The original petition was dismissed, but the interim order of the Tribunal was modified.

What were the facts?

The petitioner, a Works Contractor, is challenging an interim order (Ext.P12) passed by the Kerala Value Added Tax Appellate Tribunal (Tribunal) on February 28, 2019. The assessment for the year 2014-2015 under the Kerala Value Added Tax Act, 2003 (KVAT Act) was reopened. The petitioner's appeal against the assessment order was unsuccessful before the Deputy Commissioner, Appeals, leading to a Second Appeal before the Tribunal (TA(VAT)No.257/2018). An interim petition (IP No.362/2018) was filed seeking a stay on recovery. The Tribunal granted a stay on the condition of depositing 30% of the total disputed amount and executing a bond for the balance within 30 days.

What were the issues?

1. Whether the High Court, in its supervisory jurisdiction under Article 227 of the Constitution, can interfere with an interim order passed by the Tribunal in the exercise of its discretionary powers, which was based on an evaluation of the prima facie merits of the appeal? Assessee's Arguments: - The petitioner argued that there was a delay in payment of approximately 31 lakhs and that they were unable to comply with the interim order. - They drew attention to the proviso to Section 55(4) of the KVAT Act, which provides for an automatic stay upon remittance of 20% of the disputed amount in first appeals. Revenue's Arguments: - The judgment does not record any specific arguments made by the revenue.

Which sections of the Income-tax Act were involved?

Section 8A, Section 55(4)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM & THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI THURSDAY ,THE 21ST DAY OF MARCH 2019/30TH PHALGUNA, 1940 OP (TAX).No. 2 of 2019 T.A.(VAT)No.257/2018 Kerala Value Added Tax/Agrl. Income Tax and Sales Tax Appellate Tribunal, Additional Bench, Thiruvananthapuram PETITIONER: ANIL KUMAR S., SREE NILAYAM, NEAR NEW KGC, KUNDARA P.O., KOLLAM DISTRICT. BY ADV. SRI.BOBBY JOHN RESPONDENTS: 1 THE COMMISSIONER OF STATE GOODS AND SERVICE TAX DEPARTMENT, KERALA, TAX TOWER, KILLIPPALAM, KARAMANA, THIRUVANANTHAPURAM-695002. 2 THE COMMERCIAL TAX OFFICER-II, WORKS CONTRACT, COMMERCIAL TAX, (NOW STATE GOODS AND SERVICE TAX DEPARTMENT), KOLLAM- 691002. 3 THE KERALA VALUE ADDED TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH, SASTHAMANGALAM, THIRUVANANTHAPURAM-695010. OTHER PRESENT: SPL.GP (TAX)- SRI.C.E.UNNIKRISHNAN THIS OP TAX HAVING COME UP FOR ADMISSION ON 21.03.2019, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: OP(Tax) No. 2 OF 2019 -:2:- C.K. ABDUL REHIM & R. NARAYANA PISHARADI, JJ. ----------------------------------------------------- OP(Tax) No. 2 OF 2019 ------------------------------------------------------- Dated this the 21st day of March, 2019 Abdul Rehim , J.

J U D G M E N T The petitioner is invoking the supervisory jurisdiction vested on this court under Article 227 of the Constitution of India for challenging Ext.P12 interim order passed by the Kerala Value Added Tax Appellate Tribunal, Additional Bench, Thiruvananthapuram, dated 28.02.2019. 2. The petitioner is a Works Contractor, whose assessment under the Kerala Value Added Tax Act, 2003(hereinafter referred to as the 'KVAT Act') with respect to the assessment year 2014-2015 was reopened, dehors the permission granted under Section 8A of the KVACT Act for payment of tax under the compounded rate; The order of OP(Tax) No. 2 OF 2019 assessment was challenged in appeal before the Deputy Commissioner, Appeals, in which the petitioner was unsuccessful. Being aggrieved, he approached the Tribunal in Second Appeal, TA(VAT)No.257/2018. An interim petition, IP No.362/2018 was also filed seeking stay of the recovery.

3.

The Tribunal, after analysing the prima facie merit of the appeal, granted stay subject to condition of the petitioner depositing 30% of the total amount and on executing a bond for the balance, within a period of 30 days from the date of the order. We find that the supervisory jurisdiction vested on this court, which is inherent in nature, cannot be invoked to interfere with an interim order passed by the Tribunal, which is basically issued within their discretionary powers. The condition imposed by the Tribunal is on an evaluation of the prima facie merit of the appeal. As the Tribunal is in-seisen of the appeal itself, it may not be proper and justifiable on the part of this court to enter into an adjudication on the merits of the case. While exercising the OP(Tax) No. 2 OF 2019 discretionary jurisdiction, the Tribunal thought it just and proper to direct payment of 30% of the amount in dispute. It cannot be held that the said order suffers from any error, irregularity, illegality or impropriety. We find that the Tribunal had passed the order after proper and due application of mind. The impugned order is also a speaking one, elaborating about prima facie merit of the appeal. Hence we are not inclined to entertain this original petition.

4.

Learned counsel for the petitioner made an appeal for indulgence of this court, on the basis of the submission that there is a delay of payment of about 31 lakhs effected and that the petitioner is not in a position to comply with the interim order. He had also drawn our attention to the proviso introduced to sub- section(4) of Section 55 of the KVAT Act, wherein the appellants in first appeals will get an automatic stay against further proceedings on remittance of 20% of the disputed amount.

5.

In the case at hand, we find that the petitioner has not OP(Tax) No. 2 OF 2019 remitted any amount during the pendency of the appeal. However, considering the entire circumstances as mentioned above, we are inclined to make a reduction with respect to the condition imposed by the Tribunal, as a gesture of equity by making it clear that the case cannot be considered as a precedent in any matter.

6.

Hence, while dismissing the above original petition, we modify Ext.P12 order passed by the Appellate Tribunal by reducing the condition for deposit of the amount, from 30% to 20% of the total amount due. The deposit as directed by us shall be made within one month from today. C.K. ABDUL REHIM, JUDGE. R. NARAYANA PISHARADI, JUDGE. ul/- [] P.S. to Judge.

OP(Tax) No. 2 OF 2019

Appendix — schedule of exhibits
APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE WORK ORDER DATED 2.2.2015 ISSUED BY SHRI. RAVISANKAR VIDHYA MANDIR TRUST, KOLLAM EXHIBIT P2 TRUE COPY OF THE APPLICATION DATED 16.2.2015 SUBMITTED BY THE PETITIONER BEFORE THE ASSESSING AUTHORITY EXHIBIT P3 TRUE COPY OF THE COMPOUNDING PERMISSION DATED 24.2.2015 PASSED BY THE ASSESSING AUTHORITY IN FORM NO.1E EXHIBIT P4 TRUE COPY OF THE ANNUAL RETURN SUBMITTED BY THE PETITIONER FOR THE YEAR 2014-15 EXHIBIT P5 TRUE COPY OF THE PENALTY ORDER DATED 31.7.2015 PASSED BY THE INTELLIGENCE OFFICER (IB) COMMERCIAL TAXES, KOLLAM EXHIBIT P6 TRUE COPY OF THE JUDGMENT DATED 14.12.2016 IN WRIT APPEAL NO.2425/2016 EXHIBIT P7 TRUE COPY OF THE ASSESSMENT ORDER DATED 7.11.2016 PASSED BY 2ND RESPONDENT EXHIBIT P8 TRUE COPY OF THE FIRST APPELLATE ORDER DATED 24.3.2018 PASSED BY THE DEPUTY COMMISSIONER (APPEALS), KOLLAM OP(Tax) No. 2 OF 2019 -:7:- EXHIBIT P9 TRUE COPY OF THE SECOND APPEAL NO.21.5.2018 FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT TRIBUNAL EXHIBIT P10 TRUE COPY OF THE STAY DATED 21.5.2018 FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT TRIBUNAL EXHIBIT P11 TRUE COPY OF THE ARGUMENT NOTE DATED 28.2.2019 SUBMITTED BY THE COUNSEL FOR THE PETITIONER BEFORE THE TRIBUNAL EXHIBIT P12 TRUE COPY OF THE STAY ORDER DATED 28.2.2019 PASSED BY THE 3RD RESPONDENT TRIBUNAL

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