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2019 (2) TMI 1090 - HC - VAT and Sales TaxForfeiture of tax - Section 46A of the Kerala General Sales Tax Act, 1963 - Held that:- A Division Bench of this Court had, considering Section 72 of the Kerala Value Added Tax Act, 2003 which is in pari materia with Section 46A of the KGST Act, found, in Tata Teleservices Ltd. v. State of Kerala & Others [2009 (2) TMI 857] that such forfeiture is possible - the question is answered against the assesses and in favour of the Revenue. Ought not the Tribunal have found that the KGST Rules, 1963, specifically Rule 22A, stood amended with effect from 01.04.2000 enabling the deduction of tax to be made in a works contract excluding that portion relating to inter-State transfer of goods? - When the Court declares a provision as ultra vires, it stands deleted from the statute book. The State definitely could have brought a provision in the statute providing such exclusion, thus removing the infirmity pointed out by the Constitutional Court and to bring in past transactions could have also brought in a validation clause. The State having not done so, the prescription in the Rules for exclusion would not enable a proceeding for failure of deduction of tax at source; which obligation is no longer there by reason of the declaration by a Constitutional Court - decided in favor of assessee. Whether the introduction of sub-section (7C) in Section 7 by KGST (Amendment) Ordinance, 2003 dated 24.04.2003 with retrospective effect from 05.08.2002 obliged the assessee to make deductions with respect to works contract from the contractor? - Held that:- With respect to sub-section (7C) of Section 7, as it was brought in with retrospective effect from 05.08.2002; we would not answer the question raised since the issue has been remanded to the Assessing Officer as to whether the contractor of the assessee had applied for compounding or not - We, hence, refuse to answer the question. Whether the further amendment to sub-section (7C) of Section 7 with effect from 01.04.2004 obliged the assessee to make such deductions, excluding the portion of inter-State transfer of goods, on payment to the contractor? - Held that:- As to the amendment brought in which gave rise to question No.(iii), we have to notice that again the amended sub-section (7C) did not have an obligation for deduction of tax at source. In such circumstances, we answer question No.(iii) framed by us against the Revenue and in favour of the assessee. Whether the additions made based on the penalty orders were liable to be deleted along with the actual evasion found in the penalty proceedings when the assessee had not produced any substantiating material to prove their contention of penalty having been imposed on capital goods? - Held that:- There is no independent consideration as to the addition of the turnover on allegation of tax evasion and the addition made with respect to probable omissions and suppressions - We, hence, set aside the deletion of the additions as such made by the Tribunal and direct the Assessing Officer to look into it afresh after verifying the books of accounts, the certificate of registration and any other substantiating materials. We make it clear that the original certificate of registration of the KGST regime having been already surrendered, the Assessing Officer would look into the records and the copy of the connected cases certificates produced by the assessee. Revision allowed in part.
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