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2016 (8) TMI 2 - KERALA HIGH COURT

2016 (8) TMI 2 - KERALA HIGH COURT - TMI - Validity of seeking Furnishing of security for an amount of ₹ 70 lakhs as a condition for registration - Section 17(2) of the KVAT Act - Held that:- there cannot be any dispute regarding the power of the officer in calling upon a dealer to furnish security not exceeding of the tax payable on the turnover of the dealer for the year as estimated by the Registering Authority. In cases where a new dealer seeks for registration, the Registering Autho .....

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s exorbitant. However, since the petitioner had relied upon Ext.P7 the return filed by M/s.Khushi International, the tax liability can be easily found out from the said document itself and the Registering Authority has to consider the same before taking a final decision in the matter. I am of the view that Ext.P7 may have relevance while conducting an enquiry in terms of Section 17 (2) of the Act. For that purpose, it will be appropriate for the Registering Authority to consider Ext.P7 as well b .....

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mount of ₹ 70 lakhs as a condition for registration. It is inter alia contended that, the amount demanded is substantially huge taking into account various factors involved in the matter. The petitioner submits that as far as the firm M/s.Khushi Intergroup Corporation was concerned, the turnover of the firm has no basis to estimate the turn over of the present firm which is about to be started. Therefore, the demand is highly exorbitant and is not in accordance with the Statute. It is also .....

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ing the stand taken by Ext.P3. It is sated that one Pushkar Dutt Bansal who is going to be a partner of present firm M/s.Khushi Intergroup Corporation was admittedly a partner of M/s.Khushi International. Their total turnover during the year 2015-16 is more than ₹ 19 crores with a tax liability of more than 1.58 crores. It is in the said circumstances that, invoking Section 17(2) of the KVAT Act the petitioner is called upon to furnish security. 3. The learned Government Pleader submits th .....

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cular No.10/2006, it seems that there is an exemption drawn, as far as the applicability of the circular is concerned with reference to certain commodities which includes veneer, plywood etc. Though it is contended by learned counsel for the petitioner that, still the circular will be applicable, as there are certain limitations provided for furnishing of security deposit, I do not think that, the officer is deprived of any power for demanding security deposit more than what is stated in Ext.P5, .....

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by the registering authority: Provided that the registering authority shall have the power to demand at any time additional security if such authority has reason to believe that the turnover estimated under sub-sections (1) or (2) was too low. Provided further that no security or additional security shall be demanded under this sub-section from a dealer falling under clause (ii) of sub-section (2) of section 15; 4. Therefore, there cannot be any dispute regarding the power of the officer in call .....

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