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INDIRA DEVI A.V Versus THE COMMERCIAL TAX OFFICER, THIRUVANANTHAPURAM DIST. AND OTHERS

2016 (9) TMI 1162 - KERALA HIGH COURT

Levy of tax on discount received from the suppliers - Section 25 of the Kerala Value Added Tax Act, 2003 - total purchase not reported in the annual return and audited accounts, discount deducted from the total value of the bill and input tax credit disallowed to that extent - the appellate authority remitted the matter back for the purpose of deciding only one issue as to whether the disallowance of input tax on discount received was justified or not, and assessing officer considered the entire .....

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e at which it is assessable or any deduction has been wrongly made therefrom or where any input tax or special rebate credit has been wrongly availed of, the assessing authority may, at any time within five years from the last date of the year to which the return relates, proceed to determine, to the best of its judgment, the turnover which has escaped assessment to tax. The question is whether such a method can be adopted when the appellate authority had remitted the matter back to the assessin .....

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or the reason that there had been a mistake committed by an earlier Officer, it is not open for the Officer considering the same again to have a different view. Revenue authorities also had a right of appeal and no such opportunity had been availed of at the relevant time. - The question whether the discount has to be added to the turn over was not a matter which ought to have been taken up afresh especially when no appeal had been filed by the revenue authorities. - the assessing officer no .....

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petition has been filed challenging Ext.P10, an order passed by the Commercial Tax Officer in respect of the assessment year 2011-2012. 2. The short facts involved in the writ petition would disclose that the petitioner was served with notice dated 18/10/2013 under Section 25 of the Kerala Value Added Tax Act, 2003 (hereinafter referred to as 'the Act') proposing to assess the petitioner to a total taxable turnover of ₹ 10,86,23,456/- by adding the discount of ₹ 88,49,785/- w .....

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g the assessment, the 2nd respondent found that the discount received will not form part of sales turnover and hence omitted the proposal to treat it as forming part of the sales turnover. It was further found that there was no purchase and sales suppression except for a turnover of ₹ 5,01,169/-. However, the 2nd respondent disallowed the input tax credit amounting to ₹ 11,06,223/- corresponding to the discount of ₹ 88,49,786/- received from the supplier. According to the petit .....

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ther the petitioner is entitled for input tax credit on the discount received. The complaint of the petitioner is that without considering the matter, as directed in Ext.P7, notice under Section 25(1) of the Act was issued on 10/12/2015 against which, the petitioner preferred an objection at Ext.P9 and the assessing authority, thereafter reW. opened the entire assessment and passed Ext.P10 order taking a totally contrary view as stated in Ext.P5 order, which had become final by virtue of the mer .....

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ed was justified or not, there is no reason for the assessing officer to have considered the entire matter afresh. It is also contended that the assessing authority was not justified in disallowing input tax credit. The learned counsel for the petitioner also placed reliance on the judgment in Black Stone Rubber Industries Pvt. Ltd. v. State of Rajasthan & Ors. [(2002) 10 KTR 37 (Raj)] to contend for the proposition that mere change of opinion of the officer does not amount to a reason for r .....

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e, that the proceedings had been taken again and therefore, it is contended that nothing prevented the Officer in considering the matter afresh after issuing notice under Section 25 of the Act. It is, therefore contended that if at all the petitioner has any challenge to Ext.P10, alternate remedy by way of appeal is already available and therefore there is no reason for this Court to interfere in the matter. Reliance is also placed on Tenny Devassy v. State of Kerala [(2015) 23 KTR 586 (Ker)] wh .....

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re is any justification on the part of the assessing authority in having taken a different view in the matter despite the direction issued by the appellate authority. There is no dispute about the fact that the appellate authority remitted the matter back to consider whether the petitioner was entitled to input tax credit of discount. According to the learned Government Pleader, when an opportunity for hearing was given and the books were verified, the officer had to come to a conclusion that fu .....

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ongly made therefrom, or where any input tax or special rebate credit has been wrongly availed of, the assessing authority may, at any time within five years from the last date of the year to which the return relates, proceed to determine, to the best of its judgment, the turnover which has escaped assessment to tax or has been under assessed or has been assessed at a rate lower than the rate at which it is assessable or the deduction in respect of which has been wrongly made or input tax or spe .....

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ment under this sub-section shall be made where the dealer files revised return and pays the tax which has escaped assessment along with interest under sub-section (5) of Section 31 and thrice the interest as settlement fee. Provided also that the assessments pending as on 31st March, 2013 under this Section shall be completed on or before 31st March, 2014. 6. There is no doubt about the jurisdiction of the assessing officer in a case where it is noticed that part of the turn over of the busines .....

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ped assessment to tax. The question is whether such a method can be adopted when the appellate authority had remitted the matter back to the assessing officer. The appeal was filed by the assessee and therefore the question considered in the appeal was only regarding the entitlement of the petitioner for input tax credit. The issue as to whether discount has to be added on to the total turnover was not an issue pending before the Tribunal. It is apparent from the materials placed on record that .....

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