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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 ..... -12 and remitted tax under Section 6(5) of the KVAT Act. It is contended that after 5 years, i.e., on 03.08.2015, the monthly returns were verified for the aforesaid years and pre-assessment notices were issued under Section 25(1) of the KVAT Act alleging that the petitioner suppressed purchase turnover with an intention to evade payment of tax. Though the petitioner filed reply, the assessments have been completed, which are produced as Exts.P5 to P7. The 1st respondent also issued Ext.P8 penalty notice proposing to impose penalty under Section 22(7) of the KVAT Act. Petitioner filed objection inter alia contending that when assessments have been completed as per Exts.P5 to P7 applying tax under Section 6(1) of the KVAT Act 2003, there is no basis for initiating penalty proceedings. However, the 1st respondent issued penalty orders, which are impugned as Exts.P12 to P14. 3. Main contention urged by the petitioner is that, being a presumptive dealer under Section 6(5) of the KVAT Act, once returns have been accepted and finalised, there was no reason for re-opening the assessment under Section 25(1) of the KVAT Act. Even otherwise, under the 6th proviso to Section 6(5) of the KVAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, the petitioner seeks to quash Exts.P3, P3(a) & P3(b) orders. Ext.P3 is the assessment order under Section 25(1), Ext.P3(a) is the penalty order under Section 22(7) and Ext.P3(b) is an order under Section 66. 6. Counter affidavit has been filed by the respondent inter alia contending that the purchase turnover of the petitioner as per the list uploaded by respective suppliers would come to Rs. 1,36,69,386/-, the net unaccounted purchase unearthed was to the tune of Rs. 70,02,502/-. It is contended that the order of penalty under Section 22(7) cannot be challenged as it is a specific penalty provision of presumptive dealers violating provisions of Section 6(5). It is further contended that the petitioner is not entitled for the benefits under Section 25C as amended by Finance Act 2014. The said provision is not applicable to the dealer as the assessment was on account of suppression of purchase made by the dealer, which is not one among the conditions prescribed in the said provision. 7. In W.P.(C) No.13920/2016, the impugned orders are Exts.P3 to P3(e) passed by the 1st respondent under Section 22(7) for the assessment years 2009-10 to 2014-15 of the KVAT Act. The main con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns contend that there is no suppression of purchases, at the time of hearing, none of the petitioners had raised such a contention and confined their argument to the benefit available under Section 25C of the KVAT Act. 14. Heard the learned counsel for the petitioners and the learned Government Pleader appearing on behalf of the State and its authorities. The learned counsel for the parties relied upon the following judgments:- (i) Judgment dated 23.01.2015 in O.T.Revision No.178/2014 in M/s.Keltron Employees Co-operative Society v. State of Kerala. In this judgment, the Division Bench of this Court considered the scope of 6th proviso to sub-section 5 of Section 6 inserted by the Finance Act 2011 with effect from 01.04.2005 by which dealers were entitled to claim benefit of input tax credit on the turnover in excess of Rs. 60 lakhs. The contention urged was that the said benefit would be available even if an application is not filed as per the Rules. It was held that the assessee will be entitled for input tax credit only if an application is filed before the assessing authority as provided under the Rules. The Division Bench also considered the scope and effect of Section 25C br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub v. State of Kerala, the Division Bench of this Court while considering the retrospective amendment made by introduction of Section 25C held that the said provision was intended to enable the dealer to get input tax credit of special rebate even if the dealer had violated conditions enumerated in Sub Section (5) of Section 6. (iv) Reference is also made to the judgment in Mooken Devassy & Co v. Commercial Tax Officer reported in [(2016) 24 KTR 516 (Ker)]. In that case, question was; with reference to presumptive dealer under Section 6(5), if the assessing officer had completed assessment taking into account unaccounted purchases and if the turnover does not exceed Rs. 60 lakhs, whether the dealer will be entitled to benefit of Section 6(5) of the Act. It is held that "In such a case, even in spite of the turnover suppressed, since the turnover of the assessee is still below 60 lakhs of rupees, according to us, the assessee ought to have been given the benefit of Section 6(5) of the Act." 15. As already indicated, the petitioners contend that they are all entitled to the benefit of input tax credit as provided under Section 25C which is incorporated as per Finance Act, 2014, sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. The conditions specified under Section 6(5) are enumerated under clauses (a) to (f), which read as under:- "(a) an importer; or (b) a dealer making any sale in the course of interstate trade or commerce or export; or (c) a dealer registered under the Central Sales Tax Act, 1956 (Central Act 74 of 1956); or (d) a dealer effecting first taxable sale of goods within the State; or (e) a dealer covered by sub-section (1A); or (f) a contractor" A bare reading of the conditions enumerated above does not instill confidence to arrive at a conclusion that suppression of purchase turnover comes within any of the conditions enumerated under Section 6(5). 20. Therefore, primarily Section 25C of the Act will not apply in an instance where the presumptive dealer suppresses his turnover. The learned counsel for the petitioners however submits that even in an instance where there is suppression of turnover by a presumptive dealer, a Division Bench of this Court in Mooken Devassy & Co., (supra) observed that if the turnover assessed does not exceed Rs. 60 lakhs, the dealer is entitled for the benefit of payment of presumptive tax. If such a rationale is adopted, the petitioners ..... X X X X Extracts X X X X X X X X Extracts X X X X
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