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TMI Blog2018 (6) TMI 1241X X X X Extracts X X X X X X X X Extracts X X X X ..... ere filed by the assessee as stipulated under the Kerala Value Added Tax Act, 2003 ("KVAT Act", for short) and an audited statement as per Section 42 was filed on 30.12.2016. On 30.1.2017, Ext.P1 communication was addressed to the AO pointing out that there were some discrepancies in the returns which were detected in the audit report and audited statement. Ext.P1 also sought for permission to revise the returns. The communication at Ext.P1 was sent by e-mail and hard copy was submitted on 13.2.2017. Subsequently, on 9.6.2017 notice under Section 25(1) was issued threatening re-opening of the assessment for the year 2015-16, which was received by the assessee on 20.6.2017. The learned Single Judge relying on the decision of the Division Bench of this Court dated 03.07.2012 in O.T.Rev.No.22/2012 [State of Kerala v. M/s.M.M.Enterprises] allowed the claim of the assessee directing the revision to be permitted, especially since the issuance of notice under Section 25(1) cannot be treated as initiation of a penal action. 3. W.A.No.2541/2017 was a case in which the respondent/petitioner purchased a machinery as capital equipment for its business in March, 2014. The assessee failed to sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment and penalty were continued without reference to each other. The assessee concerned with the assessment year 2009-10 had filed annual return within time. The Data Mining Officers of the Intelligence Wing made a report, after examination of the annual return of the assessee and the audited statement pointing out certain discrepancies. The assessee on receipt of intimation from the AO sought to explain the discrepancies and also filed application dated 6.12.2011 (Ext.P3) seeking revision of returns. The assessee admitted the discrepancies and sought for revision incorporating the figures as available in the audited statement. The AO later issued notice under Section 25(1) not on the discrepancies in the audit report, but on the question of mis-classification of certain goods, by notice dated 19.12.2015 as is seen from the assessment order produced at Ext.P9 dated 20.2.2016. 6. In the meanwhile Intelligence Officer had already issued summons dated 20.2.2015 for production of books of accounts as also explanation for the discrepancies found by the Data Mining Team, on the purchase details of exempted sales turnover of Rs. 1223.25 lakhs. The actual initiation of penal proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of returns and any revision to be effected will have to be within the period permitted by law as seen from the various provisions and there can be no unconditional right conferred on the assessee to revise the returns at any point of time. Referring specifically to WA No.2541/2017, it is contended that sub-Rule (1B) of Rule 13 prohibits a claim for input tax credit if not made within the time prescribed and in the prescribed form. It is also argued that the assessee if intending to revise the return can only do so on a discrepancy being seen from the audited statement and there cannot be a voluntary application made for revision of returns even if there are no penal proceedings initiated. The revised return so permitted by Section 42(2) has to be filed along with the audited report. This, according to the learned Senior Government Pleader, is the declaration made by the Division bench in M/s.M.M. Enterprises. The dictum as laid down in the aforesaid judgment cannot be extended as a permission for permitting revision at any time. 9. Before we deal with the legal contentions, we cannot but fully endorse the observations made by the learned Single Judge in the judgment in WP(C) N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 22 prohibits any such revision of return if an offense has been detected or other proceedings initiated. Sub-section (10) of Section 22 permits a revised return incorporating the turnover covered in the penal proceedings after the proceedings are finalized and compounded, upon which again the assessment is deemed to be completed subject to the provisions of Sections 24 and 25. The proviso to sub-section (10) provides for a best judgment assessment in accordance with the provisions of Sections 24 and 25 when a pattern of suppression is detected. Sub-section (2) of Section 42 enables a revision of return on detection of any omission or mistake in the annual return with respect to the audited figures. The revised annual return shall be filed along with the audit certificate, accompanied with proof of payment of tax and any interest and penal interest calculated at twice the rate specified under sub-section (5) of Section 31. The proviso to the aforesaid provision also prohibits any revision by a dealer against whom penal action is initiated. Section 79B is a non obstante clause, by which also there is a prohibition in filing a revised return when instances of tax evasion has been de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e turnover sought to be evaded. There was no revised return filed before the finalization of proceedings. Noticing Section 25, it was held that revision of return in the teeth of a proceeding under Section 25 can only be as provided therein; ie: in the event of application of incorrect rate of tax. It was in this context that the revision of return attempted to by the assessee after the finalization of assessment proceedings was not permitted. The Court never found that the revision of return is not permissible unless there is a mistake or omission with respect to the audited statement. There can also be no such finding, since there are other provisions, which we noticed above, permitting or enabling revision of returns. 15. The enabling provision mandates that on a revision of return being attempted to as provided therein, the Assessing Authority is obliged to accept it. At the risk of repetition, it has to be stated that there is no prohibition in attempting a revision of return after the time specified, if no penal proceeding is initiated. What would be required in such circumstances, as was earlier noticed, is a practical and pragmatic approach, wherein the Assessing Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X
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