Independent penalty under KVAT can proceed for incorrect returns, and writ relief is refused where statutory appeal remains available.

Under the KVAT self-assessment scheme, an assessee must file a correct return, and failure to revise a return after discrepancies are disclosed can attract independent penalty proceedings under Section 67. The court noted that such penalty action need not wait for reassessment under Section 25(3), because the intelligence authority may proceed on detected discrepancies and the absence of a timely revised return. Writ interference under Article 226 was declined because the assessee had an adequate statutory appellate remedy and could raise all factual contentions, including the plea that no tax evasion occurred. Permission to file a belated revised return was also rejected once penalty proceedings had begun.

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Issues: (i) Whether penalty proceedings under Section 67 of the Kerala Value Added Tax Act, 2003 could be initiated independently of reassessment proceedings under Section 25(3) of the Kerala Value Added Tax Act, 2003. (ii) Whether interference under Article 226 of the Constitution of India was warranted against the penalty proceedings, including on the plea for permission to file a revised return at a later stage.

Issue (i): Whether penalty proceedings under Section 67 of the Kerala Value Added Tax Act, 2003 could be initiated independently of reassessment proceedings under Section 25(3) of the Kerala Value Added Tax Act, 2003.

Analysis: The self-assessment scheme under the KVAT Act places an obligation on the assessee to file a correct return. The detection of discrepancies from the audited statement, coupled with the failure to avail the statutory opportunity to revise the return, justified action under the penalty provision. Section 67 operates independently of reassessment under Section 25(3), and the Intelligence Officer was not required to await reassessment by the Assessing Officer before proceeding.

Conclusion: The penalty proceedings were maintainable independently of Section 25(3), and the objection based on want of jurisdiction failed.

Issue (ii): Whether interference under Article 226 of the Constitution of India was warranted against the penalty proceedings, including on the plea for permission to file a revised return at a later stage.

Analysis: The audited statement had disclosed the discrepancies long before the penalty notice, yet no revised return was filed within time. Once penalty proceedings had been initiated, there was no basis to grant permission for a belated revised return. The circumstances did not justify writ interference, and the assessee was left to pursue the statutory appellate remedy on all factual contentions, including any plea that no tax evasion had actually occurred.

Conclusion: Interference under Article 226 was declined, and the request to permit a belated revised return was rejected.

Final Conclusion: The challenge to the penalty proceedings failed, and the assessee was relegated to the statutory appellate remedy on the merits of the penalty order.

Ratio Decidendi: Under the KVAT self-assessment regime, failure to file a correct return or to revise a return on discovery of discrepancies can attract independent penalty proceedings under Section 67, and writ interference is not justified where the assessee has an adequate statutory remedy.

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