TaxTMI 
TaxTMI 
2021 (11) TMI 892
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.... V.S. SHEREEJ BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON SRI.MAHESH V.MENON Bechu Kurian Thomas, J. When the compounded tax for dealers in ornaments or articles of gold, or other metals were retrospectively amended for the year 2011-12, the dealers raised a challenge against the collection of differential tax. Several writ petitions were filed before this Court. The learned Single Judge allowed all the writ petitions after concluding that the differential tax attempted to be collected from the writ petitioners for the assessment year 2011-12 was legally unsustainable and accordingly quashed all the impugned orders/demand notices. The department has come up in these appeals contending that the retroactive operation of the compounded rate of tax was within the scope of the Government's authority and the consequential collection of differential tax was legally valid. 2. This batch consists of 13 writ appeals and two writ petitions. W.A.No.2312/2015 is treated as the main appeal. The questions arising for consideration are common and hence we heard all the writ appeals and the writ petitions together. Since the circumstances are similar in all these cases, we confi....
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.... that the provisions of the Second Bill which resulted in Finance Act 16 of 2011 shall not affect the vested rights accrued to the dealer on account of the order permitting it to pay tax at compounded rates on the basis of the First Bill. 6. By the judgment under challenge, the learned Single-Judge held that once the assessee opts to pay tax at compounded rates and the said option was accepted, there came into existence a contract which neither side could resile from. It was also held that the validation clause in Act 16 of 2011 made it legally impermissible and unfair to proceed against the dealers with the demand for differential tax. As mentioned earlier, the said judgment is challenged by the Department. The writ petitions connected with this batch of writ appeals are those which were omitted to be tagged along with the connected cases before the learned Single Judge. They raise the same issue as in the other writ petitions and are hence being considered along with the appeals. 7. We heard the learned Senior Government Pleader Sri. Mohammed Rafiq on behalf of the appellant. We also heard Senior Advocate Raju Joseph, Adv. Harishankar V. Menon and Adv. Anil Kumar on behalf ....
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.... payable for 2009-10 shall be notionally re-determined on the basis of output tax for determining the tax liability for 2010-11; (v). Where a dealer had paid tax under this clause for the previous year, the tax payable for the succeeding year under this clause shall be, (a). One hundred and five percent of such tax paid during the previous year, in case their turnover for the above goods for the preceding year was rupees ten lakhs or below; (b). one hundred and ten percent of such tax paid during the previous year, in case their turnover for the above gods for the preceding year was above rupees ten lakhs and up to rupees forty lakhs; (c). one hundred and fifteen percent of such tax paid during the previous year, in case their turnover for the above goods for the preceding year was above rupees forty lakhs and up to rupees one crore; and (d) one hundred and twenty five percent of such tax paid during the previous year, in case their turnover for the above goods for the preceding year exceeded rupees one crore : Provided that the tax payable under this sub-clause by the dealers covered under Explanation 6 of this clause shall be ....
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....y lakh and up to rupees one crore; and (d) at one hundred and twenty five percent of such taxpaid during the previous year, in case their turnover for the above goods for the preceding year exceeded rupees one crore: Provided that the tax payable under this sub-clause by the dealers covered under Explanation 6 of this clause shall be at the appropriate percentage of tax mentioned in (a), (b), (c) or (d) above, of the tax re-determined under the said Explanation. (ii) 1.25% of the turnover of sales of the goods covered under this clause, for the previous year."; 11. The above changes for clarity are reduced into a tabular column as follows: Annual turnover of the preceding year For new optees as on 31-03-2011 Clause (v) as on 31-03-2011 From 01-04-2011 by First Bill From 01-04-2011 by Act 16/2011. Less than 10 lakhs 115% of the highest tax in the preceding 3 years 105% of previous years tax Same amount Same amount or 1.25% of turnover whichever is higher Between 10 lakhs and 40 lakhs 120% of the highest tax in the preceding 3 years 110% of previous years tax 105% of previous years tax 105% or 1.25....
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....nder the Kerala Surcharge on Taxes Act, 1957 (11 of 1957) or under the Kerala Tax on Luxuries Act, 1976 (32 of 1976) or under the Kerala Value Added Tax Act, 2003 (30 of 2004) (hereinafter referred to as the 'respective Acts'), as they stand amended by the said Bill, shall be deemed to be and to have always been, for all purposes, validly and effectively done or taken under the provisions of the respective Acts, as if the said amendments had been in force at all material times. (2) Notwithstanding anything contained in the respective Acts during the period from 1st April, 2011 to the 19th day of July,2011 during which the declared provisions contained in the said Bill was in force, anything done or any section taken by virtue of the said provisions of the said Bill, shall be deemed to have been validly done or taken under the respective Acts and no action shall lie against any dealer or authority on the ground of short levy or refund of excess tax or duty and tax or duty collected, if any, by a dealer or an authority, as the case may be, shall be paid over to the Government. 15. The legislative power of the State Legislature to amend the Act with retrospective e....
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....sessment) [(2014) 71 VST 110 (SC)] is relevant for the said proposition. However, in the instant case, the situation is different. The commercial tax officer never proposed to resile from the permission granted for payment of tax at compounded rates. The assessing officer only demanded the differential tax brought about by the retrospective operation of the amended provisions. Since it is no longer res integra that State is entitled to bring in tax with retrospective operation, there is no legal embargo in demanding the differential tax, even in respect of compounded tax, brought into the amendment with retrospective effect. At this juncture, we remind ourselves that none of the dealers have challenged the rates of tax imposed by the amended provision. As long as there is no challenge against the amended provisions, it was incumbent for the assessing officers to recover the differential rate of tax. 19. The second limb of the argument of the dealers which found favour with the learned Single Judge and which is certainly impressive in a first blush is that in view of the validation clause brought in as Section 12 to Finance Act 16 of 2011, the commercial tax officers were not ent....
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....o the lapse of the Bill and the cessation of the force of law of the declared provisions of the First Bill. This part overcomes the lapse of the the Bill caused by Article 196(5) of the Constitution. The first sub-clause of the validation section confers authority of law, post facto, for the imposition and collection of tax under the First Bill. Without the aforesaid validation clause, the provisions of the First Bill, which had already come into effect on account of the declaration under the Kerala Provisional Collection of Revenues Act, 1985, would have had no force of law due to its subsequent lapse. The second sub-clause of the validation section after giving validation to the acts done or taken under the taxing statutes, gives an immunity to the dealer as well as the authorities under the taxing statutes from any action being taken on the ground of short levy or excess tax or duty collected. The words "short levy or excess tax or duty collected" as appearing in the validation clause are with reference to the First Bill. It is not referring to the short levy or excess tax that may arise on account of the change of rate of tax brought in by Act 16 of 2011. It would be incongruou....