TaxTMI 
TaxTMI 
2024 (10) TMI 1744
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.....2018 is in order. (ii) Whether on the facts and in the circumstances of the case, the Appellate Tribunal is erred in not appreciating the fact that the claim of sales return in the case of end customers is supported by statements as prescribed under rule 59 of the KVAT Rules 2005 which are produced before the assessing authority. (iii) Whether on the facts and in the circumstances of the case, the Appellate Tribunal went wrong in interpreting section 25AA with respect to the suppression of sales turnover and allowing corresponding claim of input tax claim from the purchase of registered dealers. (iv) Whether on the facts and in the circumstances of the case, the Appellate Tribunal is erred in not considering the duplication of assessment of sales return while calculating the turnover as well as in the computation of tax due. During the course of the proceedings, it was accepted by the learned counsel that questions of law nos.(ii), (iii) and (iv) would have to be answered against the petitioner/assessee and in favour of the Revenue. However, the answer to question (i) above would determine whether or not the petitioner would be liable to pay any amoun....
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....e or the deduction in respect of which has been wrongly made or input tax or special rebate credit that has been wrongly availed of and assess the tax payable on such turn over or disallow the input tax or special rebate credit wrongly availed of, after issuing a notice on the dealer and after making such enquiry as it may consider necessary: Provided that before making an assessment under this subsection the dealer shall be given a reasonable opportunity of being heard. Provided further that where the escapement is due to the application of incorrect rate of tax, no assessment 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 period for the completion of assessments including those subjected to extension under section 25B which expired on 31st March, 2015, shall be extended up to 31st March, 2016. 5. The provision was amended through the Kerala Finance Act, 2017 with effect from 01.04.2017 when the period of limitation under Section 25(1) for proceeding to deter....
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....e argument of counsel, placing reliance on the principles of statutory interpretation was separately dealt with as follows: "16. Before parting with the issues, I must also address the arguments of learned counsel for the petitioners that, going by the well-settled principles of statutory interpretation, a proviso cannot enlarge the scope of the main provision to which it is appended. The contention is essentially that, inasmuch as the provisions of Section 25(1) of the KVAT Act enlarged the period for re-opening assessments from five years to six years only with effect from 01.04.2017, the third proviso could not be seen as permitting a re-opening of past assessments beyond the five-year period of limitation prescribed under the unamended Act. The legal position with regard to the principles that must guide an interpretation of a proviso have been pithily stated in the decision of the Supreme Court in S.Sundaram Pillai & Ors. v. V.R.Pattabiraman & Ors. - [(1985) 1 SCC 591] as follows: "A proviso may serve four different purposes: 1. Qualifying or excepting certain provisions from the main enactment; 2. It may entirely change the very concept of ....
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....curs in sub-Section (1) of Section 25 as well as the third proviso to the said sub-Section as amended in Finance Act, 2017. No doubt, in both the provisions, the expression used is "proceed to determine." The said expression must be considered in light of the words that occur prior to and subsequent to the said expression. Under sub-Section (1) of S.25, the intention of the use of the expression "proceed to determine" is in the context of initiation of proceedings at any time within five years (now six years after the 2018 amendment) from the last date of the year to which the return relates. The object and purpose is that there cannot be a belated initiation of proceedings and at the whims and fancies of the Department so as to re-open stale returns, which had already been concluded under the provisions of the said Act. However, the object of the proviso which also uses the words "proceed to determine" must be in the context of completion of the Assessment which had already been initiated in accordance with sub-Section (1) to S.25 within the time-frame as prescribed therein. 17. However, it is now contended on behalf of the appellants by learned Senior Counsel, Shri Dwive....
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....r at a time and the entire third proviso being substituted every successive year under the respective Finance Acts is with a view to mandate the Department to complete the re-opened assessment in a timely manner and within the period stipulated under the said proviso to sub-Section (1) of the S.25 of the KVAT Act. Therefore, the department is not right in contending that the expression 'proceed to determine' in the third proviso gives a lease of life or an extension of the period of limitation by one year at a time for 'initiation' of the reassessment proceeding under sub-section (1) of S.25 of the Act. Such an interpretation would lead to absurdity as a proviso cannot militate against the intention of the main provision in sub-section (1) of S.25 and thus a proviso cannot extend the limitation period which is fixed under the main provision. The normal function of a proviso is to exempt something out of the provision or to qualify something enacted therein which, but for the proviso, would be within the purview of the provision. As a general rule, a proviso is added to an enactment to qualify or create an exception to what is in the enactment and ordinarily, a provi....
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....9 STC 493 (SC)]; Sales Tax Officer and another v. Messers Sudarsanam Iyengar and Sons - [(1969) 2 SCC 396]; Tirur Medical Stores v. State of Kerala - [(1978) 42 STC 118 (Ker)]; Cholayil Private Limited v. Assistant Commissioner (Assessment) - [2015 (4) KLT 516 (FB)]; Binu Gopinath v. State of Kerala - [2018 (2) KLT 991] and Binu Gopinath v. State of Kerala - [2018:KER:21549]. 12. We have considered the rival submissions and have once again examined the amended provisions of Section 25(1) of the KVAT Act and the 3rd proviso thereto. Reading the said provisions, in the light of the judgment of the Supreme Court in Cholayil (supra) above, we find that there is an aspect that was overlooked earlier when Baiju (supra) was decided. This is with regard to the different phraseology that is used in Section 25(1) of the KVAT Act and the 3rd proviso thereto. In particular, while the phraseology used in Section 25(1) of the KVAT Act is "at any time within six 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 ....... and assess the tax payable on such turnover ...... after issui....