AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 87
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....espondent No.3 proposing to cancel Exts.P1 and P2 permissions to pay tax at compounding rate on the ground that the Intelligence Officer (IB), Thiruvananthapuram, has found that the Petitioner did not declare certain purchases in the Returns in Form 10DA filed during the relevant Assessment Years in which the compounding were opted. The Respondent No.3 issued Exts.P4 and P5 Notices invoking Section 8(f)(iv) and/or Section 25(1) of the KVAT Act. 2. The Special Government Pleader (Taxes) appearing for the Respondents filed a Memo dated 19.06.2018 producing the Counter Affidavit filed by the State in W.P.(C) No. 11335/2018 stating that the issues involved in this Writ Petition and in W.P.(C) No. 11335/2018 are identical and praying to adopt the said Counter Affidavit in the present case. It appears that Respondents adopted the Counter Affidavit filed by the State in W.P.(C) No. 11335/2018, since in both W.P.(C) No. 11335/2018 and this Writ Petition, there is a challenge against the constitutional validity of certain provisions of the Kerala State Goods and Services Tax Act, 2017. 3. I heard the learned Senior Counsel for the Petitioner, Sri. A. Kumar, instructed by Adv. Smt. G. ....
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.... applicable to the proceedings. Section 42(3) of the KVAT Act was inserted as per the Kerala Finance Act, 2016, with effect from 01.04.2005. As per Sub Clause (iv) of Section 42(3), if a dealer fails to declare any sale, purchase or interstate stock transfer as evidenced from the documents prescribed under Section 46 available within the Assessing Authority in the sales and purchase lists filed along with the returns, the assessment of such dealer for the relevant year for the purpose of Section 25 shall be treated as pending and the time limit mentioned thereunder shall not be applicable in such cases. In view of the said provision, even assuming that Section 25(1) is applicable, the limitation period therein is not applicable, as the assessment is treated as pending since the Petitioner failed to declare the purchase in the returns. 2. Merely because Exts.P9 and P10 Orders of the Deputy Commissioner preceded Exts.P4 and P5 Notices, it could not be said that the Assessing Authority has no power to proceed under Section 8(f)(iv). Exts.P4 and P5 proceedings are initiated pursuant to a Crime file initiated at the instance of the Intelligence Officer (IB), Thiruvananthapuram.....
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....d subject to certain self-imposed limitations; that resort to that jurisdiction is not intended as an alternative remedy for relief which may be obtained in a suit or other mode prescribed by statute; that ordinarily the Court will not entertain a petition for a writ under Article 226, where the petitioner has an alternative remedy, which without being unduly onerous, provides an equally efficacious remedy; that again the High Court does not generally enter upon a determination of questions which demand an elaborate examination of evidence to establish the right to enforce which the writ is claimed; that the High Court does not therefore act as a court of appeal against the decision of a court or tribunal, to correct errors of fact, and does not by assuming jurisdiction under Article 226 trench upon an alternative remedy provided by statute for obtaining relief; that where it is open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit by entertaining a petition under Art.226 of the Constitution the machinery created under the statute to be bypa....
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....mission of writ petition cannot estop the Court from examining the maintainability of the petition on the ground of the availability of an alternate remedy. It arose from a case in which the High Court refused to entertain the writ petition on account of the existence of an alternate remedy. 12. In Commercial Steel Limited (supra), the Hon'ble Supreme Court held that the existence of an alternate remedy is not an absolute bar to the maintainability of a writ petition under Article 226 of the Constitution; that a writ petition can be entertained in exceptional circumstances where there is a breach of fundamental rights, a violation of the principles of natural justice, an excess of jurisdiction, or a challenge to the vires of the statute or delegated legislation. 13. In Prodair Air Products India Private Limited v. State of Kerala [2023 (3) KHC 1] cited by the learned Senior Counsel for the petitioner, this Court held that where the controversy is a purely legal one and it does not involve disputed questions of fact but only questions of law, then it should ideally be decided by the High Court instead of dismissing the writ petition on the ground of an alternate remedy being a....
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....tary, Cochin Devaswom Board, Thrissur, 2014 (4) KLT 79, which specifically held that the rule of alternate remedy is not an absolute bar but only a self imposed restriction. So exercising my discretionary power applying the relevant inputs in the present case, since the issue to be decided is only the question of limitation on the admitted facts, I deem it fit to decide the writ petition on merits. Relegating the writ petitioner to alternative remedy available under the statute at this distance of time would quite be inappropriate and would amount travesty of justice." 15. The decisions of the Hon'ble Supreme Court cited by the learned Special Government Pleader do not lay down an absolute proposition that when an alternate remedy is there, the remedy by way of writ petition is totally barred. It is purely the discretion of this Court, taking into consideration the totality of the facts and circumstances of the case. I follow the decisions of this Court in Prodair Air Products India Private Limited (supra) and V2 Associates (supra) in this regard. In this case also, the controversy is purely a legal one and it does not involve disputed questions of fact but only questions of law....
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....e to the proceedings for cancellation under Section 8(f)(iv). Even though Section 25(1) is invoked in Exts.P4 and P5 Notices, I am of the view that the same can be ignored if the Respondents are able to substantiate that there is no limitation for initiating proceedings under Section 8(f)(iv) for cancellation of permission for payment of tax at compounding rate. 18. Section 8(f)(iv) does not refer to any limitation period for initiating proceedings for cancellation therein. The question in such case is whether it could be said that there is no limitation period for initiating proceedings under Section 8(f)(iv) for cancellation of permission for payment of tax at compounding rate. 19. In MCP Enterprises v. State of Kerala [(2020) 74 GSTR 103 (Ker)], this Court considered the extent of retrospective operation of Section 42(3) of the KVAT Act. Considering the Scheme of the Act and the Rules, this Court held that there can be inferred a finality to assessment proceedings within a specified period from the end of the assessment year and relying on the decisions in State of Gujarat v. Patel Raghav Natha and Others [AIR 1969 SC 1297], State of Punjab and Others v. Bhatinda District ....
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....ve years could be fixed as the limitation period for initiating the proceedings under Section 8(f)(iv) of the KVAT Act for cancellation of permission to pay tax at compounded rate on the principle that where there is no limitation period prescribed under a taxing statute for taking action against an assessee, a reasonable period of limitation has to be read into the statutory provision by the Court. In such case, even if Section 25(1) referred in Exts.P4 and P5 is ignored, the proceedings initiated on 15.03.2018 with respect to the assessment years 2010-11 and 2011-12 are beyond the limitation period of five years. In view of the contention of the Special Government Pleader that Section 25(1) is not invoked in Exts.P4 and P5 and in view of my finding regarding the limitation period for the initiating the proceedings under Section 8(f)(iv) independently of Section 25(1), there is no need to consider the contention of the Special Government Pleader with reference to Section 42(3). This point is answered in favour of the Petitioner. POINT NO.2 21. The next contention of the learned Senior Counsel for the Petitioner is that the cancellation proceedings under Section 8(f)(iv) are ....
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....ot applicable to Exts.P4 and P5 proceedings. The contention of the learned Senior Counsel for the Petitioner is that since Section 25AA was introduced after the VAT regime was over, no purpose would be served by introducing the provision prospectively. It could only be meant for retrospective operation. 23. Section 25AA(5) provides that if any suppression of turnover of gold is detected with respect to dealers who have paid the compounded tax under Section 8(f), such suppressed turnover alone shall be assessed at the scheduled rates applicable to the goods and in such case the option of compounding for that year shall not be cancelled. If Section 25AA(5) is applicable to the case of the Petitioner, Exts.P4 and P5 proceedings are impermissible. Section 25AA was introduced after the VAT regime was over. There is no purpose for the prospective application of Section 25AA, as the KVAT Act was not existing as on the date of introduction of the said provision. It could have been intended only for retrospective application. Then, how far is the extent of retrospective operation of Section 25AA is the question to be answered. The learned Special Government Pleader cited the Division Ben....
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....ar 2012-2013, is based on the turnover reported for the previous three consecutive years, any suppression, even if established against the Petitioner for the year 2012-2013, will not have any bearing on the tax paid by the Petitioner on compounded basis for the said year since, the turnover of the Petitioner for the year 2012-2013 is not relevant for the purposes of determining his tax liability on compounded basis for that year. The learned Special Government Pleader contended that the said judgment of the learned Single Judge could not be relied on, as in W.A. No.1503/2018 arising from the said judgment, the Division Bench made it clear that the said question of law is open. On going through the judgment dated 23.10.2018 in W.A. No.1503/2018, I find that the Writ Appeal was dismissed consequent to the dismissal of the C.M. Application to condone delay. In such case, the Writ Appeal was not available before the Division Bench to consider the legality of the findings of the learned Single Judge. True, the Divisional Bench has left the question of law open while considering the Application to condone delay. The judgment of the learned Single Judge was not modified in any manner. The....