KALLIYATH SANITATIONS Vs. STATE TAX OFFICER, MALAPPURAM

JUDGEMENT

(1.) The petitioner has approached this court challenging Ext.P5 which is the modified assessment order for 2015-16 under the Kerala Value Added Tax Act (KVAT Act for short). The petitioner is a dealer in sanitary wares. During assessment year 2015-2016, the petitioner effected certain sales to individual customers who are not business entities. On the premise that some of these goods sold by the petitioner were returned, the petitioner claimed credit of the tax paid. This claim was rejected by the assessing authority in the first instance and the petitioner filed an appeal before the appellate authority who remanded the matter to the assessing authority to determine the claim of the petitioner, after verification of such records as may be produced by the petitioner. The complaint of the petitioner is that the assessing authority has, on remand, rejected the claim of the petitioner stating that the only record available to show return of goods is the credit note counter signed by the customer in question which, according to the assessing officer, was not sufficient to establish that goods have been returned. It was also found that the acknowledgment in the above manner was not permissible.

(2.) The learned counsel appearing for the petitioner submits that in respect of transactions with individual customers, the statutory provisions including the Rules do not make any provision for the manner in which the transaction of return of goods have to be recorded and the only reasonable way in which the petitioner can establish his case is by referring to credit notes counter signed by the customers in question. He refers to Rule 59 of the KVAT Rules in this regard.

(3.) The learned Senior Government Pleader appearing for the respondents submits that the assessing officer had verified the documents submitted by the petitioner and had found certain discrepancies as a result of which the credit notes counter signed by the customers could not be accepted as reliable proof of the fact that the goods sold by the petitioner had been returned to the petitioner. It is submitted that though the Rules do not prescribe a particular mechanism for recording the transaction as above (other than the second proviso to Rule 59) the petitioner cannot have a case that merely on production of credit notes counter signed by the alleged customers in question, the claim must be straight away accepted. It is submitted that the transactions will have to be verified with reference to other supporting documents including stock register, cash register etc., which should establish the return of money paid to the customer in question.