HYGIENE SOLUTIONS Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) In W.P.(C) No. 2159 of 2016, the petitioner challenges penalty orders issued by the competent authority for the assessment years 2012-13, 2013-14 and 2014-15. The main contention urged by the petitioner is that the petitioner had claimed exemption from payment of tax on the turnover based on form No. 43 issued by the purchaser. However, penalty proceedings had been taken by issuance of notice under section 67(1) of the Kerala Value Added Tax Act, 2003, inter alia, observing that the commodity described in form No. 43 did not come within the purview of section 6(7)(b) of the KVAT Act, 2003. Though the petitioner preferred objection without considering the same penalty orders had been passed by which the petitioner had been called upon to pay double the amount of tax sought to be paid for the respective years. Without challenging the impugned orders by way of statutory revision, petitioner had approached this court, inter alia, contending that the penalty proceedings had been taken without jurisdiction. W.P.(C) No. 24007 of 2016 has been filed challenging notices issued under section 25(1) for the assessment years 2012-13, 2013-14 and 2014-15 on the ground that the proposed assessment is based on the penalty orders issued which are the subject-matter in W.P.(C) No. 2159 of 2016. It is contended that when the very basis of penalty is liable to be set aside, there is no question of the assessing officer further proceeding under section 25(1) after lapse of considerably long time. It is contended that the assessment had been finalized without any objection by, the assessing authority. No steps had been taken under section 22 of the KVAT Act, and now after the penalty orders are issued, fresh notice had been issued under section 25(1), which is without jurisdiction.

(2.) The learned counsel for the petitioner submits that the petitioner is a dealer in cleaning materials which is liable to be exempted under section 6(7)(b) of the KVAT Act and even assuming that the products are taxable under the KVAT Act still penalty proceedings ought not have been taken against the petitioner as the petitioner acted on the basis of form No. 43 issued by the purchasers who are institutions within the Special Economic Zone.

(3.) On the other hand, the learned Government Pleader on the basis of the counter-affidavit submits that the petitioner had not raised any invoice showing the tax payable whereas the petitioner has raised invoices on the purchasers showing nil tax. It is based on the said invoice, the purchasers had issued form No. 43. Therefore, it is a clear case of evasion of tax which has been deliberate and there is justification on the part of the Intelligence Officer who have initiated proceedings under section 67(1) of the Act and passed final orders. It is also stated that there is no legal bar for issuing a fresh notice under section 25(1) of the KVAT Act on the basis of the material made available after investigation. In paragraph 9 of the counter-affidavit it is stated as under: