PATEL CARS PRIVATE LIMITED Vs. STATE OF KERALA REPRESENTED BY ITS SECRETARY TO GOVERNMENT TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM 695 001 AND OTHERS

JUDGEMENT

(1.) The petitioner has approached this Court aggrieved by Ext.P17 order of assessment and P18 consequential demand notice issued by the respondents under the Kerala Value Added Tax Act. The grievance of the petitioner in his challenge against Ext.P17 assessment order is essentially that, the assessing authority, while completing the assessment against the petitioner, did not take into account amounts which the petitioner had already disclosed along with the returns, and on which he had paid tax along with the returns. In other words, the contention of the petitioner is essentially that, while computing the differential tax payable by the petitioner, there was a duplication in the amounts that were found payable by the petitioner. It is also the case of the petitioner that in respect of a differential tax demand, based on discrepancies noticed in purchases effected under cover of 8FA declaration, the petitioner was not furnished with the details of the 8FA Forms, the transactions in which, according to the Departments, were not accounted for by the petitioner. It is the case of the petitioner that if details with regard to the objectionable 8FA Forms are provided to the petitioner, he would be in a position to clarify as to whether there was any duplication in the transactions taken for the purposes of levying differential tax on the petitioner. It is pointed out that the said two defects alone account for a turnover of approximately Rs. 6 crores being subjected to tax in the assessment order, and therefore, unless the said turnover is excluded from any tax liability determined against the petitioner, the petitioner would be prejudiced, in that he would have to pay substantial amounts by way of appeal fee and legal benefit fund for the purposes of maintaining an appeal against the assessment order in question.

(2.) I have heard the learned counsel appearing for the petitioner and also the learned Government Pleader appearing for the respondents. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I find force in the contention of the learned counsel for the petitioner that, out of a total turnover of Rs. 238,94,52,099/- that was declared by the petitioner in the Profit and Loss Account of the company, an amount of Rs. 39,20,39,568/- was accepted by the assessing authority as attributable to the turnover of the Mangalore branch of the petitioner. After reducing the latter amount, the figure of Rs. 199,74,12,531/-, which would represent the taxable turnover for the assessment year 2013-2014, was declared by the petitioner in the return, which is produced in this writ petition as Ext.P1. It is stated that in Ext.P1 return, the figure of Rs. 200,30,32,705/- represents the said taxable turnover, which was declared by the petitioner and on which the tax was paid by the petitioner. In the assessment order, however, this turnover was taken as the turnover on which tax was not paid by the petitioner and the differential tax demanded from the petitioner on the said basis. As regards the defects that were alleged against the petitioner on the basis of alleged unaccounted purchases noticed by the Department on the strength of 8FA Forms that were available with the Department, it is the case of the petitioner that the petitioner was not furnished with the details of the 8FA Forms in respect of which the Department had noticed discrepancies. It is the case of the petitioner that if, as in the previous years, the Department had furnished the details of the 8FA Forms to the petitioner, he could have clarified to the Department as regards the possibility of a duplication of the details of transactions taken for the purposes of assessment, and a consequent erroneous inference with regard to suppressed turnover. I notice that the aforesaid two defects, occassioned while completing the assessment, itself account for almost Rs. 6 crores of additional turnover being subjected to assessment in Ext.P17 order. Since there is a dispute raised by the petitioner with reference to documents and on a prima facie examination of the documents it would appear that there has in fact been a duplication of the turnover, I am of the view that the interests of justice would be met by directing the assessing authority to pass a fresh order of assessment, after hearing the petitioner, and after taking note of the discrepancies pointed out by the petitioner in the writ petition. I also note that an effective objection against the demand of differential tax based on discrepancies noticed in respect of 8FA Forms can be preferred only after the petitioner obtains the details of the 8FA Forms, which were found objectionable by the Department. Under the said circumstances, I quash Ext.P17 order and P18 consequential demand notice and dispose the writ petition with the following directions: