OZONE GRANITES (P) LTD. Vs. INTELLIGENCE OFFICER

JUDGEMENT

(1.) Petitioner, who owns a metal crusher unit, is a registered dealer under the Kerala Value Added Tax Act (the Act). They sought permission to pay tax for the assessment year 2014-15 at compounded rates under clause (b) of Section 8 of the Act. The second proviso to clause (b) of Section 8 of the Act provides that notwithstanding anything contained in clause (b), dealers having Vertical Shaft Impactor Machines, along with Jaw Crushers, need pay only sixty percent of the tax prescribed for each of such Vertical Shaft Impactor Machine as compounded tax, in addition to the tax payable for the crushing machines. The petitioner had installed a Vertical Shaft Impactor Machine, in addition to crushing machines, in their crusher unit. The output production capacity of the said Vertical Shaft Impactor Machine, according to them, is between 50 to 100 metric tonnes per hour. The compounded tax payable for the said machine under clause (b) of Section 8 of the Act for the relevant years was Rs. 22.5 lakhs and the petitioner, therefore, offered to pay 60% of the same namely, Rs. 13.5 lakhs in terms of the second proviso to clause (b) of Section 8. The said offer was accepted by the competent authority under the Act and the petitioner, accordingly, paid tax for the said machine on that basis.

(2.) On 08.10.2014, there was an inspection by the first respondent at the premises of the petitioner. Later, on 07.11.2014, a notice was issued to the petitioner by the first respondent stating that the output production capacity of the Vertical Shaft Impactor Machine installed at the premises is between 150 to 200 metric tonnes per hour; that the compounded tax payable for such a machine is Rs. 45 lakhs; that the petitioner, therefore, should have paid 60% of Rs. 45 lakhs namely, Rs. 27 lakhs as compounded tax for the said machine and that the petitioner has secured permission to pay tax at compounded rates on false declaration. Ext.P6(1) is the notice issued by the first respondent in this regard. In terms of Ext.P6(1) notice, first respondent has called upon the petitioner to show cause why penalty of Rs. 27 lakhs shall not be realised from them under Section 67(1) of the Act. Ext.P7 is the reply sent by the petitioner to Ext.P6(1) notice on 10.12.2014. The stand taken by the petitioner in the reply was that they have not made any false declaration and that the declaration made by them as regards the output production capacity of the machine is correct. It is also stated by the petitioner in Ext.P7 reply that the output production capacity of the machine was never tested by the first respondent. It is also stated by the petitioner in Ext.P7 that in any event, if the first respondent intends to proceed with the matter further, an opportunity shall be given to them to establish the output production capacity of the machine by conducting test check.

(3.) The first respondent did not pursue further the proceedings pursuant to Ext.P6(1) notice for about a year. By that time, it is stated that the machine became obsolete. The petitioner therefore replaced the same with another machine. Ext.P10 is the request made by them on 07.09.2015 to their assessing authority thereafter for fixing their tax liability for the year 2015-16.