BHUVANESWARI SUNDARAN Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) Petitioner was a registered dealer under the Kerala Value Added Tax Act (the Act) . On the basis of an inspection conducted at the premises of the petitioner, she was issued a notice for imposing penalty under Section 67 of the Act. On receipt of the notice, the petitioner applied for compounding the offence committed by her under Section 74 of the Act and on the said application, Ext.P3 order was passed by the competent authority permitting the petitioner to compound the offence, after collecting the compounding fee from the petitioner. It is stated by the petitioner that Ext.P3 order was communicated to her on 04.10.2017 and immediately thereupon, on 11.10.2017, the petitioner applied for permission to submit revised return in tune with the admissions made in the compounding proceedings. By Ext.P5 order, the application preferred by the petitioner for submission of revised return was rejected on the ground that the petitioner did not submit the application within the time stipulated in Section 22(10) of the Act. It is stated by the petitioner that immediately thereupon, proceedings have been initiated for revising the assessment of the petitioner for the relevant year also under Section 25(1) of the Act. Ext.P6 is the notice issued in this regard. The petitioner challenges Ext.P5 order as also Ext.P6 notice in this proceedings under Article 226 of the Constitution.

(2.) Heard the learned counsel for the petitioner as also the learned Government Pleader.

(3.) Going by the provisions contained in Section 74 of the Act, compounding takes place on payment of the tax evaded as also compounding fee. As such, it was obligatory for the competent authority to call upon the petitioner to pay the tax evaded also before issuing Ext.P3 order. The petitioner is also at fault as she did not take any steps to pay the tax immediately on receipt of a copy of Ext.P3 order. It appears that the petitioner was contemplating to make online payment of tax and it is presumed that it is on account of the said reason that she straight away applied for permission to submit revised return. True, in terms of sub-section (10) of Section 22 of the Act, where proceedings are finalised under section 74 of the Act on payment of tax due along with the compounding fee, the dealer is entitled to submit revised return incorporating such turnover covered in such proceedings. The said provision, of course, prescribes that such revised return shall be filed within a period of three months from the finalisation of such proceedings. In so far as the petitioner has not paid the tax, it cannot be said that proceedings under Section 74 of the Act stood finalised. As the proceedings under Section 74 is not finalised in favour of the petitioner, I am of the view that the assessing authority has acted illegally in rejecting the application submitted by the petitioner for permission to revise the return relying on subsection (10) of Section 22 of the Act. In so far as the petitioner did not pay the tax evaded, the assessing authority should have granted the permission sought for by the petitioner to submit revised return so that she would have paid the tax evaded also online. In the said view of the matter, the petitioner is entitled to succeed.