Carrier Air-Conditioning & Refrigeration Ltd. (formerly Carrier Aircon Ltd.) v. Assistant Commissioner, Special Circle-III, Dept. of Commercial Taxes, Ernakulam and State of Kerala

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN** **WEDNESDAY, THE 4TH DAY OF JULY 2018 / 13TH ASHADHA, 1940** **WP(C).No. 2846 of 2018** ## **PETITIONER:** **CARRIER AIR-CONDITIONING & REFRIGERATION LTD., (FORMERLY CARRIER AIRCON LTD), M.G.ROAD, OPPOSITE TO COCHIN SHIPYARD LTD., ERNAKULAM, PIN-682015, REPRESENTED BY ITS DEPUTY MANAGER-LEGAL, SUSHIL KUMAR SHARMA.** **BY ADV.SRI.R.MURALIDHARAN (AROOR)** ## **RESPONDENT(S):** **1. THE ASSISTANT COMMISSIONER, SPECIAL CIRCLE-III DEPARTMENT OF COMMERCIAL TAXES, ERNAKULAM-682 015** **2. STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, DEPARTMENT OF COMMERCIAL TAXES, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, PIN-695001.** **BY SPECIAL GOVERNMENT PLEADER SRI. P.GOVINDAN** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 04-07-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **PBS** ## **WP(C).No. 2846 of 2018 (E)** ## **APPENDIX** **PETITIONER(S)' EXHIBITS EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER PASSED BY THE FAST TRACK TEAM FOR 2002-2003, DATED 10-02-2014. EXHIBIT P2 TRUE COPY OF THE ASSESSMENT ORDER PASSED BY THE FAST TRACK TEAM FOR 2003-2004, DATED 10-02-2014. EXHIBIT P3 TRUE COPY OF THE ASSESSMENT ORDER PASSED BY THE FAST TRACK TEAM FOR 2004-2005, DATED 10-02-2014. EXHIBIT P4 TRUE COPY OF THE COMMON ORDER PASSED BY THE APPELLATE TRIBUNAL IN T.A.NO.24,25 & 26/2014 DT.17-7-2017. EXHIBIT P5 TRUE COPY OF THE COVERING LETTER AND DEMAND DRAFT, SUBMITTED BY THE PETITIONER, DATED 08-04-2014 FOR PAYMENT OF TAX FOR THE YEAR 2003-2004. EXHIBIT P6 TRUE COPY OF THE COVERING LETTER AND DEMAND DRAFT, SUBMITTED BY THE PETITIONER, DATED 08-04-2014 FOR PAYMENT OF TAX FOR THE YEAR 2004-2005. EXHIBIT P7 TRUE COPY OF THE APPLICATION FILED UNDER SEC.23B BY THE PETITIONER DATED 28-09-2017 BEFORE THE 1ST RESPONDENT. EXHIBIT P8 TRUE COPY OF THE ORDER PASSED BY THE 1ST RESPONDENT DATED 29-11-2017 REJECTING EXT.P-7 APPLICATION.** ## **RESPONDENT'S EXHIBITS NIL** **/TRUE COPY/** **PS TO JUDGE** **PBS 10/7/2018** ## **DEVAN RAMACHANDRAN, J.** **...........................................** ## **W.P.(C) No. 2846 of 2018** **.......................................** ## **Dated this the 4[th] day of July, 2018** ## **JUDGMENT** The petitioner, who is stated to be a Company engaged in the manufacture and sale of the Air-conditioners and Centralized Air-conditioning machinery, was assessed under the Kerala General Sales Tax Act, 1963 for the years 2003 – 2004 and 2004 – 2005. Against this assessment, the petitioner Company invoked Section 17D of the KGST Act and filed a Statutory appeal and as a condition for such exercise, they deposited the amount of tax assessed. It is, however, conceded that the appeals were, thereafter, dismissed and that after the appeals were thus dismissed, the petitioner applied to obtain the benefit of a scheme of Amnesty, brought in through the Kerala Finance Act, 2016 and specified under the provisions of the Section 23(B)(1), which as substituted, is as follows: _“1.Notwithstanding anything contained in this Act or in any judgment, decree or order of any Court, Tribunal, or Appellate Authority, as assessee who is in arrears of tax or any other amount due under_ W.P.(C) No. 2846 of 2018 2 _this Act or the Central Sales Tax Act, 1956 (central Act 74 of 1956) relating to the period ending on 31[st] March, 2005, may opt for settling the arrears by availing a complete reduction of the interest on the tax amount and for the amount of penalty and interest thereon._ 2. The petitioner asserts that in view of this amendment, they are entitled to complete waiver of interest with respect to the assessment. They say that in spite of the fact that it is entitled to such benefit, the first respondent/Assistant Commissioner, Special Circle-III, Ernakulam has rejected the request through Ext.P8 order holding that since tax was due in the years 2003-2004, 20042005, the waiver of interest cannot be allowed since what Section 23B(1) provides is only for settling the arrears by availing a complete reduction of interest on the tax amount and for the amount of penalty and interest thereon. 3. The specific contention of the petitioner is that since, as a condition for filing an appeal under Section 17D of the KGST Act, they had already deposited the tax amount assessed, it should be deemed that no tax amount is now outstanding and thus that the benefit under the aforeextracted Section 23B(1) of the Finance Act, 2016 be W.P.(C) No. 2846 of 2018 3 available to him. 4. Sri.P.Govidan, learned special Government Pleader, appearing on behalf of the revenue submits that Ext.P8 order, which is impugned in this writ petition, has been issued validly since, contrary to the claim of the petitioner that there was no sales tax amount pending to be remitted for the years in question, it was found otherwise on verification. According to him, merely because the petitioner had deposited the tax amount assessed while preferring an appeal under Section 17D of the KGST Act, it cannot be construed that the entire tax arrears has been effaced. He relies on the judgment of this Court in _**Babu v. Sales Tax Appellate Tribunal**_ **[2012 (4) KLT 55]** , which is also interestingly relied upon by the petitioner, to show that the condition imposed under Section 17D, to deposit the tax assessed, is only a stipulation for the purpose of entertaining the appeal and that it has to be maintained in a separate account, to await a final decision in the appeal. The learned Government Pleader submits that it is, therefore, ineluctable from this judgment that the payment of tax assessed, as a condition for entertaining an appeal under Section 17D, would not permit the assessee to say that the tax itself has been fully paid. W.P.(C) No. 2846 of 2018 4 5. Sri.R.Muraleedharan, learned counsel appearing for the petitioner also relying on _Babu's case (supra)_ says that this Court has declared the law therein that the condition imposed by Section 17D, to pay the tax amount, means the tax amount assessed and that once an assessee complies with such a condition, it should obviously mean that no further tax amount is due from him. I am afraid that I cannot accede to this submission at all since in _Babu's case (supra)_ , the only issue that was considered and concluded was whether the condition to pay the tax assessed will take in the interest liability also, and a learned Judge of this Court concluded therein that tax assessed means only the tax and not the interest. The contention of the petitioner, as voiced above, has not been considered or concluded in the said judgment. 6. When I evaluate the contentions of the petitioner as afore, it is obvious that the benefit of the Amnesty scheme will be applicable only if there were no sales tax amounts pending to be remitted for the years 2003-2004 and 20042005. In the case at hand, the petitioner had not remitted the sales tax amount but had only deposited it as a condition precedent, under the provisions of Section 17D of the KGST Act, for maintaining an appeal. Consequently, when he made W.P.(C) No. 2846 of 2018 5 the application for the benefit of the Amnesty scheme, the Department adjusted the amounts deposited by him towards interest and quantified the amounts payable under the scheme through Ext.P8. I cannot find anything wrong in the modus adopted taken by the competent Authorities, since it is obvious that the petitioner had permitted the appropriation of the amounts deposited by him only when he had made the application for Amnesty subsequently. 7. In such view of the matter, I cannot find, in any manner, that Ext.P8 is vitiated or that it suffers from any error that would warrant an interference from this Court. 8. At this time, Sri.R.Muraleedharan, learned counsel appearing for the petitioner prays that his client may be given six weeks' time to make payment of the amount shown in Ext.P8 so as to obtain the benefit of the Amnesty scheme. He also prays that an opportunity be given to his client to approach the competent Authority, namely, first respondent/Assistant Commissioner, Special Circle-III, Ernakulam to rework the amounts, since according to him, the computation therein is not accurate. 9. Taking into account the submissions of Sri.R.Muraleedharan, learned counsel appearing for the W.P.(C) No. 2846 of 2018 6 petitioner as afore, I permit the petitioner to approach the first respondent/Assistant Commissioner, Special Circle-III, Ernakulam, with an appropriate representation against the computation in Ext.P8 order within a period of 15 days from the date of receipt of a copy of this judgment. If such a representation is received by the said Authority within the time granted herein, he will pass an appropriate order thereon within a further period of two weeks therefrom and communicate it to the petitioner. The petitioner will thereafter be enjoined to pay the amounts as per Ext.P8 or as per the re-computation, as the case may be, within a further period of two weeks from the date in which he receives the order as directed herein. sd/- **DEVAN RAMACHANDRAN JUDGE** AMV/09/07/2018