High Court of KeralaSingle Judge2013-03-11Writ petition disposed of with directions direc...

M/S. FOODS, FATS AND FERTILIZERS LTD. v. ASSISTANT COMMISSIONER (ASSESSMENT), COMMERCIAL TAXES, SPECIAL CIRCLE I, KOCHI; DEPUTY COMMISSIONER (APPEALS), COMMERCIAL TAXES, ERNAKULAM; INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, CIVIL STATION, KAKKANAD

Case / Petition Number:WP(C).No. 6512 of 2013 (L)

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: ANTONY DOMINIC
Judgment Date: 2013-03-11
Court Decision / Holding: The appellate authority (Second Respondent) is directed to decide Exts.P2–P7 within three months from production of a copy of this judgment. Meanwhile, recovery of tax due under Exts.P1–P1(e) is stayed, subject to the petitioner remitting the differential tax at 3% more, due under Exts.P1–P1(d), within two weeks from today.
Final Disposition: Writ petition disposed of with directions directing expedited adjudication of appeals and stay of tax recovery subject to remittance of the differential tax within two weeks

Parties to the Case

Appellants / Petitioners

M/S. FOODS, FATS AND FERTILIZERS LTD.

Respondents

ASSISTANT COMMISSIONER (ASSESSMENT), COMMERCIAL TAXES, SPECIAL CIRCLE I, KOCHI
DEPUTY COMMISSIONER (APPEALS), COMMERCIAL TAXES, ERNAKULAM
INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, CIVIL STATION, KAKKANAD

Legal Representation & Advocates

Counsels for Petitioners

• SRI.V.V.ASOKAN
• Smt.HAZEENA ABOOBACKER
• SRI.P.RAHUL

Counsels for Respondents

• SR.GOVERNMENT PLEADER SMT.SHOBA ANNAMMA EAPEN

Case Synopsis & Summary

This is a writ petition by M/S. Foods, Fats and Fertilizers Ltd. challenging several KVAT assessment orders for the period April–August 2012 (Exts. P1–P1d) and an assessment for 2009–10 (Ext. P1e). The petitioner contends that the deletion of item 38 from the Third Schedule and its incorporation into the Second Schedule of the Kerala VAT Act mandates a tax rate of 1% for the disputed periods, a rate at which payments had already been made. The Respondents submit that the amendment does not reduce the tax rate; they rely on SSD Oil Mills Company Limited v. State of Kerala and the schedule entries to argue for a higher rate. The Court notes that in many similar cases, stays were granted on payment of tax at 4% and that for 2009–10 the petitioner has already remitted 4% and no further recovery should be pursued pending Ext. P7. On the April–August 2012 assessments, the court refrains from deciding the precise rate in isolation, directing the appellate authority to decide the appeals within three months. Meanwhile, recovery of tax due on Exts. P1–P1e is stayed, subject to the petitioner remitting the differential tax at 3% more under Exts. P1–P1d within two weeks. The petition is disposed with these directions.

Provisions of Law Cited

KVAT Act – Third Schedule (Item 38)KVAT Act – Second ScheduleKerala Revenue Recovery Act – Section 7

Submissions & Arguments

Contentions of Appellants / Petitioners

Petitioner contends that deletion of item 38 from the Third Schedule and its incorporation into the Second Schedule of the KVAT Act makes the correct tax rate 1% for April–August 2012, with 4% paid only as a remnant of the older regime. It submits that the appellate authority should adjudicate Exts.P2–P7 within three months, and that recovery for 2009–10 should be withheld since 4% was already remitted. The petitioner also relies on amendments and SSD Oil Mills Co. Ltd. to justify lower rates, seeking protection against coercive recovery pending appeal.

Contentions of Respondents

The respondents argue that the amendment does not reduce the payable tax rate and that the higher rate applies, citing the Third and Second Schedule entries and SSD Oil Mills Co. Ltd. as authority for a higher rate. They maintain that recovery may proceed; however, stay orders have been granted in similar cases and the court should safeguard revenue while appellate clarifications are sought.

Cited Precedents (6)

Case Name	Citation	Treatment	Explanation
SSD Oil Mills Company Limited v. State of Kerala	[(2011) 37 VST 594]	Mentioned Only	Cited by the government pleader to support higher tax rate; not treated as binding authority by the court in this matter.
W.A.No.743/2012	W.A.No.743/2012	Mentioned Only	Judgment cited in Ext.P-9; referenced as authority but not expressly followed or distinguished.
WPC No.22260/2012	WPC No.22260/2012	Mentioned Only	Cited as an existing order; used as reference for stay/conduct, not as binding principle.
STA No.26/2006, Bombay High Court	STA No.26/2006	Mentioned Only	Cited in Ext.P-11 as a Bombay High Court decision; referenced without explicit doctrinal adoption.
WPC No.17916/2012	WPC No.17916/2012	Mentioned Only	Judgment cited in Ext.P-17; treated as reference rather than binding precedent.
WPC No.17917/2012	WPC No.17917/2012	Mentioned Only	Judgment cited in Ext.P-18; treated as reference rather than binding precedent.

Diagnostic Tool

Beta

Does this judgment govern your specific facts?

Don't risk relying on a distinguishable precedent. Enter your facts or proposition below. We will test it against M/S. FOODS, FATS AND FERTILIZERS LTD. v. ASSISTANT COMMISSIONER (ASSESSMENT), COMMERCIAL TAXES, SPECIAL CIRCLE I, KOCHI; DEPUTY COMMISSIONER (APPEALS), COMMERCIAL TAXES, ERNAKULAM; INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, CIVIL STATION, KAKKANAD and instantly map out authorities that support, challenge, or govern your position.

Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE ANTONY DOMINIC** **MONDAY, THE 11TH DAY OF MARCH 2013/20TH PHALGUNA 1934** ## **WP(C).No. 6512 of 2013 (L)** **---------------------------** **PETITIONER(S):** **--------------------------** **M/S. FOODS, FATS AND FERTILIZERS LTD., PUSHPAKA ROAD, VADUTHALA, KOCHI - 23, REPRESENTED BY ITS GENERAL MANAGER (MARKETING)SRI.S.MADHUSOODANAN.** **BY ADVS.SRI.V.V.ASOKAN SMT.HAZEENA ABOOBACKER SRI.P.RAHUL** **RESPONDENT(S):** **----------------------------** **1. ASSISTANT COMMISSIONER (ASSESSMENT), COMMERCIAL TAXES, SPECIAL CIRCLE I, KOCHI - 682 015.** **2. THE DEPUTY COMMISSIONER (APPEALS), COMMERCIAL TAXES, ERNAKULAM - 682 015.** **3. INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, CIVIL STATION, KAKKANAD - 682 021.** **R1 TO R3 BY SR.GOVERNMENT PLEADER SMT. SHOBA ANNAMMA EAPEN** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11-03-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **Kss** ## **WPC.NO.6512/2013 L** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXT.P-1 TRUE COPY OF THE ASSESSMENT ORDER FOR THE PERIOD - APRIL 2012 DTD. 30/11/2012.** **EXT.P1(a) TRUE COPY OF THE ASSESSMENT ORDER FOR THE PERIOD - MAY 2012 DTD. 30/11/2012.** - **EXT.P1(b) TRUE COPY OF THE ASSESSMENT ORDER FOR THE PERIOD - JUNE 2012 DTD. 30/11/2012.** **EXT.P1(c) TRUE COPY OF THE ASSESSMENT ORDER FOR THE PERIOD - JULY 2012 DTD. 30/11/2012.** - **EXT.P1(d) TRUE COPY OF THE ASSESSMENT ORDER FOR THE PERIOD - AGUGUST 2012 DTD. 30/11/2012.** **EXT.P1(e) TRUE COPY OF THE ASSESSMENT ORDER FOR THE AY - 2009-10 DTD. 30/11/2012.** **EXT.P-2 TRUE COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE PERIOD - APRIL 2012 DTD.13/2/2013. EXT.P2(a) TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE PERIOD - APRIL 2012 DTD. 13/02/2013.** - **EXT.P-3 TRUE COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE PERIOD - MAY 2012 DTD.13/2/2013.** **EXT.P3(a) TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE PERIOD - MAY 2012 DTD.13/02/2013.** **EXT.P-4 TRUE COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE PERIOD - JUNE 2012 DTD.13/2/2013.** - **EXT.P4(a) TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE PERIOD - JUNE 2012 DTD. 13/2/2013.** **Kss** **..2/-** **..2....** ## **WPC.NO.6512/2013 L** **EXT.P-5 TRUE COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE PERIOD - JULY 2012 DTD.13/2/2013. EXT.P5(a) TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE PERIOD - JULY 2012 DTD. 13/2/2013. EXT.P-6 TRUE COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE PERIOD - AUGUST 2012 DTD. 13/2/2013. EXT.P6(a) TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE PERIOD - AUGUST 2012. DTD. 13/2/2013. EXT.P-7 TRUE COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE AY - 2009 - 2010 DTD. 13/2/2013. EXT.P7(a) TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE AY - 2009 - 2010 DTD. 13/2/2013. EXT.P-8 TRUE COPY OF THE DEMAND NOTICE ISSUED UNDER SECTION 7 OF KERALA REVENUE RECOVERY ACT DTD. 1/3/2013. EXT.P8(a) TRUE COPY OF THE DEMAND NOTICE ISSUED UNDER SECTION 7 OF KERALA REVENUE RECOVERY ACT DTD. 1/03/2013. EXT.P8(b) TRUE COPY OF THE DEMAND NOTICE ISSUED UNDER SECTION 7 OF KERALA REVENUE RECOVERY ACT DTD. 1/03/2013. EXT.P8(c) TRUE COPY OF THE DEMAND NOTICE ISSUED UNDER SECTION 7 OF KERALA REVENUE RECOVERY ACT DTD. 1/03/2013. EXT.P8(d) TRUE COPY OF THE DEMAND NOTICE ISSUED UNDER SECTION 7 OF KERALA REVENUE RECOVERY ACT DTD. 1/03/2013. EXT.P8(e) TRUE COPY OF THE DEMAND NOTICE ISSUED UNDER SECTION 7 OF KERALA REVENUE RECOVERY ACT DTD. 1/03/2013. Kss ..3/-** **..3....** ## **WPC.NO.6512/2013 L** **EXT.P-9 TRUE COPY OF THE JUDGEMENT IN W.A.NO.743/2012 DTD. 10/04/2012.** - **EXT.P-10 TRUE COPY OF THE JUDGEMENT IN WPC NO.22260/2012 OF THIS HON'BLE COURT DTD. 26/09/2012.** - **EXT.P-11 TRUE COPY OF THE JUDGEMENT IN STA NO.26/2006 OF THE BOMBAY HIGH COURT DTD. 4/3/2011.** - **EXT.P-12 TRUE COPY OF THE CLARIFICATIONS ISSUED BY THE CHIEF FOOD INSPECTOR, KOCHI DTD. 16/04/2006.** - **EXT.P-13 TRUE COPY OF THE ORDER OF THE AUTHORITY FOR CLARIFICATION COMMERCIAL TAXES, ANDHRA PRADESH DTD. 10/11/2011.** - **EXT.P-14 TRUE COPY OF THE ORDER OF THE COMMISSIONER, COMMERCIAL TAX DEPARTMENT OF TRADE AND TAXES, NEW DELHI DTD. NIL.** - **EXT.P-15 TRUE COPY OF THE ORDER OF THE COMMISSIONER, COMMERCIAL TAX DEPARTMENT OF TRADE AND TAXES, NEW DELHI DTD.6/9/2012.** - **EXT.P-16 TRUE COPY OF THE TECHNICAL NOTE ON INDUSTRIAL MARGARINE AND TABLE MARGARINE DTD. NIL.** - **EXT.P-17 TRUE COPY OF THE JUDGEMENT IN WPC NO.17916/2012 DTD. 1/08/2012.** - **EXT.P-18 TRUE COPY OF THE JUDGEMENT IN WPC NO.17917/2012 DTD. 1/08/2012.** ## **RESPONDENTS' EXHIBITS: N I L** **/TRUE COPY/** ## **P.A.TO JUDGE** **Kss** ## **ANTONY DOMINIC,J -------------------------------W.P.(C) No.6512 of 2013** ## **------------------------------------Dated this the 11[th] day of March, 2013** ## **JUDGMENT** Exts.P1 to P1(d) are the assessment orders passed against the petitioner under the KVAT Act for the period April to August, 2012. Ext.P1(e) is the assessment order passed for the year 2009-2010. Challenging Exts.P1 to P1(d) assessment orders, the petitioner has filed Exts.P2 to P6 appeals and against Ext.P1(e) assessment order, the petitioner filed Ext.P7 appeal. Along with the appeals, the petitioner has filed stay petitions also. The appeals and the stay petitions are pending. In the meanwhile, recovery proceedings are initiated for recovery of the tax due. It is therefore, this writ petition is filed. 2. Reading of the assessment orders show that according to the Assessing Officer, tax is to be levied at the rate of 13.5% and Ext.P1(e) shows that for the period 2009-2010, the petitioner has remitted tax at 4%. W.P.(c) No.6512 of 2013 : 2 : Insofar as the period April to August, 2012 is concerned, the case of the petitioner is that item 38 of the Third Schedule has been deleted and the entries in the said item have been incorporated in the Second Schedule and that therefore, tax payable is only at 1%, which has been paid. 3. However, relying on the judgment of this Court in **SSD Oil Mills Company Limited v. State of Kerala [(2011) 37 VST 594]** and the entries in the Third Schedule as also the Second Schedule, the learned Government Pleader contended that in spite of the amendment relied on by the counsel for the petitioner, tax payable is not at 1% but is at the higher rate. 4. In several cases of this nature, this Court granted stay on payment of tax at 4% by the concerned assessee. Insofar as Ext.P1(e) assessment order for the year 2009-2010 is concerned, the petitioner has already remitted tax at 4% and therefore, there is no reason to W.P.(c) No.6512 of 2013 : 3 : recover the balance tax due from the petitioner for 20092010 pending disposal of Ext.P7 appeal. Insofar as Exts.P1 to P1(d) assessment orders for the period April to August, 2012 are concerned, the dispute between the parties is mainly regarding the rate of tax that is applicable and the impact of the amendment to the schedules to the Act as noticed above. That is a matter for the appellate authority to consider and pending such consideration, I feel, the petitioner should remit tax at 4%. Therefore, I dispose of this writ petition with the following directions: 1. The appellate authority, the second respondent, shall pass orders on Exts.P2 to P7 appeals. This shall be done within three months from the date of production of a copy of this judgment. 2. In the meanwhile, recovery of the tax due under Exts.P1 to P1(e) assessment orders will stand stayed subject to the petitioner remitting tax, W.P.(c) No.6512 of 2013 : 4 : the differential tax at 3% more, due under Exts.P1 to P1(d) assessment orders. Such remittance shall be made by the petitioner within two weeks from today. Sd/- **ANTONY DOMINIC, JUDGE** ln