High Court of KeralaSingle Judge2023-08-01Writ petition disposed of with directions to fi...

M/S. LAL STEELS PRIVATE LTD. NIDA, KANJIKODE, PALAKKAD v. THE COMMERCIAL TAX OFFICER (IN-CHARGE), OFFICE OF THE ASST. COMMISSIONER (ASSESSMENT), COMMERCIAL TAXES SPECIAL CIRCLE, PALAKKAD-678001; and THE INSPECTING ASST. COMMISSIONER, DEPARTMENT OF COMMERCIAL TAXES, PALAKKAD-678001

Case / Petition Number:WP(C) No.39573 of 2015

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: SHOBA ANNAMMA EAPEN
Judgment Date: 2023-08-01
Court Decision / Holding: The writ petition is disposed of with directions to approach the statutory authority by way of appeal under Section 55 of the KVAT Act within one month of receiving a certified copy of the judgment. The Appellate Authority should consider the appeal with leniency toward stay petitions and delays due to pendency. The petitioner must move within one month for staying recovery, and the appellate authority shall verify the original tax invoices under Section 11(9) and pass orders within three months thereafter. Recovery under Ext. P5 shall be kept in abeyance for two months from the date of judgment. The petitioner shall be allowed to produce all supporting documents for the assessment year 2012-2013 during the appeal, and the appellate authority shall examine the facts and pass a reasoned order within the specified period.
Final Disposition: Writ petition disposed of with directions to file statutory appeal; recovery stayed temporarily; original invoices to be verified; documents to be produced; orders to be passed by the appellate authority within three months.

Parties to the Case

Appellants / Petitioners

M/S. LAL STEELS PRIVATE LTD. NIDA, KANJIKODE, PALAKKAD, represented by its Director, Bharath Kumar Tantia

Respondents

THE COMMERCIAL TAX OFFICER (IN-CHARGE) OFFICE OF THE ASST.COMMISSIONER (ASSESSMENT), COMMERCIAL TAXES SPECIAL CIRCLE, PALAKKAD-678001
THE INSPECTING ASST.COMMISSIONER, DEPARTMENT OF COMMERCIAL TAXES, PALAKKAD-678001

Legal Representation & Advocates

Counsels for Petitioners

• Sri. Harisankar V. Menon
• Sri. Mahesh V. Menon
• Smt. Meera V. Menon

Counsels for Respondents

• Adv. V.K. Shamsudheen – Senior Government Pleader

Case Synopsis & Summary

The petitioner, Lal Steels Private Ltd., a private limited company engaged in the manufacture and sale of iron and steel products, challenged a KVAT assessment for the year 2012-2013. After forms 13 and 13A and the balance sheet were supplied, Ext. P3 issued under Section 25(1) prompted Exts. P4 and P4A (reconciliation) from the petitioner. The 1st respondent finalized the proceedings by Ext. P5, disallowing input tax credit amounting to Rs. 32,63,142, a figure contested by the petitioner who asserts improper consideration of reconciliation and the failure to verify the input tax credit against original tax invoices as required under Section 11(9) of the KVAT Act. The respondent contends that the Ext. P5 order explains the reconciliation and the 13 & 13A statements’ lack of endorsement for the claim. The petitioner stresses that all relevant records were produced and that Section 11(9) obligations were not satisfied. The petition invokes writ review, but the court ultimately directs an appeal before the statutory authority under the KVAT Act, noting the availability of an efficacious alternative remedy and acknowledging no established violation of natural justice. The matter thus culminates in a procedural remedy rather than quashing Ext. P5. The court’s approach aligns with the principle that remedies under the KVAT Act should be pursued in the statutory appellate process where appropriate.

Provisions of Law Cited

Section 25(1) of the Kerala Value Added Tax Act, 2003Section 11(9) of the Kerala Value Added Tax Act, 2003Section 55 of the Kerala Value Added Tax Act, 2003

Legal Doctrines & Maxims

Doctrine of efficacious alternative remedy (high court should refrain from entertaining writ petitions where an adequate statutory remedy exists)

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that Ext. P3 notice under Section 25(1) was followed by Exts. P4 and P4A with a reconciliation statement, and that the 1st respondent finalised the proceedings through Ext. P5 without proper consideration of these materials. It is argued that the disallowance of input tax credit of Rs. 32,63,142 arises from disputes in respect of Form 13 and 13A; the petitioner asserts that the reconciliation statement and Form 13/13A details (the differences) were clearly explained in Ext. P4 and the original documents were not properly verified under Section 11(9). It is further argued that the remedy under KVAT Act Section 55 (statutory appeal) is available and should be pursued, rather than direct judicial review, especially since the petitioner was given a hearing and is not shown to have been denied natural justice. The remedy under the KVAT Act is adequate and efficacious, and the High Court should defer to this alternate route unless exceptional circumstances exist.

Contentions of Respondents

The respondents maintain that Ext. P5 provides reasons for the reconciliation discrepancy and that Form 13 & 13A did not endorse the claim; the reconciliation statement (Ext. P4(A)) explains the ground for the differences and the order is grounded on those grounds. They argue that the petitioner had an opportunity of hearing and that the statutory remedy of appeal under Section 55 is available; the scope of judicial intervention without availing the statutory remedy is limited. The respondents emphasize that an adequate remedy exists through the appellate authority under KVAT Act and that the High Court should not entertain the petition where such remedy is available, except in exceptional circumstances.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Genpact India Private Limited v. Deputy Commissioner of Income Tax and Another	Civil Appeal No. 8945 of 2019 (SLP No. 20728 of 2019)	Positive	Cited to support the proposition that the High Court should refrain from interfering when an efficacious alternative remedy is available, thereby guiding the Court to direct an appeal under the KVAT Act instead of continuing with writ jurisdiction.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN TUESDAY, THE 1[ST] DAY OF AUGUST 2023 / 10TH SRAVANA, 1945** ## **WP(C) NO. 39573 OF 2015** ## **PETITIONER:** M/S. LAL STEELS PRIVATE LTD. NIDA, KANJIKODE, PALAKKAD, REPRESENTED BY ITS DIRECTOR, BHARATH KUMAR TANTIA. BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON SRI.MAHESH V.MENON ## **RESPONDENTS:** 1 THE COMMERCIAL TAX OFFICER (IN-CHARGE) OFFICE OF THE ASST.COMMISSIONER (ASSESSMENT), COMMERCIAL TAXES SPECIAL CIRCLE, PALAKKAD-678001. 2 THE INSPECTING ASST.COMMISSIONER DEPARTMENT OF COMMERCIAL TAXES, PALAKKAD-678001. ADV.V.K.SHAMSUDHEEN – SENIOR GOVERNMENT PLEADER **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON** **01.08.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P. (C) No.39573 of 2015 2 ## **JUDGMENT** The writ petition is filed with the following prayers: _a. To quash Ext. P5 order passed by the 1st respondent by the issue of a writ of certiorari or such other writ or order or direction._ _b. To grant the petitioner such other incidental reliefs including the costs of these proceedings._ 2. Petitioner is a private limited company engaged in the manufacture and sale of iron and steel products. It is an assessee on the rolls of the 1[st] respondent. The books of accounts of the petitioner for the assessment year 2012-2013 was called for by the 1[st] respondent. Subsequent to the filing of the audit report in Form 13 & 13A along with balance sheet, the 1[st] respondent issued Ext.P3 notice under Section 25(1) of the Kerala Value Added Tax Act, 2003 (herein after be referred as 'Act'). 3. The petitioner has filed a detailed reply as Exts.P4 and P4A along with the reconciliation statement before the 1[st] respondent. However, the 1[st] respondent finalised the W.P. (C) No.39573 of 2015 3 proceedings as per Ext.P5 order. According to the petitioner, Ext.P5 order is illegal. The demand as per Ext.P5 is on account of disallowing the input credit to the extent of Rs.32,63,142/-. The petitioner produced the entire accounts and details before the 1[st] respondent. Without properly considering the reconciliation statement, the 1[st] respondent has passed Ext.P5 order. Aggrieved by Ext.P5 order, the petitioner has approached this Court with the above writ petition. 4. Heard the learned counsel for the petitioner as well as the learned Government Pleader. 5. Leaned counsel for the petitioner submits that on receipt of Ext.P3 notice under Section 25(1), the petitioner has filed Ext.P4 detailed reply along with Ext.P4(A) reconciliation statement before the 1[st] respondent. Even though, the representative appeared before the 1[st] respondent and explained the details in the reconciliation statement and Form 13 & 13A statement, without proper consideration of the facts, the 1[st] respondent finalised the proceedings vide Ext.P5 order. 6. Learned counsel for the petitioner further submits that as per the provisions in Section 11(9) of the KVAT Act, the W.P. (C) No.39573 of 2015 4 1[st] respondent ought to have called for the original tax invoice from the petitioner in order to verify the input tax credit claim put forwarded by the petitioner. Ext.P5 order was passed without complying with the procedures related in Section 11(9) of the KVAT Act. 7. Per contra, the learned Government Pleader submits that the 1[st] respondent has given reasons while passing Ext.P5 order regarding the reconciliation statement. The 1[st] respondent has submitted that the reconciliation statement according to the 1[st] respondent was put up, since, Form 13 & 13A statement did not endorse the claim. 8. Learned counsel for the petitioner on the other hand submits that the reasons for the difference in Form 13 & 13A statement are very clearly explained in Ext.P4 reply filed by the petitioner before the 1[st] respondent. 9. However, all these issues can be considered by the statutory authority as provided under the Act and the petitioner can approach the statutory authority by way of appeal and produce the books of accounts and all documents before the concerned authority. W.P. (C) No.39573 of 2015 5 10. In **Genpact India Private Limited v. Deputy Commissioner of Income Tax and Another** [Civil Appeal No.8945 of 2019 @ SLP © No.20728 of 2019], the apex court held that the High Court must not interfere if there is an adequate efficacious alternate remedy available to the petitioner. Relevant portion of Para 15 of the judgment is extracted below ## for reference. _“it is settled law that non-entertainment of petitions under writ jurisdiction by the High Court when an efficacious alternative remedy is available is a rule of self-imposed limitation. It is essentially a rule of policy, convenience and discretion rather than a rule of law. Undoubtedly, it is within the discretion of the High Court to grant relief under Article 226 despite the existence of an alternative remedy. However, the High Court must not interfere if there is an adequate efficacious alternative remedy available to the petitioner and he has approached the High Court without availing the same unless he has made out an exceptional case warranting such interference or there exist sufficient grounds to invoke the extraordinary jurisdiction under Article 226. It was further held that if the High Court is satisfied that the aggrieved party can have an_ W.P. (C) No.39573 of 2015 6 _adequate or suitable relief elsewhere, it can refuse to exercise its jurisdiction. The Court, in extraordinary circumstances, may exercise the power if it comes to the conclusion that there has been a breach of the principles of natural justice or the procedure required for decision has not been adopted.”_ 11. The learned counsel for the petitioner doesn't have a case that there was violation of any principles of natural justice. Ext.P5 order also reveals that the petitioner was afforded an opportunity of hearing by the 1[st] respondent. The petitioner has not made out any exceptional case warranting interference by this Court under Article 226 of the Constitution of India. The petitioner has an alternate efficacious remedy of statutory appeal provided under Section 55 of the KVAT Act. 12. On consideration of the entire facts of the case, I am of the opinion that the writ petition can be disposed of with a direction to the petitioner to approach the statutory authority by way of an appeal. 13. Accordingly, the writ petition is disposed of as follows: 1. The petitioner is directed to file an appeal W.P. (C) No.39573 of 2015 7 against Ext.P5 order before the statutory authority by way of appeal within a period of one month from the date of receipt of a certified copy of this judgment. 2. The Appellate Authority shall take a lenient view, while considering the appeal, stay petitions and delay petition, regarding the period during which the writ petition is pending before this Court. 3. The petitioner shall move the Appellate Authority within one month from the date of receipt of a certified copy of the judgment. The recovery proceedings pursuant to Ext.P5 shall be kept in abeyance for a period of two months from today. 4. The petitioner shall be afforded an opportunity to produce all supporting documents furnished for the assessment year 2012-2013, while appeal is being considered by the appellate authority. W.P. (C) No.39573 of 2015 8 5. The appellate authority shall also verify the original tax invoices as stated in Section 11(9) of the Act and consider and pass orders within a period of three months thereafter. Sd/- **SHOBA ANNAMMA EAPEN JUDGE** SMF W.P. (C) No.39573 of 2015 9 ## **APPENDIX OF WP(C) 39573/2015** PETITIONER EXHIBITS EXHIBIT-P1: COPY OF RETURN FOR 2012-13 FILED BY THE PETITIONER 21.06.2013. EXHIBIT-P2: COPY OF AUDIT REPORT OF THE PETITIONER ISSUED BY K.V.VENKITARAMAN, CHARTERED ACCOUNTANT. EXHIBIT-P2(A): COPY OF BALANCE SHEET AND PROFIT & LOSS ACCOUNT OF THE PETITIONER 15.07.2013. EXHIBIT-P3: COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT 23.09.2015. EXHIBIT-P4: COPY OF REPLY FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT 24.10.2015. EXHIBIT-P4(A): COPY OF RECONCILIATION STATEMENT OF THE PETITIONER. EXHIBIT-P5: COPY OF ORDER ISSUED BY THE 1ST RESPONDENT 30.10.2015.