M/S. MANAKKAL TOURIST HOME v. THE STATE OF KERALA

**RP.No.848 OF 2019 and RP.No.849 OF 2019 1** # **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM** **&** **THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN** **FRIDAY, THE 08TH DAY OF NOVEMBER 2019 / 17TH KARTHIKA, 1941** **RP.No.848 OF 2019 IN WP(C). 11593/2012** **AGAINST THE ORDER/JUDGMENT IN WP(C) 11593/2012(Y) OF HIGH COURT OF KERALA** ## **REVIEW PETITIONER/S:** **M/S. MANAKKAL TOURIST HOME,** **A FIRM REPRESENTED BY ITS MANAGING PARTNER, TREESA XAVIER, E1/CC/LIV/468, KIZHAVANA ROAD, PANAMPILLY NAGAR, KOCHI-682036.** **BY ADVS. SRI.A.SUDHI VASUDEVAN (SR.) SRI.JOSE JONES JOSEPH** ## **RESPONDENT/S:** **1 THE STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM-695001.** **2 COMMERCIAL TAXES OFFICER, 4TH CIRCLE, ERNAKULAM-682035.** **3 INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, ERNAKULAM, KOCHI. 682015** ## **OTHER PRESENT:** ## **SR.GP.SRI. MOHAMMED RAFIQ** **THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 08.11.2019, ALONG WITH RP.849/2019, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **RP.No.848 OF 2019 and RP.No.849 OF 2019 2** # **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT** **THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM** **&** **THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN** **FRIDAY, THE 08TH DAY OF NOVEMBER 2019 / 17TH KARTHIKA, 1941** ## **RP.No.849 OF 2019 IN WP(C). 11637/2012** **AGAINST THE ORDER/JUDGMENT IN WP(C) 11637/2012(D) OF HIGH COURT OF KERALA** ## **REVIEW PETITIONER/S:** **MEENU TOURIST HOME, REPRESENTED BY ITS MANAGING PARTNER, D. DHANESH, OPPOSITE TO KALOOR BUS STAND, KOCHI- 682017.** **SRI.A.SUDHI VASUDEVAN (SR.) BY ADV. SRI.JOSE JONES JOSEPH** ## **RESPONDENT/S:** **1 THE STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM-695001. 2 THE COMMERCIAL TAX OFFICER, 4TH CIRCLE, ERNAKULAM - 682015 3 INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, ERNAKULAM, KOCHI 682015** **THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 08.11.2019, ALONG WITH RP.848/2019, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **C.K.ABDUL REHIM & ANU SIVARAMAN, JJ. -------------------------------RP No.848/19 in W.P.(C) No.11593/2012** ## **and** **RP No.849/19 in W.P.(C) No.11637/2012** **---------------------------------** **Dated this the 8[th] day of November, 2019** ## **O R D E R** ## **C.K.ABDUL REHIM, J** In both these Review Petitions filed, respectively against the judgments in W.P.(C) Nos.11593/2012 and 11637/2012, the writ petitioners are seeking review of a common judgment passed in W.A No.1861/2007 and connected cases, dated 3[rd] January 2018. The question agitated, which has got a checkered history of litigations, is with respect to the validity of the amendment brought to Section 7(b) of the Kerala General Sales Tax Act (introduced on 24.10.2006 with retrospective effect from 1.7.2006). The challenges were finally rejected through the judgment which is sought to be reviewed. 2. Learned Senior Counsel appearing for the Review Petitioners is limiting the relief to the extent of permitting the petitioners to exercise the option with respect to the Assessment **RP.No.848 OF 2019 and RP.No.849 OF 2019 4** year 2006-2007, either to choose the compounding scheme as provided under Section 7(b) of the KGST Act or to go under the regular assessment under Section 5 of the Act. A similar issue came up before another Division Bench of this Court in some other review petitions filed against the very same common judgment, in R.P Nos. 231, 224, 636 and 679 of 2018. Through a detailed order passed on 24.7.2019, the Review Petitions were disposed of by granting permission to the petitioners therein either to opt for the compounding scheme and to pay the tax due accordingly or to opt out from the compounding scheme within one month from the date of order and to pay the tax due under the normal rate as provided under Section 5(2) of the KGST Act. Request of the learned Senior Counsel is to grant similar benefit to the present Revision Petitioners. 3. Learned Government Pleader, per contra, pointed out that the benefit extended to the petitioners in the earlier Review Petitions cannot be granted to the petitioners in the present petitions, because their assessments with respect to the year 2006-07 stands already concluded. But, the learned Senior Counsel for the petitioners pointed out that, finalization of the assessments with respect to the year was made only under the **RP.No.848 OF 2019 and RP.No.849 OF 2019 5** compounding scheme by computing the tax liability in accordance with the amended provisions of Section 7(b). It is pointed out that, the petitioners herein had never conceded or opted for the compounding scheme as amended with effect from 1.7.2006. 4. Going by the common judgment, it is evident that, the challenges raised against the amendment was ultimately negatived. But the amendment pertains to the scheme of compounding. It is settled principle that an assessee has to be given an option either for compounding his tax liability in accordance with the scheme or to go by the regular method of assessment provided under the charging section. With respect to cases at hand, when the litigation started through the writ petitions filed by similar assessees, the learned Single Judge who dealt with the matter had categorically found that the petitioners therein, if they do not want to remit tax at the compounded rate, will be free to maintain the books of accounts pertaining to sale and to remit the turnover tax on the basis of determination in the assessment proceedings. In other words, it was held that, when the amendment came into force the assessee has got a right to opt either to go under the compounding scheme or to file returns **RP.No.848 OF 2019 and RP.No.849 OF 2019 6** and to remit tax in accordance with the charging section contained in the Act. The said view has not been reversed by the Division Bench in the appeals filed against the common judgment in the initial round of litigation, as evident from the decisions reported in **Hotel Asoka v. Commercial Tax Officer (2007 (4) KLT 718)** . But when the matter was taken up before the Hon'ble Supreme Court, the cases were remanded for fresh decision by the Division Bench on two specific questions mentioned in the judgment in Civil Appeal No.2935 of 2009 and connected cases dated 23.4.2009. No discussion was made by the Hon'ble Supreme Court with respect to the findings of this court relating to the right to exercise the option. The review petitioners herein had filed the writ petitions only after the matter was remanded by the Hon'ble Supreme Court. The writ petitions filed by them were also disposed of through the common judgment with respect to which the review is sought for. It is evident that, in the earlier batch of review petitions in R.P Nos.231/2018 and connected cases, a Division Bench in its order dated 24.7.2019 observed that, it is only appropriate to extent the benefit of the orders issued by this Court while delivering the judgment dated 28.9.2007. It was specifically found that the **RP.No.848 OF 2019 and RP.No.849 OF 2019 7** benefit regarding exercise of the option was extented only on account of the fact that the matter has been pending before the Apex Court for quite a long time, which delay cannot be attributed against the petitioners. 5. Under the above mentioned circumstances, the objection raised by the learned Government Pleader in extenting the same benefit to the present Review Petitioners cannot be sustained, because there is no evidence to show that, after the introduction of the amendment, at any point of time, the petitioners herein had made any option under the compounding scheme. Therefore, we are of the opinion that the benefit granted to the review petitioners in the earlier batch of cases can be extented to the petitioners herein also. 6. Therefore, the above Review Petitions are hereby disposed of by granting permission to the petitioners herein to opt under the compounding scheme and to pay tax accordingly or to opt out of the compounding scheme and to pay tax under the normal rate as provided under Section 5(2) of the KGST Act. The right to exercise such option can be made dehors finalization of the tax liability under the compounding scheme. However, if the petitioners opt to exercise for regular **RP.No.848 OF 2019 and RP.No.849 OF 2019 8** assessment as provided under Section 5(2) of the KGST Act, the same shall be submitted to the Assessing Authority concerned in writing, within a period of two weeks from the date of receipt of a copy of this order. If such an option is received by the Assessing Authority concerned, he will be at liberty to finalize the assessment on the basis of the procedure contemplated under Section 5(2) of the Act. **Sd/-** **C.K.ABDUL REHIM JUDGE** **Sd/-** sab **ANU SIVARAMAN JUDGE** **RP.No.848 OF 2019 and RP.No.849 OF 2019 9**