M.S. Sree Lakshmi Cashew Company v. Commissioner of State Goods and Service Taxes Department, Thiruvananthapuram; Assistant Commissioner (Assessment) Special Circle, State Goods and Service Taxes Department, Kollam; S. Thampu Propritor, River Green Exports

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN** **THURSDAY, THE 15[TH] DAY OF SEPTEMBER 2022 / 24TH BHADRA, 1944** **WP(C) NO. 18994 OF 2019** ## **PETITIONER/S:** M.S. SREE LAKSHMI CASHEW COMPANY, LEKSHMI PRABHA, KADAPAKKADA, KOLLAM - REPRESENTED BY ITS MANGING PARTNER, P.SUNDARAN, S/O LATE T.M. PRABHA, RESIDING AT LEKSHMI PRABHA, KADAPAKKADA, KOLLAM - 691 008 BY ADVS. SERGI JOSEPH THOMAS SRI.S.AJAY KUMAR ## **RESPONDENT/S:** 1 THE COMMISSIONER OF STATE GOODS AND SERVICE TAXES DEPARTMENT, TAX TOWER, KARAMANA P.O., THIRUVANANTHAPURAM - 695 002 2 THE ASSISTANT COMMISSIONER (ASSESSMENT) SPECIAL CIRCLE, STATE GOODS AND SERVICE TAX DEPARTMENT, KOLLAM - 691 013 3 S.THAMPU PROPRITOR, RIVER GREEN EXPORTS, THEKKUMCHERRY, PUTHOOR P.O., KOLLAM, PIN - 691 507 BY ADVS. GOVERNMENT PLEADER SRI.K.SHAJ ## **OTHER PRESENT:** SMT JASMINE M.M-GP THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 15.09.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.C.No. 18994 of 2019 2 ## **JUDGMENT** ## **Dated this the 15th day of September, 2022** The petitioner has filed this writ petition challenging Ext.P7 order passed by the 2[nd] respondent, rejecting the application of the assessee for revising the monthly returns for the months, June and December 2016, and annual return for the year 2016-2017. 2. The brief facts of the case are as follows; The petitioner is a partnership firm and a registered dealer under the Kerala Value Added Tax Act, 2003 (for short 'KVAT Act) on the rolls of the 2[nd] respondent. The petitioner is engaged in the business of import of raw cashew processing and sale and export of cashew nuts, and has factories in Kerala and in Tamil Nadu. For the assessment year 2016-2017, the petitioner submitted monthly returns through online mode and paid tax as per returns. For the purpose of filing annual return for the year 2016-2017, internal audit of the entire accounts was conducted. On verification of the Books of Accounts, certain mistakes and omissions in the monthly returns submitted by the W.P.C.No. 18994 of 2019 3 firm were found by the accountants. In order to correct the mistakes and omissions, the petitioner as per Ext.P1 requested the 2[nd] respondent for permission for revision of returns for the months of June 2016 and December 2016 and the annual return of the year 2016-2017. Since there was inordinate delay in considering Ext.P1 application, the petitioner approached this Court by filing W.P.(C).No.7357/2019 and as per Ext.P2 judgment dated 12.03.2019, this Court directed the Assessing Authority to take appropriate decision on Ext.P1 within a period of six weeks. Pursuant to Ext.P2 judgment, the 2[nd] respondent issued Ext.P3 notice to which the petitioner filed Ext.P4 detailed reply and produced documentary proof including the declaration of the 3[rd] respondent who is the purchasing dealer. The 2[nd] respondent as per Ext.P7 order, rejected the request made by the petitioner for revision of the returns for the months of June 2016 and December 2016 and the annual return for the year 2016-2017. The counsel for the petitioner submits that the 2[nd] respondent ought to have seen that it is a case where the petitioner came forward voluntarily, disclosing the transaction, and there was no attempt to evade tax. The action of the 2[nd] W.P.C.No. 18994 of 2019 4 respondent denying an opportunity to the petitioner to file revised return is illegal and aggrieved by the said Ext.P7 order, the petitioner had filed this writ petition. 3. The 2[nd] respondent filed counter affidavit justifying Ext.P7 order passed by the 2[nd] respondent contending that the assessee has not maintained true and complete Books of Accounts. It was also contended that the assessee colluded with the purchasing dealer, with an intention to suppress the taxable sale, since the purchasing dealer as well as the assessee had omitted to include the said transaction in their Books of Accounts. 4. I have heard the learned counsel for the petitioner as also the learned Government Pleader. 5. It is an admitted fact that the petitioner has voluntarily come forward by filing Ext.P1 application for revision of returns for the months June 2016 and December 2016 and also for revision of the annual return for the year 2016-2017. The Assessing Authority has not issued any notice under Section 25(1) of the KVAT Act for assessment nor the concerned officer has taken issuance of any notice under Section 67(1) of the W.P.C.No. 18994 of 2019 5 KVAT Act, 2003 for imposition of penalty or for improper maintenance of books of accounts or revision of tax. 6. The learned counsel for the petitioner submits that on scrutiny of the accounts, it was found that there were some omissions or mistakes in the returns filed and hence the petitioner has voluntarily come forward with their request for correction of the said returns. The said transaction is a bonafide transaction and the omission to include the said transaction in the relevant monthly returns by the assessee as well as the buyer is only an accidental slip and not intentional. The said defect was detected by the assessee while conducting internal audit and based on that, the accountant contacted the buyer to get the H form declaration, and then only the buyer recognized the fact that they also have omitted to furnish the said purchase in their relevant monthly returns due to clerical lapse. Thus the assessee as well as the buyer had submitted request for revising the relevant monthly returns and annual return. 7. The learned counsel for the petitioner has produced Ext. P8 order of the Appellate Authority along with I.A.No. W.P.C.No. 18994 of 2019 6 1/2022 with regard to the appeal KVATA (KLM) 54/2021 filed by the 3[rd] respondent purchasing dealer which shows that the Appellate Authority has considered the appeal filed by the 3[rd] respondent and had directed the Assessing Authority to verify the accounts and taxability of the impugned transaction. The relevant paragraph in page 5 of Ext.P8 reads as follows: _“Local purchase difference alleged is claimed to have effected for export and payment is made through bank. The appellant and his supplier had applied for revision of returns for incorporating the omission which is the basis of this impugned assessment. The assessing authority has not seen verified the bonafides of the claims made by the appellant. The assessing authority shall go through the accounts and taxability of the impugned transaction. If the purchase is for export and supported by 'H' forms and other relevant documents, the assessment seldom sustains. The order to be modified to the extent of the result of such verification.”_ 8. The learned counsel for the petitioner has also brought to my notice the judgment of this Court in _**Commercial Tax Officer v. Varghese [2018(3) KLT 468],**_ in which a similar set of facts were brought before this court for consideration. It was held that there is no prohibition in W.P.C.No. 18994 of 2019 7 attempting revision of return after the time specified if no penal proceedings is initiated. It was further held that it is high time the officers of the Department rose up from their mediocre mind set and became facilitators of finance and commerce aiding the economic advancement of the Nation rather than reducing themselves to mere tax collectors and target achievers. This Court also held that what is required is a practical and pragmatic approach wherein the Assessing Authority looks into the bonafides of the claim and decides whether a permission can be granted or not. 9. In Varghese's case (supra) the assessee by itself had approached the Assessing Authority for revision of returns. In the case in hand, the assessee himself has approached by filing Ext.P1 request for revision of returns before the Assessing Authority and the Assessing Authority has not issued any notice under Section 25(1) for assessment nor the concerned officer has taken issuance of any notice under Section 67(1) of the KVAT Act, 2003 for imposition of penalty, for improper maintenance of books of accounts or revision of tax. It is pertinent to note that 3[rd] respondent purchasing dealer had W.P.C.No. 18994 of 2019 8 filed an application for revision of returns before his assessing authority which was rejected and completed the assessment under Section 25(1) of the KVAT Act and the order was taken in appeal, by the 3[rd] respondent purchasing dealer. As per Ext.P8 appellate order it is seen that, the Appellate Authority had directed the Assessing Authority to go through the accounts and taxability of the impugned transaction. 10. On a consideration of the entire facts of this case, I am of the opinion that Ext.P7 order has to be set aside and the a direction is to be given to the 2[nd] respondent to reconsider the request of the petitioner for revision of monthly returns and annual returns taking into consideration the judgment rendered by this Court in _**Varghese's case (supra).**_ In the result the writ petition is disposed of with the following direction: (i) Ext.P7 order passed by the 2[nd] respondent is set aside. The 2[nd] respondent is directed to reconsider the matter afresh, in accordance with law, taking into consideration the dictum laid down in _**Commercial Tax Officer v. Varghese [2018(3) KLT 468]** also Ext.P8 order of the appellate authority_ within a W.P.C.No. 18994 of 2019 9 period one month from the date of receipt of a certified copy of this judgment. (ii) It is made clear that such proceedings shall be finalised with notice to the petitioner/assessee and the 2[nd] respondent shall afford the petitioner an opportunity of being heard. The petitioner shall produce the copy of the judgment along with the copy of the writ petition before the 2[nd] respondent for compliance. Sd/- **SHOBA ANNAMMA EAPEN, JUDGE** Dxy W.P.C.No. 18994 of 2019 10 ## **APPENDIX OF WP(C) 18994/2019** PETITIONER EXHIBITS |EXHIBIT P1|TRUE COPY OF THE REQUEST DATED 03/11/2017| |---|---| ||SUBMITTED BY THE PETITIONER BEFORE THE| ||SECOND RESPONDENT ON 13/11/2017| |EXHIBIT P2|TRUE COPY OF THE JUDGMENT DATED 12/03/2019| ||IN W.P.(C)NO.7357/2019| |EXHIBIT P3|TRUE COPY OF THE NOTICE NO.| ||32020294252/2016-17 DATED 03/05/2019 ISSUED| ||BY THE SECOND RESPONDENT| |EXHIBIT P4|TRUE COPY OF THE REPLY DTD. 10.05.2019| ||SUBMITTED BY THE PETITIONER BEFORE THE| ||SECOND RESPONDENT| |EXHIBIT P5-(A)|TRUE COPY OF THE DECLARATION OF 3RD| ||RESPONDENT| |EXHIBIT P5-(B)|TRUE COPY OF THE EXPORT ORDER NO.C127030R| ||DTD. 15.10.2015| |EXHIBIT P5-(C)|TRUE COPY OF THE EXPORT ORDER NO.PAB1612012| ||DTD.12.12.2016| |EXHIBIT P5-(D)|TRUE COPY OF THE EXPORT INVOICE| ||NO.RGE/EXP/02/2016-2017 DTD.10.06.2016| |EXHIBIT P5-(E)|TRUE COPY OF THE EXPORT INVOICE| ||NO.RGE/EXP/05/2016-2017 DTD. 09.01.2017| |EXHIBIT P5-(F)|TRUE COPY OF THE BILLS OF LADING| ||NO.COK008438 DTD.11.06.2016| |EXHIBIT P5-(G)|TRUE COPY OF THE BILLS OF LADING| ||NO.JNF/02/01/17 DTD.04.01.17| |EXHIBIT P-6|TRUE COPY OF THE ACCOUNTS COPY OF THE| ||PETITIONER| |EXHIBIT P6-(A)|TRUE COPY OF THE ACCOUNTS COPY OF THE 3RD| W.P.C.No. 18994 of 2019 11 RESPONDENT EXHIBIT P7 TRUE COPY OF THE ORDER NO.32020294252/201617 DATED 15/05/2019 PASSED BY THE SECOND RESPONDENT Exhibit P8 TRUE COPY OF THE APPELLATE ORDER DATED 13/06/2022 THE JOINT COMMISSIONER, (APPEALS) 1, KERALA STATE GOODS AND SERVICE TAXES DEPARTMENT, KOLLAM.