N.P. Abdul Rasheed v. The Commercial Tax Officer, Commercial Tax Office, Koilandy & The State of Kerala

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** ## **&** **THE HONOURABLE MR. JUSTICE ASHOK MENON** **TUESDAY ,THE 12TH DAY OF FEBRUARY 2019 / 23RD MAGHA, 1940** **WP(C).No. 12806 of 2008** ## **PETITIONER/S:** **N.P. ABDUL RASHEED S/O.MOHAMMED, PROPRIETOR, M/S.TOYA PAINTS, UP/3/44B, MANGAD P.O., CALICUT.** **BY ADVS. DR.K.B.MUHAMED KUTTY (SR.) SRI.K.M.FIROZ** ## **RESPONDENT/S:** **1 THE COMMERCIAL TAX OFFICER, COMMERCIAL TAX OFFICE, KOILANDY. 2 THE STATE OF KERALA, REPRESENTED BY REPRESENTED BY THE SECRETARY TO GOVERNMENT, TAX (B) DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM.** **SRI MOHAMMED RAFIQ, SR GP** ## **OTHER PRESENT:** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 12.02.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** _W.P.(C) No.12806 of 2008_ 2 ## **JUDGMENT** ## Vinod Chandran, J. The petitioner is before this Court seeking refund of the tax paid under protest. The petitioner admittedly was carrying on an industry, which was classified as one under the Khadi and Village Industries Board [K&VIB for brevity]. There was a challenge to the notifications, which granted a reduced tax benefit to certain industries with a certain turnover and modifications made to the limit prescribed of the turnover. A learned Single Judge of this Court disposed off the writ petitions and it is submitted by the learned Senior Counsel Sri.Mohammed Kutty appearing for the petitioner that the petitioner then paid the taxes for the years 2000-01 to 2004-05 under protest. An appeal was filed in which the decision of the learned Single Judge was reversed. We have seen the appellate order as reported in _**Khadi Grama Vyavasaya**_ ## _**Association (State Committee) v. State of Kerala,**_ _**[2006] 145 STC 601 (Ker.)**_ , the Court only said that there cannot be a discrimination alleged in classifying _W.P.(C) No.12806 of 2008_ 3 different kinds of industries and upheld the notifications. We do not see any bearing, on the facts of the aforesaid decision, with the present case. 2. However, the fact remains that the petitioner had paid the amounts in protest. The assessment orders were also not challenged after they were passed. Subsequently, the Government came out with notification at Ext.P11 granting retrospective exemption to all K&VI units from the year 2000. The petitioner then filed the above Writ Petition claiming refund. 3. The learned Senior Counsel appearing for the ## petitioner would rely on _**Corporation Bank v. Saraswati Abharansala, (2009) 19 VST 84 (SC)**_ . The learned Senior Government Pleader Sri.Mohammed Rafiq would rely on ## _**Yesyem Arecanut Co. v. State of Kerala, [2015] 14 SCC**_ _**367**_ . 4. The learned Senior Counsel would, argue that there is absolutely no reasoning in the later decision of the Hon'ble Supreme Court and that it was decided on a narrow compass. The specific contentions taken up by the petitioner in the Writ Petition has not been _W.P.(C) No.12806 of 2008_ 4 considered in the later judgment. It is pointed out that the petitioner has, in the Writ Petition, raised a ground that the refusal to refund the amount paid, on the subsequent exemption granted is a clear violation of Article 265 of the Constitution of India. It is also contended that Section 10 of the KGST Act gives the Government a limited power to grant exemption or deduction both retrospectively or prospectively, but however does not clothe the Government with power to make a provision so as to cause liability on a person for payment of tax, which is not sanctioned by law. 5. The learned Senior Counsel would assert that the reasoning in _**Saraswati Abharansala**_ should be followed. Sri.Mohamed Kutty has also read over to us from paragraphs 18 to 31, wherein each of these contentions raised by the petitioner in the Writ Petition has been considered. 6. We note that _**Saraswati Abharansala**_ held in favour of the assessee on the question of a refund when the rate of tax was reduced from 1% to 0.5% retrospectively and the notification therein also _W.P.(C) No.12806 of 2008_ 5 contained a similar provision of prohibition insofar as the refund of tax already paid. The Hon'ble Supreme Court held that the same is not permissible in a subordinate legislation and that it would lead to unjust enrichment of the State. Later judgment of the Hon'ble Supreme Court in _**Yesyem Arecanut Co.**_ also considered the very same issue. Sri.Mohamed Kutty points out that the issue considered was in a very narrow compass as stated in the said judgment itself. We notice that, within the said narrow compass, is the issue as to whether the prohibition on refund of tax already paid; could be mandated in the notification granting retrospective exemption or reduction of rate of tax. Therein also, a similar notification reducing the rate of tax with retrospective effect came up for consideration. It was held that the clause in the notification, which prohibited refund of tax already paid, is sustainable. When there are two decisions of the Hon'ble Supreme Court, both by co-ordinate Benches, The High Court has to follow the later decision and in such circumstances, it may not be proper for us to find _W.P.(C) No.12806 of 2008_ 6 the reasoning in the earlier judgment to be more comprehensive and allow the Writ Petition on that ground alone. We, hence, dismiss the Writ Petition, leaving the parties to suffer their respective costs. ## **Sd/-** **K.VINOD CHANDRAN** ## **JUDGE** **Sd/-** _dkr_ **ASHOK MENON JUDGE** _W.P.(C) No.12806 of 2008_ 7 ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 COPY OF THE ASSESSMENT ORDER 2000-2001 (KGST) DATED 27/01/2004. EXHIBIT P2 COPY OF THE ASSESSMENT ORDER 2001-2002 (KGST) DATED 21/01/2004. EXHIBIT P3 COPY OF THE ASSESSMENT ORDER 2002-2003 (KGST) DATED 19/11/2004. EXHIBIT P4 COPY OF THE ASSESSMENT ORDER 2003-2004 (KGST) DATED 18/07/2005. EXHIBIT P5 COPY OF THE ASSESSMENT ORDER 2004-2005 (KGST) DATED 12/10/2006. EXHIBIT P6 COPY OF THE CENTRAL SALES TAX ASSESSMENT ORDER FOR THE YEAR 2000-2001 DATED 21/01/2004. EXHIBIT P7 COPY OF THE CENTRAL SALES TAX ASSESSMENT ORDER FOR THE YEAR 2001-2002 DATED 21/01/2004. EXHIBIT P8 COPY OF THE CENTRAL SALES TAX ASSESSMENT ORDER FOR THE YEAR 2002-2003 DATED 19/11/2004. EXHIBIT P9 COPY OF THE CENTRAL SALES TAX ASSESSMENT ORDER FOR THE YEAR 2003-2004 DATED 13/05/2005. EXHIBIT P10 COPY OF THE CENTRAL SALES TAX ASSESSMENT ORDER FOR THE YEAR 2004-2005 DATED 12/10/2006. EXHIBIT P11 COPY OF THE NOTIFICATION S.R.O. 544/2007, DATED 21/06/2007. EXHIBIT P12 COPY OF THE CERTIFICATE ISSUED BY THE KERALA KHADI AND VILLAGE INDUSTRIES BOARD, DATED 23/04/2003. EXHIBIT P13 COPY OF THE CERTIFICATE ISSUED BY THE KERALA KHADI AND VILLAGE INDUSTRIES BOARD, DATED 04/11/2003.** _W.P.(C) No.12806 of 2008_ 8 **EXHIBIT P14 COPY OF THE CERTIFICATE ISSUED BY THE KERALA KHADI AND VILLAGE INDUSTRIES BOARD, DATED 29/09/2004. EXHIBIT P15 COPY OF THE CERTIFICATE ISSUED BY THE KERALA KHADI AND VILLAGE INDUSTRIES BOARD, DATED 29/03/2005. EXHIBIT P16 COPY OF THE CERTIFICATE ISSUED BY THE KERALA KHADI AND VILLAGE INDUSTRIES BOARD, DATED 20/03/2006. EXHIBIT P17 COPY OF FEW SAMPLE BILLS ISSUED BY THE PETITIONER. EXHIBIT P18 COPY OF THE LETTER DATED 29/08/2003. EXHIBIT P19 COPY OF THE CIRCULAR DATED 09/07/2004.**