State of Kerala v. M/S K-Link Healthcare (India) Private Ltd.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **&** **THE HONOURABLE MR. JUSTICE T.R.RAVI** **THURSDAY, THE 25TH DAY OF JUNE 2020 / 4TH ASHADHA, 1942** **OT.Rev.No.31 OF 2020** **AGAINST THE ORDER IN TA[VAT] NO.404/2014 DATED 02-08-2019 OF THE KERALA VAT APPELLATE TRIBUNAL, ERNAKULAM** ## **REVISION PETITIONER/RESPONDENT/RESPONDENT/REVENUE:** **STATE OF KERALA, REP. BY THE DEPUTY COMMISSIONER (LAW), KERALA GST DEPARTMENT, ERNAKULAM.** **BY SENIOR GOVERNMENT PLEADER SRI.V.K. SHAMSUDHEEN** ## **RESPONDENT/APPELLANT/APPELLANT/ASSESSEE:** **M/S.]K.LINK HEALTHCARE (INDIA) PRIVATE LTD., THEJUS SHOPPING COMPLEX, THAMMANAM ROAD, PALARIVATTOM, ERNAKULAM - 682 025.** **R1 BY ADV. SRI.T.M.SREEDHARAN (SR.) R1 BY ADV. SRI.V.P.NARAYANAN R1 BY ADV. SRI.R.BHASKARA KRISHNAN** **THIS OTHER TAX REVISION (VAT) HAVING BEEN FINALLY HEARD ON 25.06.2020, ALONG WITH OT.Rev.45/2020, OT.Rev.46/2020, OT.Rev.48/2020, OT.Rev.53/2020, OT.Rev.62/2020 & OT.Rev.63/2020, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** OT.Rev.Nos.31,45,46,48,53, 62 & 63 OF 2020 2 **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **&** **THE HONOURABLE MR. JUSTICE T.R.RAVI** **THURSDAY, THE 25TH DAY OF JUNE 2020 / 4TH ASHADHA, 1942** **OT.Rev.No.45 OF 2020** **AGAINST THE ORDER IN TA[VAT] NO.416/2014 DATED 02-08-2019 OF THE KERALA VAT APPELLATE TRIBUNAL, ERNAKULAM** ## **REVISION PETITIONER/APPELLANT/ASSESSEE:** **K-LINK HEALTHCARE (INDIA) PVT. LTD. THEJUS SHOPPING COMPLEX, THAMMANAM ROAD, PALARIVATTOM, ERNAKULAM, REPRESENTED BY ITS BRANCH MANAGER SHRI.SUNIL G.P.** **BY ADVS. SRI.T.M.SREEDHARAN (SR.) SMT.NISHA JOHN SRI.V.P.NARAYANAN** ## **RESPONDENT/RESPONDENT/REVENUE:** **STATE OF KERALA REPRESENTED BY THE CHIEF SECRETARY TO GOVERNMENT, SECRETARIAT, THIRUVANANTHAPURAM.** **BY SENIOR GOVERNMENT PLEADER SRI.V.K. SHAMSUDHEEN** **THIS OTHER TAX REVISION (VAT) HAVING BEEN FINALLY HEARD ON 25.06.2020, ALONG WITH OT.Rev.31/2020, OT.Rev.46/2020, OT.Rev.48/2020, OT.Rev.53/2020, OT.Rev.62/2020 & OT.Rev.63/2020, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** OT.Rev.Nos.31,45,46,48,53, 62 & 63 OF 2020 3 **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **&** **THE HONOURABLE MR. JUSTICE T.R.RAVI** **THURSDAY, THE 25TH DAY OF JUNE 2020 / 4TH ASHADHA, 1942** **OT.Rev.No.46 OF 2020** **AGAINST THE ORDER IN TA[VAT] NO.416/2014 DATED 02-08-2019 OF THE KERALA VAT APPELLATE TRIBUNAL, ERNAKULAM** ## **REVISION PETITIONER/RESPONDENT/RESPONDENT/REVENUE:** **STATE OF KERALA, REP. BY THE DEPUTY COMMISSIONER (LAW), KERALA GST DEPARTMENT, ERNAKULAM.** **BY SENIOR GOVERNMENT PLEADER SRI.V.K. SHAMSUDHEEN** ## **RESPONDENT/APPELLANT/APPELLANT/ASSESSEE:** **M/S.K-LINK HEALTHCARE (INDIA) PRIVATE LTD. THEJUS SHOPPING COMPLEX, THAMMANAM ROAD, PALARIVATTOM, ERNAKULAM-682025.** **R1 BY ADV. SRI.T.M.SREEDHARAN (SR.) R1 BY ADV. SMT.NISHA JOHN R1 BY ADV. SRI.V.P.NARAYANAN** **THIS OTHER TAX REVISION (VAT) HAVING BEEN FINALLY HEARD ON 25.06.2020, ALONG WITH OT.Rev.31/2020, OT.Rev.45/2020, OT.Rev.48/2020, OT.Rev.53/2020, OT.Rev.62/2020 & OT.Rev.63/2020, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** OT.Rev.Nos.31,45,46,48,53, 62 & 63 OF 2020 4 **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **&** **THE HONOURABLE MR. JUSTICE T.R.RAVI** **THURSDAY, THE 25TH DAY OF JUNE 2020 / 4TH ASHADHA, 1942** **OT.Rev.No.48 OF 2020** **AGAINST THE ORDER IN TA[VAT] NO.417/2014 DATED 02-08-2019 OF THE KERALA VAT APPELLATE TRIBUNAL, ERNAKULAM** ## **REVISION PETITIONER/RESPONDENT/RESPONDENT/REVENUE:** **STATE OF KERALA, REP. BY THE DEPUTY COMMISSIONER (LAW), KERALA GST DEPARTMENT, ERNAKULAM.** **BY SENIOR GOVERNMENT PLEADER SRI.V.K. SHAMSUDHEEN** ## **RESPONDENT/APPELLANT/APPELLANT/ASSESSEE:** **M/S.K-LINK KEALTHCARE (INDIA) PRIVATE LTD., THEJUS SHOPPING COMPLEX, THAMMANAM ROAD, PALARIVATTOM, ERNAKULAM-682025.** **R1 BY ADV. SRI.T.M.SREEDHARAN (SR.) R1 BY ADV. SRI.V.P.NARAYANAN R1 BY ADV. SMT.DIVYA RAVINDRAN** **THIS OTHER TAX REVISION (VAT) HAVING BEEN FINALLY HEARD ON 25.06.2020, ALONG WITH OT.Rev.31/2020, OT.Rev.45/2020, OT.Rev.46/2020, OT.Rev.53/2020, OT.Rev.62/2020 & OT.Rev.63/2020, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** OT.Rev.Nos.31,45,46,48,53, 62 & 63 OF 2020 5 **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **&** **THE HONOURABLE MR. JUSTICE T.R.RAVI** **THURSDAY, THE 25TH DAY OF JUNE 2020 / 4TH ASHADHA, 1942** **OT.Rev.No.53 OF 2020** **AGAINST THE ORDER IN TA[VAT] NO.329/2017 DATED 02-08-2019 OF THE KERALA VAT APPELLATE TRIBUNAL, ERNAKULAM** ## **REVISION PETITIONER/RESPONDENT/RESPONDENT/REVENUE:** **STATE OF KERALA, REP. BY THE DEPUTY COMMISSIONER (LAW), KERALA GST DEPARTMENT, ERNAKULAM.** **BY SENIOR GOVERNMENT PLEADER SRI.V.K. SHAMSUDHEEN** ## **RESPONDENT/APPELLANT/APPELLANT/ASSESSEE:** **M/S.K-LINK HEALTHCARE(INDIA)PRIVATE LTD THEJUS SHOPPING COMPLEX, THAMMANAM ROAD, PALARIVATTOM, ERNAKLAM-682025.** **R1 BY ADV. SRI.T.M.SREEDHARAN (SR.) R1 BY ADV. SRI.V.P.NARAYANAN R1 BY ADV. SMT.DIVYA RAVINDRAN** **THIS OTHER TAX REVISION (VAT) HAVING BEEN FINALLY HEARD ON 25.06.2020, ALONG WITH OT.Rev.31/2020, OT.Rev.45/2020, OT.Rev.46/2020, OT.Rev.48/2020, OT.Rev.62/2020 & OT.Rev.63/2020, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** OT.Rev.Nos.31,45,46,48,53, 62 & 63 OF 2020 6 **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **&** **THE HONOURABLE MR. JUSTICE T.R.RAVI** **THURSDAY, THE 25TH DAY OF JUNE 2020 / 4TH ASHADHA, 1942** **OT.Rev.No.62 OF 2020** **AGAINST THE ORDER IN TA[VAT] NO.404/2014 DATED 02-08-2019 OF THE KERALA VAT APPELLATE TRIBUNAL, ERNAKULAM** ## **REVISION PETITIONER/APPELLANT/ASSESSEE:-** **M/S.K-LINK HEALTHCARE (INDIA) PRIVATE LTD. THEJUS SHOPPING COMPLEX, THAMMANAM ROAD, PALARIVATTOM, ERNAKULAM-682025.** **BY ADVS. SRI.T.M.SREEDHARAN (SR.) SMT.NISHA JOHN SRI.V.P.NARAYANAN** ## **RESPONDENT/RESPONDENT/REVENUE:** **STATE OF KERALA REPRESENTED BY THE CHIEF SECRETARY TO GOVERNMENT, SECRETARIAT, THIRUVANANTHAPURAM.** **BY SENIOR GOVERNMENT PLEADER SRI.V.K. SHAMSUDHEEN** **THIS OTHER TAX REVISION (VAT) HAVING BEEN FINALLY HEARD ON 25.06.2020, ALONG WITH OT.Rev.31/2020, OT.Rev.45/2020, OT.Rev.46/2020, OT.Rev.48/2020, OT.Rev.53/2020 & OT.Rev.63/2020, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** # **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** # **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** ## **&** **THE HONOURABLE MR. JUSTICE T.R.RAVI** **THURSDAY, THE 25TH DAY OF JUNE 2020 / 4TH ASHADHA, 1942** **OT.Rev.No.63 OF 2020** **AGAINST THE ORDER IN TA[VAT] NO.417/2014 DATED 02-08-2019 OF THE KERALA VAT APPELLATE TRIBUNAL, ERNAKULAM** ## **REVISION PETITIONER/APPELLANT/ASSESSEE:-** **K-LINK HEALTHCARE(INDIA)PVT.LTD THEJUS SHOPPING COMPLEX, THAMMANAM ROAD, PALARIVATTOM, ERNAKULAM REPRESENTED BY ITS BRANCH MANAGER, SHRI SUNIL G.P.** **BY ADVS. SRI.T.M.SREEDHARAN (SR.) SMT.NISHA JOHN SRI.V.P.NARAYANAN** ## **RESPONDENT/RESPONDENT/REVENUE:** **STATE OF KERALA** **REPRESENTED BY THE CHIEF SECRETARY TO GOVERNMENT, SECRETARIAT, THIRUVANANTHAPURAM.** **BY SENIOR GOVERNMENT PLEADER SRI.V.K. SHAMSUDHEEN** **THIS OTHER TAX REVISION (VAT) HAVING BEEN FINALLY HEARD ON 25.06.2020, ALONG WITH OT.Rev.31/2020, OT.Rev.45/2020, OT.Rev.46/2020, OT.Rev.48/2020, OT.Rev.53/2020 & OT.Rev.62/2020, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** OT.Rev.Nos.31,45,46,48,53, 62 & 63 OF 2020 8 ## **O R D E R** ## **K. Vinod Chandran, J.** **Four revisions are by the State and three by the assessee. OT(Rev) Nos.46 of 2020, 31 of 2020 & 48 of 2020 are by the State against the common order of the Tribunal in the assessment years 2009-2010, 20102011 and 2011-2012. The assessee's revision for the said years are OT(Rev) Nos.48 of 2020, 62 of 2020 & 63 of 2020 respectively. OT(Rev) Nos.53 of 2020 is a revision by the State on a further reopening of assessment carried out under Section 25 of the Kerala Value Added Tax Act, 2003 [for brevity, 'the Act'] for the year 2009-2010.** **2. In OT(Rev) Nos.53 of 2020, the only question is as to the limitation found by the Tribunal. The assessment was set aside on the ground that the notice was issued after the limitation prescribed under Section 25 of the Act. The assessment year is 2009-2010 and the limitation provided was five** OT.Rev.Nos.31,45,46,48,53, 62 & 63 OF 2020 9 **years from the last date of the year of assessment. The limitation was also with respect to the initiation of proceedings ie., issuance of a notice. The notice was issued on 30.07.2015, while the limitation stood expired on 31.03.2015. In such circumstances, we do not find any infirmity in the order of the Tribunal, especially going by the decision of this Court in** _**Commercial Tax Officer v. Najeem [2018 (3) KLT 877].**_ **OT(Rev) Nos.53 of 2020 hence stands rejected.** **3. OT(Rev) Nos.46 of 2020, 31 of 2020 & 48 of 2020 filed by the State raise the common question of deletion of surcharge on sales turnover as has been levied under the Kerala Surcharge on Taxes Act, 1957 by Section 3(1A). A Division Bench of this Court affirmed the decision of a learned Single Judge reported in** _**Fab India Overseas (P) Limited v. Assistant Commissioner [2018 (3) KHC 314]**_ **[W.A. No.1993 of 2018]. The provision was held to be discriminatory and violative of Article 301 read with** OT.Rev.Nos.31,45,46,48,53, 62 & 63 OF 2020 10 **Clause (a) of Article 304 and Article 14 of the Constitution of India. OT(Rev) Nos.46 of 2020, 31 of 2020 & 48 of 2020 hence stands rejected, affirming the order of the Tribunal and answering the question of law in favour of the assessee and against the Revenue, respectfully following the Division Bench judgment afore-cited.** **4. The assessee's revision project two questions of law, whether the remand made by the Tribunal insofar as the assessment of medical products is erroneous or not and whether the taxation on quantity discount made is against the Circular issued by the Department.** **5. On the question of the remand made, the assessee is a multilevel marketing agency, who claims to have sold ayurvedic products, which was assessed as a food supplement. The Tribunal found that the Assessing Officer has failed to examine the composition of the specific products and whether it** OT.Rev.Nos.31,45,46,48,53, 62 & 63 OF 2020 11 **has any therapeutic value. The remand was on the ground of violation of principles of natural justice. We do not find any question of law arising from the said order.** **6. The tax levied on quantity discount is as per Section 7 of the Act. The assessee admittedly gave quantity discount on the basis of the volume of purchase made by the registered distributors. The assessee contended that as per Circular No.5 of 2005 dated 04.04.2005, assessee's contention has to be upheld. The illustration in the Circular as seen from Annexure B produced in OT(Rev) No.45 of 2020 is that when a dealer sells television sets to another dealer for Rs.15 lakhs and allows discount of 5 television sets, then the turnover for the 105 television sets should be deemed to be Rs.15 lakhs. We are of the opinion that such Circular goes against the Statute, but we would not consider the same here, since the assessee has not produced any evidence to bring its** OT.Rev.Nos.31,45,46,48,53, 62 & 63 OF 2020 12 **transaction even within the illustration in the Circular, as noticed by the First Appellate Authority. No invoices were produced and the sale was also not made to registered dealers. In that circumstance the contention of a trade discount cannot be sustained. We perfectly agree with the order of the Tribunal.** **7. The assessee has a further contention insofar as the dis-allowance of trade discount having been made with a consequent levy of 12.5% tax on all the items. The assessee's claim is that there were exempted goods as also goods leviable at reduced rates under the various schedules of the Act. However, we reiterate that there is no evidence produced by way of the invoices issued to show the specific goods sold. The learned Counsel for the assessee urged that there is a breakup of items proffered by the assessee. We do not think any reliance can be placed on such breakup proffered by the assessee, since it does not form part of the Books of Accounts. The sale of goods to** OT.Rev.Nos.31,45,46,48,53, 62 & 63 OF 2020 13 **distributors being not properly invoiced, there is no question of any exemption or reduced rate being applied. The Assessing Officer was well within his rights to have imposed the tax at the maximum of the rate as provided under the Act. We do not find any reason to allow the claim of the assessee. No question of law arises on that aspect.** **The question of law raised on the aspect of levy of tax on quantity discount is answered in favour of the Revenue and against the assessee. The revisions of the assessee stands rejected.** **Ordered accordingly. Parties shall suffer** **their respective costs.** ## **Sd/-** **K. VINOD CHANDRAN, Judge.** ## **Sd/-** **T.R. RAVI, Judge.** **sp/25/06/2020** **//True Copy//** **P.A. To Judge** OT.Rev.Nos.31,45,46,48,53, 62 & 63 OF 2020 14 ## **APPENDIX OF OT.Rev 31/2020** ## **PETITIONER'S/S EXHIBITS:** ## **ANNEXURE A** **A TRUE COPY OF ASSESSMENT ORDER UNDER SECTION 25(1) OF KVAT ACT DATED 23/09/2013 BEARING NO.32071307275/201011 PASSED BY THE COMMERCIAL TAX OFFICER, SECOND CIRCLE, KALAMASSERY AT PALARIVATTOM.** **ANNEXURE B A TRUE COPY OF THE ORDER DATED 30/05/2014 IN KVATA NO.3172 OF 2013.** **ANNEXURE C CERTIFIED COPY OF THE COMMON ORDER OF THE TRIBUNAL IN T.A.(VAT) NO.404 OF 2014 DATED 02/08/2019.** OT.Rev.Nos.31,45,46,48,53, 62 & 63 OF 2020 15 ## **APPENDIX OF OT.Rev 45/2020** ## **PETITIONER'S/S EXHIBITS:** |**ANNEXURE A**|**TRUE COPY OF ASSESSMENT ORDER U/S. 25(1)**| |---|---| ||**DATED 26.12.2012 PASSED BY THE COMMERCIAL**| ||**TAX OFFICER, KVAT CIRCLE-II, KALAMASSERY.**| |**ANNEXURE B**|**TRUE COPY OF THE ORDER DATED 28.5.2014 IN**| ||**KVTA NO.421/2013 PASSED BY THE ASSISTANT**| ||**COMMISSIONER(APPEALS), COMMERCIAL TAXES,**| ||**ERNAKULAM.**| |**ANNEXURE C**|**TRUE COPY OF THE COMMON ORDER OF THE KVAT**| ||**APPELLATE TRIBUNAL, ERNAKULAM, IN TA(VAT),**| ||**NO.416/204 DATED 2.8.2019.**| OT.Rev.Nos.31,45,46,48,53, 62 & 63 OF 2020 16 ## **APPENDIX OF OT.Rev 46/2020** ## **PETITIONER'S/S EXHIBITS:** |**ANNEXURE A**|**A TRUE COPY OF ASSESSMENT ORDER UNDER**| |---|---| ||**SECTION 25(1) OF KVAT ACT DATED 26.12.2012**| ||**BEARING NO.32071307275/2009-10 PASSED BY**| ||**THE COMMERCIAL TAX OFFICER, SECOND CIRCLE,**| ||**KALAMASSERY AT PALARIVATTOM.**| |**ANNEXURE B**|**A TRUE COPY OF THE ORDER DATED 28.5.2014 IN**| ||**KVATA NO.421 OF 2013.**| |**ANNEXURE C**|**TRUE PHOTO COPY OF THE COMMON ORDER OF THE**| ||**TRIBUNAL T.A.(VAT)NO.416 OF 2014 DATED**| ||**2.8.2019.**| OT.Rev.Nos.31,45,46,48,53, 62 & 63 OF 2020 17 ## **APPENDIX OF OT.Rev 48/2020** ## **PETITIONER'S/S EXHIBITS:** |**ANNEXURE A**|**A TRUE COPY OF ASSESSMENT ORDER UNDER**| |---|---| ||**SECTION 25(1) OF KVAT ACT DATED 3.12.2012**| ||**BEARING NO.32071307275/2011-12 PASSED BY**| ||**THE COMMERCIAL TAX OFFICER, SECOND CIRCLE,**| ||**KALAMASSERY AT CIVIL STATION, KAKKANAD.**| |**ANNEXURE B**|**A TRUE COPY OF THE ORDER DATED 30.5.2014 IN**| ||**KVATA NO.233 OF 2014.**| |**ANNEXURE C**|**TRUE PHOTO COPY OF THE COMMON ORDER OF THE**| ||**TRIBUNAL T.A.(VAT)NO.417 OF 2014 DATED**| ||**2.8.2019.**| OT.Rev.Nos.31,45,46,48,53, 62 & 63 OF 2020 18 ## **APPENDIX OF OT.Rev 53/2020** ## **PETITIONER'S/S EXHIBITS:** **ANNEXURE A A TRUE COPY OF THE ASSESSMENT ORDER UNDER SECTION 25(1) OF KVAT ACT DATED 03.12.2013 BEARING NO.32071307275/2011-12 PASSED BY THE COMMERCIAL TAX OFFICER, SECOND CIRCLE, KALAMASSERY AT CIVIL STATION, KAKKANAD. ANNEXURE B A TRUE COPY OF THE ORDER DATED 30.05.2014 IN KVATA NO.233 OF 2014. ANNEXURE C CERTIFIED COPY OF THE COMMON ORDER OF THE TRIBUNAL IN TA(VAT) NO.417 OF 2014 DATED 02.08.2019.** OT.Rev.Nos.31,45,46,48,53, 62 & 63 OF 2020 19 ## **APPENDIX OF OT.Rev 63/2020** ## **PETITIONER'S/S EXHIBITS:** |**ANNEXURE A**|**TRUE COPY OF ASSESSMENT ORDER U/S 25(1)**| |---|---| ||**DATED 3.12.2013 PASSED BY THE COMMERCIAL**| ||**TAX OFFICER, KVAT CIRCLE-II, KALAMASSERY**| |**ANNEXURE B**|**TRUE COPY OF THE ORDER DATED 30.05.2014 IN**| ||**KVTA NO.233/20914 PASSED BY THE ASSISTANT**| ||**COMMISSIONER (APPEALS), COMMERCIAL TAXES,**| ||**ERNAKULAM**| |**ANNEXURE C**|**TRUE COPY OF THE COMMON ORDER O THE KVAT**| ||**APPELLATE TRIBUNAL, ERNAKKULAM IN TA (VAT0**| ||**NO.417/2014 DATED 2.8.2019**|