T. Oommen Panicker (Managing Partner, Top Constructions) v. The Commercial Tax Officer, Works Contract, Kollam-01; The Deputy Commissioner (Appeals), KGST, Kollam-01; The District Collector, Kollam-01; The Tahsildar (RR), Taluk Office, Kottarakkara-691506; Government of Kerala represented by Secretary, Revenue/Taxes Department

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE V.G.ARUN** **FRIDAY ,THE 22ND DAY OF FEBRUARY 2019 / 3RD PHALGUNA, 1940** ## **WP(C).No. 39352 of 2017** ## **PETITIONER/S:** **T.OOMMEN PANICKER MANAGING PARTNER, TOP CONSTRUCTIONS, TOPS MANOR, PANAVELI P.O., KOTTARAKKARA** **BY ADV. SRI.S.ABDUL RAZZAK** ## **RESPONDENT/S:** **1 THE COMMERCIAL TAX OFFICER WORKS CONTRACT, KOLLAM-01 2 THE DEPUTY COMMISSIONER (APPEALS) KGST, KOLLAM-01 3 THE DISTRICT COLLECTOR CIVIL STATION, KOLLAM-01 4 THE TAHSILDAR (RR) TALUK OFFICE, KOTTARAKARA- 691 506 5 THE GOVERNMENT OF KERALA REP. BYS SECRETARY, REVENUE/TAXES DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM- 695 001** **OTHER PRESENT:** **SR.GP. C.K.GOVINDAN** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 25.01.2019, THE COURT ON 22.02.2019, DELIVERED THE FOLLOWING:** W.P.(C) 39352 of 2017 2 ## **JUDGMENT** The petitioner is the Managing Partner of a partnership firm by name M/s.Top Constructions, which is an assessee on the rolls of the first respondent. The firm had executed civil construction works for Munambam and Kannur - Azheekkal Cargo Harbour, during the period from 1994 to 2008. The petitioner was issued with Ext.P1 consolidated attachment notice dated 28.11.2008, under the Revenue Recovery Act. The demand raised in Ext.P1 was a consolidated demand, which contained the demand with respect to the sales tax arrears for the assessment years 1999-00 and 2000-01 also. As against the assessment year 1999-00, the petitioner had approached this Court by filing W.P.(C) No.19542 of 2005, which culminated in Ext.P3 judgment, directing the appeal against the assessment order to be disposed of within three W.P.(C) 39352 of 2017 3 months from the date of remittance of one third of the demand. According to the petitioner, the fate of the appeal was not communicated to the assessee. While so, the petitioner was issued with a sale notice dated 19.1.2009, proposing to sell his immovable properties attached under Ext.P1. That sale notice was challenged in W.P.(C) No.6016 of 2009 and interim orders were granted, as evidenced by Exts.P4 and P5. Ext.P6 sale notice was thereafter issued, which was subjected to challenge in W.P.(C) No.37300 of 2010. was As per Ext.P8 judgment, W.P.(C)No.6016 of 2009 dismissed as infructuous, without prejudice to the contentions urged by the petitioner in W.P.(C) No.37300 of 2010. This was for the reason that the petitioner had submitted that the demand in Ext.P6, which was challenged in W.P.(C) No.37300 of 2010 was inclusive of the demand based on the assessment W.P.(C) 39352 of 2017 4 orders for the years 1999-00 and 2000-01. W.P.(C) No.37300 of 2010 was thereafter disposed of setting aside the assessment orders for the years 1994-95 to 1997-98 and directing to finalise the assessment for the years 1994-95 to 1997-98, after affording an opportunity of hearing to the petitioner. Ext.P16, the consolidated notice issued under the Revenue Recovery Act was quashed, without prejudice to the right of the revenue authorities to initiate further proceedings after completing the assessment with respect to the sales tax dues. According to the petitioner, the assessment for the year 1999-00 was completed as per Ext.P9 order dated 15.3.2004 and the assessment for 2000-01 was completed under Ext.P10 order dated 28.3.2006. It is submitted that Ext.P10 order was communicated only on 23.9.2013, which was twelve years from the close of the relevant assessment year (2000-01). It is W.P.(C) 39352 of 2017 5 submitted that the limitation period for completing the assessment for the year 2000-01 had expired on 31.3.2005 in view of the period of four years prescribed in Section 17 (6) of the Kerala General Sales Tax Act, 1963, as amended from time to time. As the period of limitation had expired, Ext.P10 assessment order was invalid and therefore, the petitioner did not prefer a statutory appeal against Ext.P10. Later, communication was issued from the office of the first respondent to proceed with the revenue recovery proceedings initiated against the petitioner for recovery of sales tax arrears for the assessment years 1999-00 and 2000-01. Subsequently, Ext.P13 was issued by the first respondent correcting the amount due towards the sales tax arrears as Rs.33,12,536/- instead of Rs.38,41,934/- mentioned in Ext.P12. The writ petition was thereupon filed seeking to W.P.(C) 39352 of 2017 6 quash Ext.P13 requisition and for a direction to the respondents not to recover the arrears of sales tax for the assessment year 2000-01 demanded in Ext.P13. The challenge against Ext.P13 was on the basis that Ext.P10 assessment order was invalid in view of the limitation provided under the proviso to Section 17(6) of the KGST Act and Ext.P11 Circular. 2. The learned counsel for the petitioner mainly contended that the assessment for the year 2000-01 having been completed beyond the period of limitation the same is invalid and therefore, the recovery proceedings initiated for realisation of the amount due as per Ext.P10 assessment order, is liable to be quashed. The contention with respect to the assessment year 1999-00 is that the construction work undertaken by M/s.Top Constructions involved dumping of W.P.(C) 39352 of 2017 7 rubble of different dimensions at lines and levels specified in the departmental work schedule and that in Ext.P2 judgment, it was held by this Court that 'rubble' being an exempted commodity was not liable to be assessed for sales tax. It is contended that the above stated exemption for cost of rubble was lifted only in January, 2000 and therefore, the exemption was available for the assessment year 1999-00. It is submitted that in spite of the exemption, the assessment was completed without considering that claim. It is further contended that the assessing authority had failed to complete the assessment relating to the assessment years 1999-00 and 2000-01, as directed in Exts.P7 and P8 judgments and therefore, the assessment orders, on the basis of which revenue recovery proceedings were initiated, was invalid. 3. The first question to be considered is as to whether, W.P.(C) 39352 of 2017 8 any obligation to pass fresh assessment orders for the years 1999-00 and 2000-01, was cast upon the first respondent on the basis of the directions contained in Exts. P7 and P8 judgments. Even going by the case put forward by the petitioner, W.P.(C) No.6016 of 2009 was filed challenging the demand raised pursuant to the assessment orders for the years 1999-00 and 2000-01. That writ petition was disposed of vide Ext.P8 judgment, without prejudice to the contentions urged by the petitioner in W.P.(C) No.37300 of 2010. According to the petitioner, W.P.(C) No.37300 of 2010 was filed against a consolidated revenue recovery notice, which included the demand for sales tax dues for the assessment years 1999-00 and 2000-01 also. On a perusal of Ext.P7 judgment rendered in W.P.(C) No.37300 of 2010, it is evident that only the assessment orders for the years 1994-95 to W.P.(C) 39352 of 2017 9 1997-98 were set aside by that judgment. Therefore, the petitioner cannot contend that the directions contained in Ext.P7 judgment was applicable for the assessment years 1999-00 and 2000-01 also. Hence, the contentions put forward by the petitioner, based on Exts.P7 and P8 judgments, are without substance and hence rejected. 4. The next question to be considered is as to whether Ext.P9 assessment order for the year 1999-00 is bad for the reason that the exemption available to rubble till January, 2000 was not taken into consideration by the assessing authority. A reading of Ext.P9 would show that, in spite of a direction to produce the books of accounts, the same were not produced. The work schedule or work agreement were also not produced, in the absence of which the assessing authority had found it impossible to ascertain the materials required for W.P.(C) 39352 of 2017 10 the work. No evidence was produced to prove that the materials used in the execution of the work had suffered tax in the State of Kerala. In the absence of those crucial materials, the assessing officer was forced to reject the return and to complete the assessment by estimating the turn over to the best of his judgment, as provided under Section 5(c) of the KGST Act. It may also be pertinent to note that in the statement filed on behalf of the first respondent, it is stated that Ext.P9 order was challenged before the appellate authority and that by Order No.808/04 dated 20.9.2007, the appeal was dismissed. It is also stated that from 1.1.2000 onwards, rubble was taxable and therefore, the claim for exemption for the cost of rubble was not allowable for the period from 1.1.2000 to 31.3.2001. In my considered opinion, the assessee having failed to produce the requisite documents W.P.(C) 39352 of 2017 11 for the purpose of claiming exemption and having preferred an appeal against the assessment order, cannot be heard to contend that the assessment order was bad for the reason that a particular exemption was not taken into consideration by the assessing authority. For arriving at this conclusion, I also take note of the undisputed fact that the exemption claimed by the petitioner was not available through out the assessment year 1999-00. 5. The next and undoubtedly the principal contention raised on behalf of the petitioner, is that Ext.P10 assessment order is invalid, the same having been issued beyond the period prescribed under Section 17(6) of the KGST Act. Section 17(6), on which reliance is placed, reads as follows: “Section 17. **Procedure to be followed by the assessing authority.** (1)xxxx (2)xxxx W.P.(C) 39352 of 2017 12 (3) If no return is submitted by the dealer under Sub-section (1) within the prescribed period, or if the return submitted by him appears to the assessing authority to be incorrect or incomplete, the assessing authority shall, after making such enquiry as it may consider necessary and after taking into account all relevant materials gathered by it, assess the dealer to the best of its judgment. (4)xxxx (5)xxxx (6) Any assessment under this Section shall be completed within a period of four years from the expiry of the year to which the assessment relates.” 6. According to the petitioner, the assessment year being 2000-01, that year would expire on 31.3.2001 and therefore, the four year period would end by 31.03.2005. It is submitted that Ext.P10 assessment order is dated 28.03.2006 and is therefore, beyond the four year period. It is also submitted that even though Ext.P10 is dated 28.03.2006, it was served on the petitioner only on 23.09.2013 and that even W.P.(C) 39352 of 2017 13 as per the entry in the departmental records, the despatch date of Ext.P10 order is 4.09.2006, which is beyond the period of five years from the expiry of the year to which the assessment relates. It is submitted by the learned counsel for the petitioner that Ext.P11 Circular stipulate that an assessment order is complete and takes effect only on communication of that order. It is submitted that inasmuch as Ext.P10 order was issued beyond the period of limitation, the same is a nullity and that the revenue recovery proceedings initiated for realisation of the demand under Ext.P10 is therefore, illegal. Reliance is placed on the decisions in **Sarwan Kumar and another v. Madan Lal Aggarwal [(2003) 4 SCC 147] and Hasham Abbas Sayyad v. Usman Abbas Sayyad and others [(2007) 2 SCC 335]** to canvas the position that an order passed by a person lacking inherent W.P.(C) 39352 of 2017 14 jurisdiction would be a nullity and therefore, the principles of _estoppel,_ waiver and acquiescence or even _res judicata,_ which are procedural in nature, would have no application in a case where an order has been passed by the tribunal/court which _coram non_ had no authority. That, such an order would be “ _judice_ , being a nullity and the same ordinarily should not be given effect to. 7. A reading of Section 17(6) shows that the section casts a liability on the assessing officer to complete the assessment within a period of four years from the expiry of the year to which the assessment relates. Completion of the assessment does not mean communication of the order of assessment. Ext.P10 assessment was on completed 28.03.2006 and not on 23.09.2013 or even 4.09.2006, as contended by the petitioner. In this context, it may be W.P.(C) 39352 of 2017 15 pertinent to consider the amendment brought to the KGST Act, by virtue of the Finance Act, 2005. By the Finance Act of 2005, Section 17(6) was amended and fifth proviso added to Subsection 6 of Section 17, which reads as under: “Provided also that the assessment relating to the year 2000-01 shall be completed on or before 31[st] March, 2006.” Since Ext.P10 assessment order was on completed 28.03.2006, it was within the time provided under the fifth proviso to Section 17(6), as incorporated by the Finance Act, 2005. Ext.P11 Circular would not help the petitioner in any manner, since that circular was issued in the context of inordinate delay in completing the assessment and serving of assessment orders on the assessee leading to expiry of the period of limitation. Neither Ext.P11 nor any of the decisions therein lays down the position that an assessment order would be completed only on the order being served on the W.P.(C) 39352 of 2017 16 assessee. Hence, the contention that Ext.P10 order was issued beyond time, is liable to be rejected. Moreover, as revealed from Exts.R1(a) and (b), the assessee had challenged Ext.P10 order and the appellate authority had confirmed the assessment order and had directed to recompute the interest in accordance with law. Having failed to raise the question of limitation before the appellate authority, the same cannot be permitted to be raised for the first time in a writ petition filed under Article 226 of the Constitution of India. Therefore, I find no sustainable ground of challenge against Ext.P13 or any valid reason for granting the reliefs sought in the writ petition. Consequently, the writ petition is dismissed. Sd/- **V.G.ARUN JUDGE** Scl/ W.P.(C) 39352 of 2017 17 ## **APPENDIX** **PETITIONER'S/S EXHIBITS:** - **EXHIBIT P1** **TRUE COPY OF THE BYELAWS OF PETITIONER** - **EXHIBIT P2** **TRUE COPY OF THE MEMORANDUM AND ARTICLES OF ASSOCIATION OF 3RD RESPONDENT COMPANY** - **EXHIBIT P3 TRUE COPY OF THE NOTIFICATION DATED 27.05.2015 CALLING FOR APPLICATIONS FOR THE POST OF CMD OF 3RD RESPONDENT** - **EXHIBIT P4 TRUE COPY OF LIST OF CANDIDATES INTERVIEWED** - **EXHIBIT P5` TRUE COPY OF THE GUIDELINES FOR 4TH RESPONDENT** **EXHIBIT P6** - **TRUE COPY OF THE NOTIFICATION DATED 15.11.2017 ISSUED BY 1ST RESPONDENT CALLING FOR APPLICATIONS FOR THE POST OF CMD OF 3RD RESPONDENT** - **EXHIBIT P7 TRUE COPY OF THE NOTIFICATION DATED 08.03.2018 ISSUED BY 1ST RESPONDENT CALLING FOR APPLICATIONS FOR THE POST OF CMD 3RD RESPONDENT** - **EXHIBIT P8 TRUE COPY OF THE DECISION DATED 01.12.2017 OF 4TH RESPONDENT** - **EXHIBIT P9 TRUE COPY OF THE ASSESSMENT ORDER DATED 15.3.2004 FOR 1999-2000.** **EXHIBIT P10 TRUE COPY OF THE ASSESSMENT ORDER DATED 28.3.2006 FOR 2000-01** - **EXHIBIT P11 TRUE COPY OF THE CIRCULAR NO.30/95/TX** W.P.(C) 39352 of 2017 18 **EXHIBIT P12 TRUE COPY OF REQUISITION NO.12240039/ 1999-2000 & 2000-01 DATED 25.4.2017. EXHIBIT P13 TRUE COPY OF REQUISITION NO.12240039/ 1999-2000 & 2000-01 DATED 3.6.2017.** **EXHIBIT P14 TRUE COPY OF RECTIFICATION APPLICATION DATED 12.6.2017.** **EXHIBIT P15 TRUE COPY OF REPRESENTATION DT. 11.10.2017 BY THE PETITIONER TO R3.** **RESPONDENT'S EXHIBITS:** **ANNEXURE R1(A): TRUE COPY OF THE APPELLATE ORDER IN STA (WC& LT) 469/06 DATED 28.7.2008.** **ANNEXURE R1(B): TRUE COPY OF THE NOTICE DATED 30.10.2009.** **ANNEXURE R1(C): TRUE COPY OF THE ACKNOWLEDGEMENT CARD.**