W.P.(C) No.37366 of 2016 and connected cases

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH TUESDAY, THE 8[TH] DAY OF AUGUST 2023 / 17TH SRAVANA, 1945 ``` ## **`WP(C) NO. 37366 OF 2016`** ## **`PETITIONER/S:`** ``` 1P.K.AYMU HAJI, AGED 65 YEARS, S/O KUTTIALI HAJI, PATTARAKADAVAN HOUSE, PATTARAKADAVAN P.O., MALAPPURAM -676519. (PROPRIETOR, M/S. SAHARA GOLD PARK, 24/4 B, KOTTAPADI, MALAPPURAM) ``` ``` 2MOIDEEN KUTTY, AGED 58 YEARS, S/O ALIKUTTY HAJI, NAJATH GOLD SUPER MARKET,KOTTAPPADY, VALAMNANGALAM,MANJERI, MALAPPURAM DISTRICT. (PROPRIETOR M/S. NAJATH GOLD SUPER MARKET,MM 17/426C, MASJID COMPLEX, KOTTAPPADI, MALAPPURAM) ``` ``` 3K. JALEEL, AGED 45 YEARS, S/O ADBULLAKUTTY,NTK HOUSE, MANJERI, MADANGODE-676122. (PROPRIETOR, M/S N.T.K. JEWELLERS,MM 20/134, MANJERI) ``` ``` BY ADVS. SRI.K.SHAJ SRI.RENJIT GEORGE ``` ## **`RESPONDENT/S:`** - `1 THE STATE OF KERALA, REPRESENTED BY THE ADDITIONAL CHIEF SECRETARY(TAXES), TAXES DEPARTMENT, ABOVE OLD ASSEMBLY HALL,GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM.695001.` - `2 THE COMMISSIONER OF COMMERCIAL TAXES, OFFICE OF THE COMMISSIONER OF COMMERCIAL TAXES, 9TH FLOOR, TAX TOWERS, KILLIPPALAM, KARAMANA PO, THIRUVANANTHAPURAM- 695002.` - `3 THE COMMERCIAL TAX OFFICER – 1, OFFICE OF THE COMMERCIAL TAX OFFICER,DEPARTMENT OF COMMERCIAL TAXES, MANJERI,MALAPPURAM DISTRICT- 676121.` ``` BY ADV. ARUN AJAY SANKAR-GP ``` **2** ## **W.P.(C) No.37366 of 2016 and connected cases** ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.08.2023, ALONG WITH WP(C).40242/2016, 40481/2016 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` **W.P.(C) No.37366 of 2016 and connected cases** **3** ## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH TUESDAY, THE 8[TH] DAY OF AUGUST 2023 / 17TH SRAVANA, 1945 WP(C) NO. 40242 OF 2016 ``` ## **`PETITIONER/S:`** ``` M/S KAVITHA GOLD AND DIAMONDS, OTTAPALAM REPRESENTED BY ITS MANAGING PARTNER, T.P.RAJAGOPAL, AGED 62 YEARS, S/O.KUTTIRAMAN, RAJAPRASTHAM, KOONATHARA, OTTAPALAM, PALAKKAD DISTRICT. ``` ``` BY ADVS. HARISANKAR V. MENON MEERA V.MENON ``` ## **`RESPONDENT/S:`** ``` 1THE STATE OF KERALA REPRESENTED BY THE ADDITIONAL CHIEF SECRETARY (TAXES), TAXES DEPARTMENT, ABOVE OLD ASSEMBLY HALL, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM - 695 001. ``` ``` 2THE COMMISSIONER OF COMMERCIAL TAXES, OFFICE OF THE COMMISSIONER OF COMMERCIAL TAXES, 9TH FLOOR, TAX TOWERS, KILLIPPALAM, KARAMANA P.O., THIRUVANANTHAPURAM - 695 002. ``` ``` 3THE COMMERCIAL TAX OFFICER, OFFICE OF THE COMMERCIAL TAX OFFICER, DEPARTMENT OF COMMERCIAL TAXES, OTTAPALAM - 679 101. ``` ``` BY ADVS. ARUN AJAY SANKAR (GOVERNMENT PLEADER) ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.08.2023, ALONG WITH WP(C).37366/2016 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` **W.P.(C) No.37366 of 2016 and connected cases** **4** ## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH TUESDAY, THE 8[TH] DAY OF AUGUST 2023 / 17TH SRAVANA, 1945 ``` ## **`WP(C) NO. 40481 OF 2016`** ## **`PETITIONER/S:`** ``` M/S. PONNANI GOLD PVT. LTD KUTTIKKAD, CHANDAPPADI, PONNANI REP. BY ITS MANAGING DIRECTOR IBRAHIMKUTTY, S/O HYDROSE MUSLIYAR, AGED 33 YEARS, PALASSERY HOUSE, VALIYORA P.O. VIA VENGARA, MALAPPURAM DISTRICT- 676 304. ``` ``` BY ADVS. SRI.K.SHAJ SMT.ANJU MOHAN SRI.RENJIT GEORGE ``` ## **`RESPONDENT/S:`** ``` 1THE STATE OF KERALA, REP. BY THE ADDITIONAL CHIEF SECRETARY (TAXES), TAXES DEPARTMENT, ABOVE OLD ASSEMBLY HALL, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695 001. ``` ``` 2THE COMMISSIONER OF COMMERCIAL TAXES, OFFICE OF THE COMMISSIONER OF COMMERCIAL TAXES, 9TH FLOOR, TAX TOWERS, KILLIPPALAM, KARAMANA P.O. THIRUVANANTHAPURAM- 695 002. ``` - `3 THE COMMERCIAL TAXE OFFICER-1, OFFICE OF THE COMMERCIAL TAX OFFICER, DEPARTMENT OF COMMERCIAL TAXES, PONNANI- 679 583.` ``` BY ADV. ARUN AJAY SANKAR (GOVERNMENT PLEADER) ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.08.2023, ALONG WITH WP(C).37366/2016 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` **W.P.(C) No.37366 of 2016 and connected cases** **5** ## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH TUESDAY, THE 8[TH] DAY OF AUGUST 2023 / 17TH SRAVANA, 1945 ``` ## **`WP(C) NO. 40690 OF 2016`** ## **`PETITIONER/S:`** ``` M/S.RAJADHANI GOLD, THALIPARAMBA, REPRESENTED BY ITS MANAGING PARTNER, K.C. MOIDEEN, S/O.AHAMMED KUTTY, AGED 62 YEARS, KARATTUCHALIL HOUSE, KAMBLAKKAD P.O, WAYANAD. ``` ``` BY ADVS. SRI.K.SHAJ SRI.RENJIT GEORGE ``` ## **`RESPONDENT/S:`** ``` 1STATE OF KERALA REPRESENTED BY THE ADDITIONAL CHIEF SECRETARY(TAXES), TAXES DEPARTMENT, ABOVE OLD ASSEMBLY HALL, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695001. ``` ``` 2THE COMMISSIONER OF COMMERCIAL TAXES, OFFICE OF THE COMMISSIONER OF COMMERCIAL TAXES, 9TH FLOOR, TAX TOWERS, KILLIPPALAM, KARAMANA P.O, THIRUVANANTHAPURAM-695002. ``` ``` 3THE COMMRCIAL TAX OFFICER, OFFICE OF THE COMMERCIAL TAX OFFICER, DEPARTMENT OF COMMERCIAL TAX, THALIPARAMBA, KANNUR DISTRICT -670141. ``` ``` BY ADV ARUN AJAY SANKAR (GOVERNMENT PLEADER) ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.08.2023, ALONG WITH WP(C).37366/2016 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` **W.P.(C) No.37366 of 2016 and connected cases** **6** ## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH TUESDAY, THE 8[TH] DAY OF AUGUST 2023 / 17TH SRAVANA, 1945 WP(C) NO. 41008 OF 2016 ``` ## **`PETITIONER/S:`** ``` M/S. MINAR GOLD PVT. LTD., KANHANGAD REPRESENTED BY ITS MANAGING DIRECTOR, JAMEESHMASAD A.K., AGED 38 YEARS, S/O.ASSANKOYA C.P., MARINA HOUSE, CHERIYALINGALPARAMBA, M.M.ALI ROAD, KOZHIKODE - 673 002. BY ADV. K.SHAJ ADV. RENJIT GEORGE ``` ## **`RESPONDENT/S:`** ``` 1THE STATE OF KERALA, REPRESENTED BY THE ADDITIONAL CHIEF SECRETARY (TAXES), TAXES DEPARTMENT, ABOVE OLD ASSEMBLY HALL, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM - 695 001. 2THE COMMISSIONER OF COMMERCIAL TAXES, OFFICE OF THE COMMISSIONER OF COMMERCIAL TAXES, 9TH FLOOR, TAX TOWERS, KILLIPPALAM, KARAMANA P.O., THIRUVANANTHAPURAM - 695 002. 3THE COMMERCIAL TAX OFFICER, OFFICE OF THE COMMERCIAL TAX OFFICER, DEPARTMENT OF COMMERCIAL TAXES, HOSDURG - 671 312. BY ADV. ARUN AJAY SHANKAR (GOVERNMENT PLEADER) ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.08.2023, ALONG WITH WP(C).37366/2016 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` **W.P.(C) No.37366 of 2016 and connected cases** **7** ## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH TUESDAY, THE 8[TH] DAY OF AUGUST 2023 / 17TH SRAVANA, 1945 WP(C) NO. 41025 OF 2016 ``` ## **`PETITIONER/S:`** ``` M/S.EDAKKARA GOLD PRIVATE LIMITED, EDAKKARA, REPRESENTED BY ITS MANAGING DIRECTOR, IBRAHIMKUTTY PALASSERI, S/O HYDROSE MUSLIYAR, AGED 33 YEARS, PALASSERI HOUSE,VALIYORA PO, VIA VENGARA, MALAPPURAM DISTRICT – 676304. ``` ``` BY ADVS. SRI.K.SHAJ SRI.RENJIT GEORGE ``` ## **`RESPONDENT/S:`** - `1 STATE OF KERALA REPRESENTED BY THE ADDITIONAL CHIEF SECRETARY(TAXES), TAXES DEPARTMENT, ABOVE OLD ASSEMBLY HALL, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM -695001.` ``` 2THE COMMISSIONER OF COMMERCIAL TAXES, OFFICE OF THE COMMISSIONER OF COMMERCIAL TAXES, 9TH FLOOR, TAX TOWERS, KILLIPPALAM,KARAMANA PO, THIRUVANANTHAPURAM – 695002. ``` - `3 THE COMMERCIAL TAX OFFICER, OFFICE OF THE COMMERCIAL TAX OFFICER, DEPARTMENT OF COMMERCIAL TAXES, EDAKKARA – 679101.` ``` BY ADV. ARUN AJAY SANKAR (GOVERNMENT PLEADER) ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.08.2023, ALONG WITH WP(C).37366/2016 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` **W.P.(C) No.37366 of 2016 and connected cases** **8** ## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH TUESDAY, THE 8[TH] DAY OF AUGUST 2023 / 17TH SRAVANA, 1945 WP(C) NO. 41510 OF 2016 ``` ## **`PETITIONER/S:`** ``` M/S.PEARL JEWELLERS, THRISSUR – 680 001 REPRESENTED BY ITS MANAGING PARTNER, RAJAN P.B, AGED 64 YEARS,S/O.BALAN, PERUMBILLESSERIL HOUSE, PALAKKAL, PALISSERY POST, THRISSUR-680 027. ``` ``` BY ADVS. SRI.K.SHAJ SRI.RENJIT GEORGE ``` ## **`RESPONDENT/S:`** ``` 1STATE OF KERALA REPRESENTED BY THE ADDITIONAL CHIEF SECRETARY(TAXES), TAXES DEPARTMENT, ABOVE OLD ASSEMBLY HALL, GOVERNMENT SECRETARIAT,THIRUVANANTHAPURAM -695 001. ``` ``` 2THE COMMISSIONER OF COMMERCIAL TAXES, OFFICE OF THE COMMISSIONER OF COMMERCIAL TAXES, 9TH FLOOR, TAX TOWERS, KILLIPPALAM,KARAMANA.P.O., THIRUVANANTHAPURAM - 695 002. ``` ``` 3THE COMMERCIAL TAX OFFICER-I (1ST CIRCLE), OFFICE OF THE COMMERCIAL TAX OFFICER, 1ST CIRCLE, POOTHOLE, THRISSUR - 680 004. ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.08.2023, ALONG WITH WP(C).37366/2016 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` **W.P.(C) No.37366 of 2016 and connected cases** **9** ## **JUDGMENT** 1. The present bunch of writ petitions has been filed against the assessment orders passed for the assessment year 2013-2014 onwards under the Kerala Value Added Taxes Act, 2003. In W.P.(C) No.37366 of 2016 there is an extra prayer i.e., prayer ‘F’, which is as follows; “ **F** . to declare that the third petitioner's partnership concern has not made a short remittance of Rs.96,410/- for the year 2013-2014 and that the compounded tax payable by the third petitioner’s partnership concern was 115% for the respectively financial years and not 125% as stated in Exhibit P-5 notice and that the demand for short remittance amounts as stated in Exhibit P-5 notice are bad in law and to quash the same on this ground too.” 2. Learned Counsel for the petitioner submits that he is not pressing for prayer ‘F’ and as well as in respect of other prayers there is no dispute that the issue involved in the writ petitions is covered by the judgment of the coordinate bench of this Court in _**W.P.(C) No.32456 of 2016 (F) M/s. Josco Fashion Jewelers v. State of Kerala and others and connected cases dated 10.07.2017**_ . The operative portion of the judgment reads as under; “ **2.** During the pendency of these writ petitions, the Kerala Finance Act, 2017, was enacted with effect from 1.4.2017. Through the said Act, Section 6(2) of the KVAT Act was amended by inserting the following proviso to Section 6(2)(a), namely, **W.P.(C) No.37366 of 2016 and connected cases** **10** _“provided that notwithstanding anything contained in clause (f) of Section 8, a dealer paying compounded tax for the goods mentioned in that clause, shall not be liable to pay tax under this sub section on such goods with effect from 1 st April, 2013”._ The amendment aforementioned has the effect of clarifying that, dealers paying tax on compounded basis under Section 8(f), need not pay tax under Section 6(2) of the KVAT Act, on the goods in question, with effect from 1.4.2013. In view of the amendment with effect from 1.4.2013, these writ petitions are allowed, by quashing the impugned notices that propose an assessment to purchase tax, the impugned orders, to the extent, they confirm a demand of purchase tax and the impugned penalty orders, to the extent, they are based on the aforementioned assessment orders. The respondent shall do the needful in finalising the assessments and penalty proposals in relation to the petitioners on the basis of the observations in this judgment.” 3. In view of the aforesaid judgment of the Coordinate Bench of this Court, these writ petitions are allowed and the impugned notices that proposed an assessment to purchase tax, the impugned orders to the extent they confirm a demand of purchase tax and the impugned penalty orders to the extent they are based on the aforementioned assessment orders are hereby quashed. The **W.P.(C) No.37366 of 2016 and connected cases** **11** assessment orders need to be passed keeping in mind the directions issued by this Court in the judgment in _**W.P.(C) No.32456 of 2016 (F) dated 10.07.2017 and connected cases (supra).**_ **Sd/DINESH KUMAR SINGH JUDGE** Svn **W.P.(C) No.37366 of 2016 and connected cases** **12** ## **`APPENDIX OF WP(C) 37366/2016`** ## **`PETITIONER’S EXHIBITS`** ``` EXHIBIT P1TRUE COPY OF THE NOTICE DATED 6.9.2016 ISSUED BY THE THIRD RESPONDENT TO THE FIRST PETITIONER'S PARTNERSHIP CONCERN COVERING THE ASSESSMENT YEAR 2014-2015 ``` - `EXHIBIT P2 TRUE COPY OF THE NOTICE DATED 20.9.2016 ISSUED BY THE THIRD RESPONDENT TO THE SECOND PETITIONER'S PARTNERSHIP CONCERN COVERING THE ASSESSMENT YEAR 2013-2014` - `EXHIBIT P3 TRUE COPY OF THE NOTICE DATED 20.9.2016 ISSUED BY THIRD RESPONDENT TO THE THIRD PETITIONER'S PARTNERSHIP CONCERN COVERING THE ASSESSMENT YEAR 2013-2014` - `EXHIBIT P4 TRUE COPY OF NOTICE DATED 20.9.2016 ISSUED BY THE THIRD RESPONDENT TO THE THIRD PETITIONER'S PARTNERSHIP CONCERN COVERING THE ASSESSMENT YEAR 2014-2015` ``` EXHIBIT P5TRUE COPY OF THE NOTICE DATED 20.9.2016 ISSUED BY THE THIRD RESPONDENT TO THE THIRD PETITIONER'S PARTNERSHIP CONCERN DEMANDING ALLEGED EVADED TAX FOR THE ASSESSMENT YEAR 2013-2014 ``` **W.P.(C) No.37366 of 2016 and connected cases** **13** ## **`APPENDIX OF WP(C) 40481/2016`** ## **`PETITIONER’S EXHIBITS`** ``` EXHIBIT P1TRUE COPY OF NOTICE DATED 01-09-2016 UNDER SECTION 25(1) COVERING THE ASSESSMENT YEAR 2013-14 ISSUED BY THE THIRD RESPONDENT TO THE PETITIONER COMPANY ``` ``` EXHIBIT P2TRUE COPY OF NOTICE DATED 01-09-2016 ISSUED BY THE THIRD RESPONDENT TO THE PETITIONER COMPANY ``` ``` EXHIBIT P3TRUE COPY OF NOTICE DATED 15-11-2016 ISSUED BY THE THIRD RESPONDENT TO THE PETITIONER COMPANY ``` **W.P.(C) No.37366 of 2016 and connected cases** **14** ## **`APPENDIX OF WP(C) 40690/2016`** ## **`PETITIONER’S EXHIBITS`** ``` EXHIBIT P1TRUE COY OF NOTICE COVERING THE ASSESSMENT YEAR 2013-2014 ISSUED BY THE THIRD RESPONDENT TO THE PETITIONER ``` ``` EXHIBIT P2TRUE COPY NOTICE COVERING THE ASSESSMENT YEAR 2014-2015 ISSUED BY THE THIRD RESPONDENT TO THE PETITIONER ``` **W.P.(C) No.37366 of 2016 and connected cases** **15** ## **`APPENDIX OF WP(C) 41008/2016`** ## **`PETITIONER’S EXHIBITS`** ``` EXHIBIT P1TRUE COPY OF ORDER DATED 17/11/2016 AND DEMAND NOTICE COVERING THE ASSESSMENT YEAR 2012-2013 ISSUED BY THE THIRD RESPONDENT TO THE PETITIONER COMPANY ``` ``` EXHIBIT P2TRUE COPY OF ORDER DATED 17/11/2016 AND DEMAND NOTICE COVERING THE ASSESSMENT YEAR 2013-2014 ISSUED BY THE THIRD RESPONDENT TO THE PETITIONER COMPANY ``` **W.P.(C) No.37366 of 2016 and connected cases** **16** ## **`APPENDIX OF WP(C) 41025/2016`** ## **`PETITIONER’S EXHIBITS`** ``` EXHIBIT P1TRUE COPY OF THE ORDER DATED 21.11.2016 AND DEMAND NOTICE COVERING THE ASSESSMENT YEAR 2014-2015 ISSUED BY THE THIRD RESPONDENT TO THE PETITIONER COMPANY ``` **W.P.(C) No.37366 of 2016 and connected cases** **17** ## **`APPENDIX OF WP(C) 41510/2016`** ## **`PETITIONER’S EXHIBITS`** ``` EXHIBIT P1TRUE COPY OF APPLICATION DATED 31.08.2016 UNDER FORM 1B OF THE KERALA VALUE ADDED TAX RULES, 2005 SUBMITTED BY THE PETITIONER FIRM BEFORE THE THIRD RESPONDENT. ``` ``` EXHIBIT P2TRUE COPY OF THE COMPOUNDING ORDER DATED 28.09.2016 ISSUED BY THE THIRD RESPONDENT TO THE PETITIONER. ``` **W.P.(C) No.37366 of 2016 and connected cases** **18** ## **`APPENDIX OF WP(C) 40242/2016`** ## **`PETITIONER EXHIBITS`** ``` EXHIBIT P1TRUE COPY OF ORDER DATED 19-11-2016 AND DEMAND NOTICE COVERING THE ASSESSMENT YEAR 2013-2014 ISSUED BY THE THIRD RESPONDENT TO THE PETITIONER FIRM ``` ``` EXHIBIT P2TRUE COPY OF ORDER DATED 19-11-2016 AND DEMAND NOTICE COVERING THE ASSESSMENT YEAR 2014-2015 ISSUED BY THE THIRD RESPONDENT TO THE PETITIONER FIRM ```