High Court of KeralaSingle Judge2021-09-14Disposed of

W.P.(C) Nos. 18820, 18833, 18915 and 18948 of 2021

Case / Petition Number:WP(C) Nos. 18820/2021; 18833/2021; 18915/2021; 18948/2021

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Bechu Kurian Thomas
Judgment Date: 2021-09-14
Court Decision / Holding: Writ petitions disposed of. Recovery/ RR proceedings kept in abeyance for 30 days to enable the petitioners to move the appellate authority; petitioners to pursue second appeals; merits of the tax discounts/credit-note issue to be considered by the appropriate appellate/forum (Full Bench/Tribunal)
Final Disposition: Disposed of

Parties to the Case

Appellants / Petitioners

C.M. Jose
Jeffin Mathew Jose

Respondents

Deputy Commissioner (Appeals), KSGST Department, Asramam P.O., Kollam-691 002
Assistant Commissioner, KSGST Department, PRB Building, Market Jn., Kottarakkara, Kollam-691 506
Deputy Tahsildar, Taluk Office, Kottarakkara, Kollam-691 506

Legal Representation & Advocates

Counsels for Petitioners

• V. Devananda Narasimham

Counsels for Respondents

• Dr. Thushara James

Case Synopsis & Summary

Four writ petitions—WP(C) Nos. 18820/2021, 18833/2021, 18915/2021 and 18948/2021—were heard together challenging Ext. P2 assessment orders for the 2014-15 year and Ext. P3 common appellate orders under the Kerala KVAT Act. The petitions challenge tax liability on discounts and incentives/credit notes issued post-purchase from suppliers, with arguments spanning several issues in the assessments for AY 2014-15, 2015-16 and 2016-17. The petitioners contended that identical issues across these four cases have been referred to a Full Bench by a reference order dated 27.07.2020 in Memana Agencies v. The Commercial Tax Officer, Cherthala (W.P.(C) No.5467/2017), and therefore the writ petitions should be admitted while awaiting the Full Bench decision. The respondents emphasized that there exists an effective statutory remedy—second appeal before the VAT/Tax Tribunal—and that entertaining writ petitions merely because one issue is referred to the Full Bench is inappropriate, especially since a recovery (RR) process had already commenced. Ultimately, the court granted a breathing time of 30 days to enable petitioners to approach the appellate authority and directed that RR proceedings be kept in abeyance during this period. The petitions are disposed of in terms described, leaving the merits of the disputed tax questions to the Full Bench/appeals while preserving a right to appeal.

Provisions of Law Cited

KVAT Act, Sec. 25(1)RR Act, Sec. 7 and 34

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners argued that the issue of levy of tax on discounts/incentives received by credit notes after purchases from suppliers has been referred to a Full Bench by a reference order dated 27.07.2020 (Memana Agencies v. The Commercial Tax Officer, Cherthala). Since the four petitions involve identical issues, they should be admitted and kept alive awaiting the Full Bench decision; additionally, revenue recovery measures should be stayed to prevent irreparable loss while seeking appellate remedies.

Contentions of Respondents

The respondents contended that an effective remedy exists in the statutory route (second appeal before the VAT Tribunal), and entertaining writ petitions would be inappropriate merely because one issue is referred to the Full Bench. They urged relegation to statutory remedies and argued that the recovery proceedings could be kept in abeyance only for a limited time, with no warrant to bypass the appellate process.

Cited Precedents (3)

Case Name	Citation	Treatment	Explanation
Memana Agencies v. The Commercial Tax Officer, Cherthala	W.P.(C) No.5467/2017	Mentioned Only	Referenced as the contemplated Full Bench reference that prompted the petitions but the present order does not decide the issue there; it simply notes the reference and proceeds with a breathing-time disposition.
W.P.(C) No.5467/17; O.T.Rev NOS 132, 137/19 etc.	W.P.(C) No.5467/17; O.T.Rev Nos 132, 137/19	Mentioned Only	Mentioned as the repository of the reference order guiding the Full Bench reference; no substantive adoption of its reasoning in the present judgment.
TRUE COPY OF JUDGMENT OF THIS HON'BLE COURT DATED 02.12.15 IN WPC NO.5077/09	WPC 5077/09	Mentioned Only	Cited as a prior judgment in Appendix; the current judgment does not discuss its ratio or application, thus treated as merely referenced.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS** **TUESDAY, THE 14[TH] DAY OF SEPTEMBER 2021 / 23RD BHADRA, 1943** ## **WP(C) NO. 18820 OF 2021** ## **PETITIONER/S:** **C.M.JOSE AGED 64 YEARS PROPRIETOR, KALLETHU AGENCIES, THEVALAPURAM, PUTHOOR, KOTTARAKKARA, KOLLAM-691 507.** ## **BY ADV V.DEVANANDA NARASIMHAM** **RESPONDENTS:** - **1 THE DEPUTY COMMISSIONER (APPEALS) KSGST DEPARTMENT, ASRAMAM P.O., KOLLAM-691 002** - **2 THE ASSISTANT COMMISSIONER, KSGST DEPARTMENT, PRB BUILDING, MARKET JN., KOTTARAKKARA ,KOLLAM-691 506** - **3 THE DEPUTY TAHSILDAR, TALUK OFFICE, KOTTARAKKARA, KOLLAM-691 506** ## **DR.THUSHARA JAMES-SR GP** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14.09.2021, ALONG WITH WP(C).18833/2021, 18915/2021 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C) Nos.18820, 18833, 18915 and 18948 of 2021 **2** ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS TUESDAY, THE 14[TH] DAY OF SEPTEMBER 2021 / 23RD BHADRA, 1943 WP(C) NO. 18833 OF 2021** ## **PETITIONER:** **JEFFIN MATHEW JOSE AGED 29 YEARS PROPRIETOR, KALLETHU STEELS, CHEMANGADU, PUTHOOR, KOTTARAKKARA, KOLLAM-691 507 BY ADV V.DEVANANDA NARASIMHAM** ## **RESPONDENTS:** |**1**|**THE DEPUTY COMMISSIONER ( APPEALS )**| |---|---| ||**KSGST DEPARTMENT,**| ||**ASRAMAM P.O.,**| ||**KOLLAM-691 002**| |**2**|**THE ASSISTANT COMMISSIONER,**| ||**KSGST DEPARTMENT,**| ||**PRB BUILDING,**| ||**MARKET JN., KOTTARAKKARA,**| ||**KOLLAM-691 506**| |**3**|**THE DEPUTY TAHSILDAR,**| ||**TALUK OFFICE,**| ||**KOTTARAKKARA ,KOLLAM-691 506**| ## **DR.THUSHARA JAMES-SR GP** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14.09.2021, ALONG WITH WP(C).18820/2021 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C) Nos.18820, 18833, 18915 and 18948 of 2021 **3** ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS TUESDAY, THE 14[TH] DAY OF SEPTEMBER 2021 / 23RD BHADRA, 1943 WP(C) NO. 18915 OF 2021** ## **PETITIONER/S:** **JEFFIN MATHEW JOSE, AGED 29 YEARS PROPRIETOR, KALLETHU STEELS, CHEMANGADU, PUTHOOR, KOTTARAKKARA, KOLLAM 691 507. BY ADV V.DEVANANDA NARASIMHAM** ## **RESPONDENTS:** |**1**|**THE DEPUTY COMMISSIONER (APPEALS)**| |---|---| ||**KSGST DEPARTMENT,**| ||**ASRAMAM P.O.,**| ||**KOLLAM 691 002.**| |**2**|**THE ASSISTANT COMMISSIONER,**| ||**KSGST DEPARTMENT,**| ||**PRB BUILDING,**| ||**MARKET JN, KOTTARAKKARA,**| ||**KOLLAM, 691 506.**| |**3**|**THE DEPUTY TAHSILDAR,**| ||**TALUK OFFICE,**| ||**KOTTARAKKARA,**| ||**KOLLAM 691 506.**| ## **DR.THUSHARA JAMES-SR GP** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14.09.2021, ALONG WITH WP(C).18820/2021 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C) Nos.18820, 18833, 18915 and 18948 of 2021 **4** ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS** **TUESDAY, THE 14[TH] DAY OF SEPTEMBER 2021 / 23RD BHADRA, 1943 WP(C) NO. 18948 OF 2021** ## **PETITIONER/S:** **JEFFIN MATHEW JOSE AGED 29 YEARS PROPRIETOR, KALLETHU STEELS, CHEMANGADU, PUTHOOR, KOTTARAKKARA, KOLLAM-691 507. BY ADV V.DEVANANDA NARASIMHAM** ## **RESPONDENTS:** |**1**|**DEPUTY COMMISSIONER (APPEALS)**| |---|---| ||**KSGST DEPARTMENT,**| ||**ASRAMAM P.O.,**| ||**KOLLAM-691 002.**| |**2**|**THE ASSISTANT COMMISSIONER,**| ||**KSGST DEPARTMENT,**| ||**PRB BUILDING, MARKET JN,**| ||**KOTTARAKKARA, KOLLAM-691 506.**| |**3**|**THE DEPUTY TAHSILDAR**| ||**TALUK OFFICE,**| ||**KOTTARAKKARA, KOLLAM-691 506.**| ## **DR.THUSHARA JAMES-SR GP** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14.09.2021, ALONG WITH WP(C).18820/2021 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C) Nos.18820, 18833, 18915 and 18948 of 2021 **5** ## BECHU KURIAN THOMAS, J ============================ W.P.(C) Nos.18820, 18833, 18915 and 18948 of 2021 -------------------------------------------Dated this the 14[th] day of September, 2021 ## JUDGMENT These writ petitions are preferred challenging Ext.P2 order of assessment for the assessment years 2014-15, and also Ext.P3 common order of the First Appellate Authority for the assessment years 2014-15 2015-16 and 2016-17, in respect of two different assessees. The first appeals preferred by the petitioners were also dismissed. 2. The main contention taken by the petitioners is that the issue on levy of tax on discounts/incentives received by credit notes subsequent to the purchase from suppliers has been referred for consideration to the Full Bench by reference order dated 27.07.2020 in Memana Agencies v. The Commercial Tax Officer, W.P.(C) Nos.18820, 18833, 18915 and 18948 of 2021 **6** Cherthala (W.P.(C) No.5467/2017). According to the petitioner, since identical issues arise in these four cases, the writ petitions are required to be admitted, awaiting the decision of the Full Bench. 3. I have heard Adv.V.Devananda Narasimham, the learned counsel for the as well as petitioner Adv.Dr.Thushara James, learned Senior Government Pleader. 4. On a perusal of order of assessement, which is produced as Ext.P2 as well as the first appellate order produced as Ext.P3 in all these cases, it can be seen that several issues have been considered in each of the assessment years and several questions have been raised for consideration in the appeals. The levy of tax on discounts or incentives received by credit notes was only one of the issues amongst many other issues that arose for consideration in those assessment years. Merely because, one of the W.P.(C) Nos.18820, 18833, 18915 and 18948 of 2021 **7** issues in the order of assessment has been referred to the Full Bench, the same is not a reason for entertaining these writ petitions especialy when an effective remedy of a second appeal before the Tribunal is available to the petitioner. Accordingly, the petitioners ought to be relegated to the remedies under the Statute. A second appeal is available to the petitioners against Ext.P3 order in all these writ petitions. 5. When this Court expressed its disinclination to entertain these writ petitions, the learned counsel for the petitioner submitted that, petitioner apprehends coercive proceedings to be completed by the time petitioner approaches the appellate authority. It was also pointed out that revenue recovery proceedings have already been initiated as evident from Ext.P4 and therefore the appeals may itself become infructuous. It is also pleaded that in view of the W.P.(C) Nos.18820, 18833, 18915 and 18948 of 2021 **8** peculiar situation now prevailing, unless the revenue are to enable the recovery proceedings stayed, petitioner to get a breathing time for preferring the appeal, the petitioner will be subjected to irrepareable loss and hardships. 6. I find merit in the aforesaid submission, I am of the considered view that a breathing time ought to be granted to the petitioner to move the appellate the revenue authority. Accordingly, recovery proceedings initiated as Ext.P4, in all these four writ petitions, shall be kept in abeyance for a period of 30 days from today, to enable the petitioner to move the appellate authority. These writ petitions are disposed of as above. Sd/- BECHU KURIAN THOMAS, JUDGE AMV/14/09//2021 W.P.(C) Nos.18820, 18833, 18915 and 18948 of 2021 **9** ## **APPENDIX OF WP(C) 18820/2021** **PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF ANNUAL RETURN-E-FILED ON 22.04.16 THROUGH KVATIS FOR THE YEAR 2014-15 BEFORE 2ND RESPONDENT Exhibit P2 TRUE COPY OF THE ASSESSMENT ORDER DATED 31.01.19 PASSED U/S 25 (1) OF THE KVAT ACT FOR THE YEAR 2014-15 BY THE 2ND RESPONDENT Exhibit P3 TRUE COPY OF THE COMMON 1ST APPELLATE ORDER DATED 08.02.21 FOR THE YEARS 2014-15, 15-16 AND 2016-17 PASSED BY 1ST RESPONDENT DIRECTING TO MODIFY THE ASSESSMENT FOR THE YEAR 2014-15 Exhibit P4 TRUE COPY OF THE RR NOTICE FOR THE YEAR 2014-15 DATED 16.07.21 ISSUED U/S 7 AND 34 OF THE RR ACT BY THE 3RD RESPONDENT TO THE PETITIONER Exhibit P5 TRUE COPY OF JUDGMENT OF THIS HON'BLE COURT DATED 02.12.15 IN WPC NO.5077/09 Exhibit P6 TRUE COPY OF THE REFERENCE ORDER PASSED IN WPC NO.5467/17, O.T.REV NOS 132, 137/19 ETC DATED 24.07.2020 BY THE DIVISION BENCH OF THIS HON'BLE COURT** RESPONDENTS EXHIBITS : NIL TRUE COPY P.A.TO JUDGE W.P.(C) Nos.18820, 18833, 18915 and 18948 of 2021 **10** ## **APPENDIX OF WP(C) 18833/2021** **PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF ANNUAL RETURN-E-FILED ON 01.05.17 THROUGH KVATIS FOR THE YEAR 2015-16 Exhibit P2 TRUE COPY OF THE ASSESSMENT ORDER DATED 26.02.19 PASSED U/S 25 (1) OF THE KVAT ACT FOR THE YEAR 2015-16 BY THE 2ND RESPONDENT Exhibit P3 TRUE COPY OF THE COMMON 1ST APPELLATE ORDER DATED 10.02.21 FOR THE YEARS 2014-15, 15-16 AND 2016-17 PASSED BY 1ST RESPONDENT DIRECTING TO MODIFY THE ASSESSMENT Exhibit P4 TRUE COPY OF THE RR NOTICE DATED 26.07.21 ISSUED U/S 7 AND 34 OF THE RR ACT BY THE 3RD RESPONDENT TO THE PETITIONER Exhibit P5 TRUE COPY OF JUDGMENT OF THIS HON'BLE COURT DATED 02.12.15 IN WPC NO.5077/09 Exhibit P6 TRUE COPY OF THE REFERENCE ORDER PASSED IN WPC NO.5467/17, O.T.REV NOS 132, 137/19 ETC DATED 24.07.2020 BY THE DIVISION BENCH OF THIS HON'BLE COURT** ## **RESPONDENTS EXHIBITS NIL** **TRUE COPY P.A.TO JUDGE** W.P.(C) Nos.18820, 18833, 18915 and 18948 of 2021 **11** ## **APPENDIX OF WP(C) 18915/2021** ## **PETITIONER EXHIBITS** |**Exhibit P1**|**TRUE COPY OF ANNUAL RETURN E FILED ON 06.06.16**| |---|---| ||**THROUGH KVATIS FOR THE YEAR 2014-15.**| |**Exhibit P2**|**TRUE COPY OF THE ASSESSMENT ORDER DATED 31.01.19**| ||**PASSED U/S 25 (1) OF THE KVAT ACT FOR THE YEAR**| ||**2014-15 BY THE 2ND RESPONDENT.**| |**Exhibit P3**|**TRUE COPY OF THE COMMON IST APPELLATE ORDER DATED**| ||**10.02.21 FOR THE YEARS 2014-15 15-16, AND 2016-17**| ||**PASSED BY IST RESPONDENT DIRECTING TO MODIFY THE**| ||**ASSESSMENT.**| |**Exhibit P4**|**TRUE COPY OF THE RR NOTICE DATED 26.07.21 ISSUED**| ||**U/S 7 AND 34 OF THE RR ACT BY THE 3RD RESPONDENT**| ||**TO THE PETITIONER.**| |**Exhibit P5**|**TRUE COPY OF THE JUDGMENT OF THIS HONBLE COURT**| ||**DATED 02.12.15 IN WPC NO.5077 /09.**| |**Exhibit P6**|**TRUE COPY OF THE REFERENCE ORDER PASSED IN WPC NO.**| ||**5467/17, O.T. REV NOS. 132, 137/19 ETC. DATED**| ||**24.07.20 BY THE DIVISION BENCH OF THIS HONBLE**| ||**COURT.**| ## **RESPONDENTS EXHIBITS** **NIL** **TRUE COPY P.A.TO JUDGE** W.P.(C) Nos.18820, 18833, 18915 and 18948 of 2021 **12** ## **APPENDIX OF WP(C) 18948/2021** |**PETITIONER EXHIBITS**|| |---|---| |**Exhibit P1**|**TRUE COPY OF ANNUAL RETURN E-FILED ON 16.5.2017**| ||**THROUGH KVATIS FOR THE YEAR 2016-17**| |**Exhibit P2**|**TRUE COPY OF THE ASSESSMENT ORDER DATED 1.3.2019**| ||**PASSED U/S 25(1) OF THE KVAT ACT FOR THE YEAR**| ||**2016-17 BY THE 2ND RESPONDENT**| |**Exhibit P3**|**TRUE COPY OF THE COMMON 1ST APPELLATE ORDER DATED**| ||**10.2.21 FOR THE YEARS 2014-15, 15-16 AND 2016-17**| ||**PASSED BY 1ST RESPONDENT DIRECTING TO MODIFY THE**| ||**ASSESSMENT**| |**Exhibit P4**|**TRUE COPY OF THE RR NOTICE DATED 26.7.21 ISSUED**| ||**U/S 7 AND 34 OF THE RR ACT BY THE 3RD RESPONDENT**| |**Exhibit P5**|**TRUE COPY OF JUDGMENT OF THIS HON'BLE COURT DATED**| ||**2.12.2015 IN WPC NO 5077/09**| |**Exhibit P6**|**TRUE COPY OF THE REFERENCE ORDER PASSED IN WPC NO**| ||**5467/17,O.T REV NOS 132, 137/19 ETC DATED 24.7.20**| ||**BY THE DIVISION BENCH OF THIS HON'BLE COURT .**| **RESPONDENTS EXHIBITS NIL** **TRUE COPY P.A.TO JUDGE** W.P.(C) Nos.18820, 18833, 18915 and 18948 of 2021 **13**