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2025 DIGILAW 298 (KER)

RENUKA JEWELLERY THALASSERY v. STATE OF KERALA

2025-02-18

A.K.JAYASANKARAN NAMBIAR, EASWARAN S.

body2025
JUDGMENT : A.K. Jayasankaran Nambiar, J. 1. As both these O.T.Revisions impugn a common order of the Kerala Value Added Tax Appellate Tribunal, in Review Petition No.1 of 2021 in T.A. (VAT) No.1429 of 2018 and Review Petition No.6 of 2021 in T.A.(VAT) No.631 of 2019, they are taken up for consideration together and disposed by this common judgment. 2. The revision petitioner herein is engaged in jewellery business. For the assessment year 2016-2017, the revision petitioner had applied for payment of tax on compounded basis and the application filed in that regard was accepted by the department. Accordingly, the revision petitioner paid tax on compounded basis for the said assessment year during different months. It would appear that proceedings were initiated against the revision petitioner for the assessment year 2014-2015 and 2015-2016 for revising the assessments already done during the said years. The said proceedings resulted in an enhancement of the tax payable on compounded basis for the assessment year 2014-2015, and a modification of the tax payable on compounded basis for the assessment year 2015-2016. As a consequence of the enhancement made in the tax payable on compounded basis for those years, notices were issued to the revision petitioner for revising the tax payable on compounded basis for the different months in 2016-2017. One of the notices was for the period from April to June 2016 and the second notice was issued to cover the period from July 2016 to March 2017. The assessments were thereafter completed by modifying the tax payable on compounded basis for the assessment year 2016-2017 based on the enhancement made for the previous years. 3. Aggrieved by the orders passed by the assessing authority enhancing the tax payable on compounded basis for the assessment year 2016-2017, the revision petitioner preferred appeals before the first appellate authority. The same, however, came to be dismissed by the first appellate authority. In further appeals preferred by the revision petitioner before the appellate tribunal, the appellate tribunal initially allowed the appeals based on the orders passed by the tribunal in earlier V.A.T. appeals pertaining to the revision petitioner for the assessment years 2014-2015 and 2015-2016 respectively. The appellate tribunal found that there was no justification for causing any revision in the tax payable on compounded basis by the assessee for the assessment year 2016-2017. 4. The appellate tribunal found that there was no justification for causing any revision in the tax payable on compounded basis by the assessee for the assessment year 2016-2017. 4. The revenue, thereafter, preferred review petitions before the appellate tribunal seeking a review of the orders passed by the appellate tribunal in the appeals preferred by the revision petitioner for the assessment year 2016-2017. In the review petition the State contended that through two other orders passed by the appellate tribunal in relation to the petitioner for the assessment years 2014-2015 and 2015-2016, the appellate tribunal had confirmed the enhancement of tax payable on compounded basis by the revision petitioner for the assessment year 2014-2015 and had modified the tax payable on compounded basis of the assessment done on compounded basis for the assessment year 2015- 2016. Finding that the effect of the modification that was directed in relation to the tax payable on compounded basis for the assessment year 2015-2016, to the assessment for the year 2016-17, was in an amount identical to what had already been taken by the assessing authority earlier for the purposes of arriving at the tax payable on compounded basis for the assessment year 2016-2017, the tribunal proceeded to dismiss the appeals preferred by the revision petitioner herein for those years. 5. It is aggrieved by the orders passed by the appellate tribunal in the review petitions preferred by the State that the revision petitioner is before us through these O.T. Revisions raising the following substantial questions of law. “ O.T. Rev (VAT) No.65 of 2023 I. Whether the order of the Sales Tax Appellate Tribunal allowing the Review Petition, is correct on law, facts and circumstances of the case? II. Was the tribunal not in error in dismissing the appeal TA (VAT) 631/2019 and upholding the impugned order of the assessing authority refixing the compounding tax for the year 2016-17 while allowing the review petition? III. Was the tribunal not in error of law in not holding that the Review application is not in consonance with the stipulations in Section 60(7) of the KVAT Act? IV. Should the tribunal ought not to have held that the review petition is an abuse of the process of the court? III. Was the tribunal not in error of law in not holding that the Review application is not in consonance with the stipulations in Section 60(7) of the KVAT Act? IV. Should the tribunal ought not to have held that the review petition is an abuse of the process of the court? V. Is not the findings of the Tribunal arbitrary, erroneous and perverse?” O.T. Rev (VAT) No.70 of 2023 I. Whether the order of the Sales Tax Appellate Tribunal allowing the Review Petition, is correct on law, facts and circumstances of the case? II. Was the tribunal not in error in dismissing the appeal TA (VAT) 1329/18 and upholding the impugned order of the assessing authority refixing the compounding tax for the year 2016-17 while allowing the review petition? III. Was the tribunal not in error of law in not holding that the Review application is not in consonance with the stipulations in Section 60(7) of the KVAT Act? IV. Should the tribunal ought not to have held that the review petition is an abuse of the process of the court? V. Is not the findings of the Tribunal arbitrary, erroneous and perverse?” 6. We have heard Sri. Rajesh Nambiar, the learned counsel appearing for the revision petitioner and Sri. V.K. Shamsudheen, the learned Senior Government Pleader appearing for the respondent/State. 7. On a consideration of the rival submissions, we find that the tribunal, in the orders impugned before us, has clearly set out the reasons why it had deemed it necessary to modify its earlier order in favour of the revision petitioner in the appeals preferred by it. In particular, the finding of the tribunal at Paragraph No.7 of the impugned order is as follows: “ R.P. No.6/2021 7. I have considered the submissions made by either side. It is to be mentioned that only on the basis of the copies of the orders in VATA 135/2017, dated 17.03.2018 and 1456/2017, dated 24.05.2019 this Tribunal has earlier allowed the appeal and set aside the orders of the assessing authority. Now, the State/Revenue has produced the copies of the orders in VATA 2117/2016 and VATA 1283/2017, dated 18.06.2019 and 26.08.2019, which show that the re-fixing of the compounding tax for the year 2014-15 has been confirmed and for the year 2015-16 has been modified. Now, the State/Revenue has produced the copies of the orders in VATA 2117/2016 and VATA 1283/2017, dated 18.06.2019 and 26.08.2019, which show that the re-fixing of the compounding tax for the year 2014-15 has been confirmed and for the year 2015-16 has been modified. Later, the assessing authority has re-fixed the compounding tax payable for the year 2015-16 at Rs. 3,08,500/- as per order dated 24.01.2020. It is relevant to mention that the order in VATA 135/2017 and 1456/2017 relate to demand of purchase tax and not in respect of re-fixation of the compounding tax payable by the assessee for the year 2014-15 & 2015-16. In view of the orders in VATA 2117/2016 and 1283/2017 and the modified orders passed by the assessing authority dated 24.01.2020, it can be seen that the 1 st appellate authority has not set aside the re-fixation of the compounding tax payable by the assessee for the years 2014-15 and 2015-16. So it appears that the orders passed by the this Tribunal on 26.02.2021 is on the wrong notion that VATA 135/2017 and 1456/2017 relate to re fixation of the compounding tax payable by the appellant for the year 2014-15 and 2015-16. Now, the State/Revenue has established that the re-fixation of the compounding tax for the said years has not been interfered with. Though in 1 st appeal for the year 2015-16 the order has been modified, subsequently the assessing authority has re-fixed the compounding tax payable to Rs 3,08,500/- as per order dated 24.01.2020. So the compounding tax payable by the assessee for the year 2016-17 would come to Rs. 3,54,775/-, being 115% of the compounding tax payable by the assessee for the year 2015-16. So the demand of Rs. 31,185/- for the months of April to June 2016 is only to be sustained. Moreover, similar issue was considered by this Tribunal, while disposing RP 1/2021 in TA(VAT) 1429/2018. In view of the above discussion, I am of the considered view that the orders passed by this Tribunal on 26.02.2021 is liable to be reviewed. Hence I am inclined to allow this application.” “ R.P. No.1/2021 7. We have considered the submissions made by either side. In view of the above discussion, I am of the considered view that the orders passed by this Tribunal on 26.02.2021 is liable to be reviewed. Hence I am inclined to allow this application.” “ R.P. No.1/2021 7. We have considered the submissions made by either side. It is to be mentioned that only on the basis of the copies of the orders in VATA 135/2017, dated 17.03.2018 and 1456/2017, dated 24.05.2019 this Tribunal has earlier allowed the appeal and set aside the orders of the assessing authority. Now, the State/Revenue has produced the copies of the orders in VATA 2117/2016 and VATA 1283/2017, dated 18.06.2019 and 26.08.2019, which show that the re-fixing of the compounding tax for the year 2014-15 has been confirmed and for the year 2015-16 has been modified. Later, the assessing authority has re-fixed the compounding tax payable for the year 2015-16 at Rs. 3,08,500/- as per order dated 24.01.2020. It is relevant to mention that the order in VATA 135/2017 and 1456/2017 relate to demand of purchase tax and not in respect of re-fixation of the compounding tax payable by the assessee for the year 2014-15 & 2015-16. In view of the orders in VATA 2117/2016 and 1283/2017 and the modified orders passed by the assessing authority dated 24.01.2020, it can be seen that the 1 st appellate authority has not set aside the re-fixation of the compounding tax payable by the assessee for the years 2014-15 and 2015-16. So it appears that the orders passed by the this Tribunal on 06.09.2019 is on the wrong notion that VATA 135/2017 and 1456/2017 relate to re fixation of the compounding tax payable by the appellant for the year 2014-15 and 2015-16. Now, the State/Revenue has established that the re-fixation of the compounding tax for the said years has not been interfered with. Though in 1 st appeal for the year 2015-16 the order has been modified, but subsequently the assessing authority has re-fixed the compounding tax payable to Rs. 3,08,500/- as per order dated 24.01.2020. So the compounding tax payable by the assessee for the year 2016-17 would come to Rs. 3,54,775/-, being 115% of the compounding tax payable by the assessee for the year 2015-16. In view of the above discussion, we are of the considered view that the orders passed by this Tribunal on 06.09.20191 is liable to be reviewed. So the compounding tax payable by the assessee for the year 2016-17 would come to Rs. 3,54,775/-, being 115% of the compounding tax payable by the assessee for the year 2015-16. In view of the above discussion, we are of the considered view that the orders passed by this Tribunal on 06.09.20191 is liable to be reviewed. Hence we are inclined to allow this application.” 8. What is relevant to note is that the tribunal finds that though in first appeal for the year 2015-2016 the order passed against the revision petitioner directing the payment of tax on compounded basis had been modified, the assessing authority had subsequently re-fixed the compounding tax payable at Rs.3,08,500/- as per order dated 24.1.2020. Taking note of the said figure as the tax payable on compounded basis for the assessment year 2015-2016, the compounding tax payable by the assessee for the year 2016-2017 was computed at Rs.3,54,775/- which was 115% of the compounding tax payable by the assessee for the year 2015-2016. 9. The learned counsel for the revision petitioner/assessee would then contend that the order dated 24.1.2020, that was referred to by the tribunal in the orders impugned before us, was never actually passed by the department and, much less, produced before the tribunal. It is his further contention that, even assuming that there was an order as recorded by the appellate tribunal, then the appellate tribunal should have found that there was no consequential order passed based on that modified order which alone could have been used against the assessee for the purposes of determining the tax liability for the assessment year 2016-2017. We find the said contentions of the learned counsel for the revision petitioner to be unacceptable since the appellate tribunal has recorded a factual finding with regard to the contents of the order by mentioning therein the date of the order and the amount of tax found as payable by the assessee. It is also significant that despite the said factual finding by the appellate tribunal, the revision petitioner/assessee has not taken any steps to challenge the said finding either by preferring a review petition to correct an alleged factual mistake or mentioning the same in the proceedings before us. To raise such a contention at this belated point of time, is in our humble view, an exercise in futility. 10. To raise such a contention at this belated point of time, is in our humble view, an exercise in futility. 10. In the result, we find that no substantial questions of law arise for consideration in these O.T. Revisions since the tribunal has only recorded the facts that were borne out from the records produced before it, and the finding that the orders impugned before it by the revision petitioner herein did not require any modification was one arrived at based on those facts. These OT Revisions fail and are accordingly dismissed.