Kochi Refineries Ltd vs State Of Kerala

Bechu Kurian Thomas, J

This revision arises under the Kerala General Sales Tax Act, 1963 (for short, 'the KGST Act') for the assessment year 2004-05. Petitioner

challenges the order dated 30.11.2015 in T.A.No.16/2012 on the files of the Kerala Sales Tax Appellate Tribunal, Ernakulam. Four questions of law

are raised for consideration and they are as follows :-

A. Whether the lower authorities were right in sustaining the levy of tax on the miscellaneous income treating it as taxable turnover?

B. Whether the lower authorities were right in sustaining the levy of tax on the second sale of vehicle which has suffered tax at the first point of sale?

C. Whether the lower authorities were right in sustaining the levy of tax on the transfer of furniture by the petitioner to their employees?

D. Whether the lower authorities were justified in denying more time to the petitioner for producing the balance Form 18 declarations and SRO

Forms?

For the assessment year 2004-05, the assessment was completed on 28.02.2011. Challenging the said assessment, an appeal was preferred in

which the assessment order was modified and remanded the same to the assessing authority. To the extent the appellate order decided against the

assessee, an appeal was preferred by the revision petitioner before the Sales Tax Appellate Tribunal as TA.No.16/2012. By the impugned order dated

30.11.2015, the Tribunal allowed the appeal in part. In respect of the four issues, the Appellate Tribunal decided against the assessee. This revision is

preferred due to the aforesaid adverse order.

We have heard Adv.Jaikrishna R.for the assessee as well as the Senior Govt.Pleader Adv.Mohammed Rafiq.

The first question of law raised relates to levy of tax on miscellaneous income of Rs.2,69,370/-. It is seen that the total miscellaneous income for the

year 2004-05 of the assessee was Rs.2,37,18,140/- and based on the details produced, the claim to the extent of Rs.2,34,48,770/- was allowed. As far

as the balance amount of Rs.2,69,370/- was concerned, no details were produced nor explanation offered to show that such income was not obtained

incidentally or ancillary to the main transaction of business. The said finding of fact recorded by the First Appellate Authority as well as the Appellate

Tribunal cannot be found fault with especially in the absence of any details produced by the assessee. The finding in that regard cannot be found to be

improper.

The next issue that is raised for consideration was regarding the 2nd sale of vehicles. Even in this issue also, the assessee had failed to produce any

evidence to substantiate the claim that the vehicles were purchased after paying tax. The finding of fact entered into by all the three authorities

including the final fact finding authority cannot be interfered with in this revisional jurisdiction in the absence of any material. In such circumstances,

the finding on the levy of tax on the alleged claim of 2nd sale of vehicles is not required to be interfered with.

The next question to be considered is the transfer of furniture to the employees of the assessee. In the decision in S.T.Rev.No.86/2012 dated

13.07.2018, this Court had held in respect of the same assessee for the assessment year 2001-02 that as per the contract entered into between the

assessee and its employees, hire charges for the furniture that are used by the employees are to be paid to the assessee for a period of seven years

and on the expiry of such period, an option is given to the assessee to exercise his right to purchase the said furniture. The present situation being

identical, the finding of this Court in the judgment referred to above that “the assessee had been supplying furniture to its employees and also had

been taking hire charges for the same which definitely comes within the ambit of a transfer of right to use and we do not find any reason to interfere

with the order of the AO as approved by the Tribunal. The tax levied on such transfer of right to use cannot be faulted.â€​

We are in complete agreement with the aforesaid finding and hence the tax levied on the transfer of furniture by the assessee to its employees is

justified.

The remaining question that arises for consideration is whether the denial of further time for producing the balance Form 18 declarations and SRO

Forms. It is understood from the orders of the statutory authorities in the instant case that the balance declarations of SRO Forms in support of the

concessional rate of tax was not produced by the assessee in spite of ample opportunities provided to them. Whatever declarations produced were

given benefit to. No justifiable reasons were stated for the non-production of the original of the certificates having been provided. Even before the

Appellate Tribunal, the alleged balance declarations had not been produced.

In such circumstances, we answer the questions raised against the assessee in favour of the revenue and hold that the impugned order of the

Appellate Tribunal was justified in the facts and circumstances of the case.

In view of the above, the S.T.Revision is dismissed.