M/s.United Timber Corporation vs Commercial Tax Officer Commercial Taxes and State of Kerala

Justice P.R. Ramachandra Menon

The petitioner is challenging the proceedings of the first respondent for finalsing the assessment in respect of the assessment year 2010-2011 issuing Exhibit P3 notice u/s. 25(1) of the KVAT Act. According to the petitioner, the petitioner had filed monthly as well as annual returns in respect of the period in question and had also produced Exhibit P2/P2(a) audited reports/trading profit and loss account. However, stating that there was some suppression at the hands of the petitioner, Exhibit P3 notice was issued, which was duly replied by Exhibit P4 on 16.05.2012. In the meanwhile, the petitioner got some clarification from the auditor, asserting that there was no suppression at all and that the figures in respect of the foreign exchange difference because of the change in ''dollar value'' in relation to the import of timber by the petitioner, has been separately shown in the accounts, as per the rules of accounting. There is also a case for the petitioner that such difference in the foreign exchange cannot contribute or add on to the sales turnover, so as to suffer any tax liability. The petitioner approached this Court by filing this writ petition on 04.07.2012 which came up before this Bench on 05.07.2012. The apprehension of the petitioner was that there was every chance to have the assessment finalised without considering Ext. P5 and P5(a), which hence was sought to be intercepted.

Pursuant to the instructions received, the learned Government Pleader submitted before this Court on 06.07.2012 that the assessment proceedings were finalised by the first respondent as early as on 21.05.2012 and the order was despatched to the petitioner by registered post on 05.07.2012. In the said circumstance, this Court wanted to peruses the relevant file, which was accordingly produced by the learned Government Pleader for verification. On going through the file, it is seen that, even though the order was passed by the first respondent on 21.05.2012, the same was despatched to the petitioner by registered post only on 05.07.2012. It is also seen that Exhibit P3 notice itself is dated 10.05.2012, to which the petitioner submitted Exhibit P4 reply within ''one week'' i.e., on 16.05.2012 and the proceedings are stated as finalised within ''one week'' thereafter i.e., on 21.05.2012; while copy of the same was forwarded to the petitioner only on 05.07.2012.

The basic question to be considered is whether Exhibit P5/P5(a) proceedings were considered while passing the impugned order. It is seen from the file that the said proceedings sent by the petitioner through couriers were served to the respondent only on ''06.07.2012''. This Court does not propose to adjudicate over the correctness of the facts and figures in this regard, in so far as the proceedings have already been finalised by the first respondent and it is for the petitioner to have it challenged by way of appeal before the competent authority, if aggrieved. Because of the particular nature of challenge involved, this Court finds it fit and proper to observe that, if any appeal is preferred by the petitioner against the order as aforesaid within the prescribed time, it shall be considered by the appellate authority and appropriate orders shall be passed in accordance of law, as expeditiously as possible. Since the notice of demand stated as forming part of the proceedings served to the petitioner is dated only 04.07.2012, implementation of the same shall be kept in abeyance till final orders are passed in the appeal, as aforesaid.

The file is returned to the learned Government Pleader. Writ petition is disposed of.