Vijaya Trading Company vs Commercial Tax Officer and Others

Antony Dominic, J.—Heard the counsel for the petitioner and the learned Government Pleader for the respondents. The petitioner is a dealer under the Kerala Value Added Tax Act. They commenced their business with effect from May 8, 2006 and applied for registration under the Kerala Value Added Tax Act on December 28, 2006. They were also granted registration with effect from that date. By exhibit P4, assessment for the year 2006-07 was completed granting input-tax credit only for the period subsequent to December 28, 2006. On that basis, demand notice was also issued for recovering the balance amount due from the petitioner.

It was thereupon the petitioner has filed this writ petition contending that they should also be given the benefit of section 15B of the Kerala Value Added Tax Act. On that basis the petitioner seeks to quash exhibit P4 order and is seeking a declaration that they are entitled to get input-tax credit for the period prior to December 28, 2006. They are also seeking a declaration that section 15B of the Act to the extent the benefit is confined to only to dealers who have voluntarily applied for registration during the period from December 15, 2007 to March 31, 2008 is discriminatory.

As can be seen from the facts noticed above, the petitioner applied and obtained registration with effect from December 28, 2006. Going by the provisions of section 15 of the Act, the petitioner had the obligation to get registration under the Act and u/s 6 also he had the liability to pay tax due under the Act. In so far as section 15B of the Act is concerned, it reads thus:

15B Special drive for registration.--Notwithstanding anything contained anywhere in this Act, dealers who had voluntarily applied for registration under the Act for the period from December 15, 2007 to March 31, 2008 would be entitled to,--

(a) get registration with effect from the date of commencement of business irrespective of the date of application;

(b) claim input tax credit on their purchases covered under bills/invoices of registered dealers within the State from the date of commencement of business; and

(c) pay tax under sub-section (5) of section 6, subject to eligibility, or pay tax u/s 8 for the relevant years subject to eligibility and filing application for compounding along with the registration application;

Provided that such dealers shall be liable to pay interest on all dues and will not be entitled for any refund relating to the period prior to filing of registration application.

A reading of the section shows that notwithstanding the aforesaid provisions of the Act, dealers who had voluntarily applied for registration under the Act for the period from December 15, 2007 to March 31, 2008 would be entitled to claim input tax credit on their purchases covered under bills/invoices of registered dealers within the State, from the date of commencement of their business. It is evident that this section applies only to dealers who were not registered under the Act and had voluntarily applied for registration during the period specified in the section.

To plead discrimination, a dealer should be similarly situated to those dealers who are eligible for the benefit of the section. Since the section applies only to unregistered dealers, only unregistered dealers can claim to be similarly situated to the beneficiaries of the section. In so far as the petitioner is concerned, they got themselves registration with effect from December 28, 2006. Therefore, when section 15B was introduced by the Kerala Finance Act, 2008 with effect from April 1, 2008, the petitioner was registered dealer and hence is not one similarly situated to dealers who are eligible for the benefit of the section. Consequently, the petitioner cannot plead that they are similarly situated dealers and cannot complaint of discrimination or violation of article 14 of the Constitution. If that be so, the case of discrimination canvassed by the petitioner has to be rejected.

Even otherwise when beneficial provisions are introduced in a statute, Legislature is entitled to specify cut-off dates limiting its operation. Such dates will have various implication including financial. Therefore, unless it is shown by the person who impugn the provision that the cut-off date indicated in the provision is arbitrary, a court will not be sought to interfere with such a fixation of the cut-off dates. In this case, apart from the pleading in the writ petition there is absolutely no reliable material substantiating the plea that the date fixed is arbitrary.

That apart, I am also inclined to think that the Legislature never intended that the section should result in a situation that on the introduction of the provision, issues which are settled and closed under the Kerala Value Added Tax Act, should be re-opened. For all these reasons, I do not find any merit in the writ petition and the writ petition is dismissed.