High Court of KeralaWP(C)/21702/2015disposed of

M/S. Leisure De Holidays, Alappuzha v. The Ingelligence Officer (Ib), Alappuzha

2015-12-23Honourable Dr. Justice A.K.Jayasankaran Nambiar5 pages

IN THE HIGH COURT OF KERALA AT ERNAKULAM

PRESENT:

THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR WEDNESDAY, THE 23RD DAY OF DECEMBER 2015/2ND POUSHA, 1937 WP(C).NO. 21702 OF 2015 (K) ---------------------------- PETITIONER(S):

--------------- M/S. LEISURE DE HOLIDAYS, PEEDIYEKKAL VEEDU, THATHAMPALLY WARD ALAPPUZHA- REPRESENTED BY ITS MANAGING PARTNER ANCY SOJAN BY ADVS.SRI.V.DEVANANDA NARASIMHAM SRI.P.H.RIYAS RESPONDENT(S):

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1. THE INTELLIGENCE OFFICER (INVESTIGATION BRANCH) COMMERCIAL TAXES CIVIL STATION ANNEX, ALAPPUZHA-688 011

2. THE COMMERCIAL TAX OFFICER (LT) O/O COMMERCIAL TAXES, DEPUTY COMMISSIONER ALAPPUZHA -688 001 BY GOVERNMENT PLEADER SMT.LILLY K.T THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23-12-2015, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C).NO. 21702 OF 2015 (K) ---------------------------- APPENDIX PETITIONER(S)' EXHIBITS ----------------------- EXT.P1: TRUE COPY OF CERTIFICATE OF REGISTRATION ISSUED BY REGISTERING AUTHORITY, DIRECTORATE OF PORTS, ALAPPUZHA EXT.P2: TRUE COPY OF THE CERTIFICATE OF REGISTRATION DT. 30/4/09 ISSUED BY 2ND RESPONDENT UNDER LT ACT EXT.P3: TRUE COPY OF THE PERMISSION GIVEN FOR PAYMENT OF TAX U/S 5A OF THE LT ACT DT. 30/4/09 FOR THE PERIOD FROM 1/4/09 TO 31/3/10 BY 2ND RESPONDENT TO PETITIONER EXT.P4: TRUE COPY OF SALE AGREEMENT DATED 5/2/15 IN RESPECT OF SALE OF HOUSE BOAT EXT.P5: TRUE COPY OF THE PRE-ASSESSMENT NOTICE DATED 11/6/15 ISSUED BY 1ST RESPONDENT TO PETITIONER EXT.P6: TRUE COPY THE STRONG REPLY DT. 30/6/15 SENT BY REGISTERED POST ON 1/7/15 AND ACKNOWLEDGED BY 1ST RESPONDENT ON 2/7/15 EXT.P7: TRUE COPY OF THE PENALTY ORDER PASSED ON 1/7/15 SERVED TO PETITIONER ON 8/7/15 BY 1ST RESPONDENT RESPONDENT(S)' EXHIBITS:NIL ----------------------- //TRUE COPY// P.A TO JUDGE

A.K.JAYASANKARAN NAMBIAR, J.

............................................................. W.P.(C).No.21702 of 2015 ............................................................. Dated this the 23rd day of December, 2015

J U D G M E N T

The challenge in the writ petition is against Ext.P7 penalty order whereby a penalty has been imposed on the petitioner in connection with the sale of a house boat. It is the contention of the petitioner in the writ petition that he is not a dealer for the purposes of the Kerala Value Added Tax Act (hereinafter referred to as 'the KVAT Act'), and hence, although there was a sale of a house boat, the said transaction will not attract tax under the KVAT Act since he does not satisfy the definition of a dealer under the KVAT Act. It is pointed out that, in Ext.P7 penalty order, this aspect has not been considered by the 1st respondent, and further, there has been no assessment under the KVAT Act in relation to the petitioner for the aforementioned transaction and, in cases where tax liability itself is in dispute the penalty order, if any, must necessarily follow the assessment order.

2. I have heard the learned counsel for the petitioner and the

-2W.P.(C). No.21702 of 2015 learned Government Pleader for the respondents.

3. On a consideration of the facts and circumstances of the case and the submissions made across the bar, I find from Ext.P7 order that the 1st respondent proceeds on the assumption that the petitioner is a dealer, and thereafter, finds that the transaction in question would attract tax under the KVAT Act, and double the amount of tax is imposed on the petitioner by way of penalty. This Court has on a number of occasions re-iterated that in matters where the dispute concerns the very taxability of the transaction, then the penalty orders to be passed must necessarily follow the assessment orders, since it is in the assessment proceedings that the tax liability of the assessee can be ascertained by following the procedure contemplated in Section 21 to Section 25 of the KVAT Act.

Inasmuch as in the instant case, the liability to tax of the petitioner has not been determined by the assessing authority under KVAT Act, I am of the view that, the penalty order, which proceeds on a presumption with regard to the liability of the petitioner to pay tax, cannot be legally sustained. Accordingly, I quash Ext.

-3W.P.(C). No.21702 of 2015 the completion of assessment proceedings, if any, against the petitioner.

The writ petition is disposed of as above.

A.K.JAYASANKARAN NAMBIAR JUDGE mns/23.12.15