KK. ABRAHAM & COMPANY, BHARATH PETROLEUM DEALERS Versus SALES TAX OFFICER, KGST, IST CIRCLE, ERNAKULAM & OTHERS
VAT and Sales Tax
2013 (5) TMI 134 – KERALA HIGH COURT – TMI, [2013] 64 VST 122 (Ker)
KERALA HIGH COURT – HC
Dated:- 29-3-2012
W.P.(C) No. 20770 of 2006
CST, VAT & Sales Tax
P.R. RAMACHANDRA MENON, J.
PETITIONER: BY ADVS. SRI.VIJAYAN. K.U. SRI. K.N. SREEKUMARA
RESPONDENT: BY GOVT. PLEADER SRI. SHAIJ RAJ
JUDGMENT
Whether the petitioner partnership firm is entitled to have the benefit of input tax credit on the opening stock of the goods as on 1-4-2005, in respect of the petroleum products other than petrol and diesel, despite the fact that, the petitioner firm came into existence only much after the relevant period, is the issue to be considered and dealt with in this case.
2. The petitioner firm is a dealer and distributor of the petroleum products marketed by M/s. Bharath Petroleum Company Limited. Earlier, the outlet was being operated as a
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hat the petitioner, being not a registered dealer at the relevant time, it could not be acceded to. The petitioner submitted Ext.P7 representation/reply dated 2-6-2006 before the Commercial Tax Officer, who issued Ext.P6 series notices. The petitioner, in the meanwhile, had submitted an application for registration under Section 13 of the KGST Act, before the first respondent on 31-5-2006, along with Ext.P8 covering letter for granting registration under the KGST Act from 24-11-2004 to 31-3-2005, so as to make the petitioner eligible to claim the benefit of input tax credit, thus seeking for regularisation of the benefit as a registered dealer . The first respondent replied the same vide Ext.P9 dated 2-6- 2006, pointing out that the petitioner was never a registered dealer as on the relevant date, and so as to make anybody eligible for the benefit, one has to be a 'registered dealer' as contemplated under the relevant provisions of law. The petitioner was also alerted of the fa
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r to amend the writ petition by filing I.A No 1698 of 2008, which was allowed and matter is now taken up for final hearing. A counter affidavit has been filed on behalf of the respondents 1 and 2, rebutting the averments in the writ petition, particularly as to the eligibility of the petitioner and the statutory prescription in this regard. It is stated that the proceedings pursued and finalised by the concerned respondents are perfectly within the fours walls of law and not liable to be intercepted on any count.
5. The learned Counsel for the petitioner however submits that the idea and understanding of the respondents is not correct, and that the petitioner is entitled to have the benefit as a matter of right; more so, since the law does not specifically mention that 'registration' is mandatory to have the benefit of input tax credit. Reference is made to Section 11(12) and 11(13) of the KVAT Act which are extracted below.
“Sec 11(12) of the Act:-
12) A registered dealer w
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axable goods or used in the execution of works contract or used as containers or packing materials for the packing of taxable goods in the state for sale thereafter; or
ii) used in the manufacture of taxable goods or as packing materials for the packing of taxable goods and such manufactured or packed goods are held as opening stock on such date; or
iii) used in the manufacture of taxable goods and are held as opening stock on such date as work in process.”
6. A mere reading of the above provisions clearly reveals that the benefit contemplated therein is intended to the registered dealers and not to anybody else. Admittedly, the petitioner was never a registered dealer on the relevant date ie, on 31-3-2005. True, out of the commodities dealt with by the petitioner, the issue is confined only with regard to the 'lubricating oil', as petrol and diesel are outside the purview of the KVAT Act. It is also stated that the petitioner has filed necessary returns under both th
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all any benefit is to be obtained, the parameters specified under the provisions have to be complied with. Since, the provision clearly says that the benefit is available only to the 'registered dealers' as on the relevant date and since the petitioner admittedly does not have any case that the petitioner firm was a registered dealer as on 31-3-2005, there cannot be any doubt in this regard and stands outside the ring. The only question is regarding the applicability, if any, of the judicial precedents cited above.
8. Coming to the decision in (36) VST 126 (cited supra), the concerned dealer who started the business with effect from 1-4-2007 submitted application for registration only on 19-5-2008. A compounding fee of Rs. 31,278/- was collected by the department for carrying out the business without registration and the offence was compounded accordingly. After compounding the offence, an application for correction of the application for registration was filed, to substitute
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igibility:
Provided further that new dealers applying for registration and existing dealers having registration may avail this benefit subject to the condition that they shall pay tax under the respective provisions along with interest and will not be entitled for any refunds relating to the period prior to filing of application for registration:
Provided also that in the case of dealers against whom an offence has been detected under section 67 of the Act before filing application for registration, registration shall be granted under this sub-section subject to the finalisation of the proceedings in respect of the offence so detected.”
The above amendment actually came into effect only from 1-4-2009, whereas the dealer was granted registration on 24-9-2008 with effect from 1-4-2008. It was the said certificate which was sought to be corrected, for getting the registration with effect from 1-4-2007. This was vehemently opposed by the appellant/department, which in turn was virtually
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ut being a registered dealer as on 31-3-2005.
10. Coming to (44) VST 100, it was a case where the petitioner started business in supplying the materials to industrial units in the 'special economic zone', in the year 2006, though registration under the KVAT Act was obtained only in the year 2009. The purchaser in the 'special economic zone' gave Form No.43 prescribed under Rule 12C of the KVAT Rules, 2005, to enable the petitioner to claim exemption on the supplies made to it. However exemption was declined by the department for the year 2006-07, on the ground that the petitioner was not a registered dealer under the KVAT Act when the supplies were made. After discussing the facts and figures and relevant provisions of law, it was observed by the Bench that the reliance placed by the department was more with reference to the 'form' concerned and that there was nothing to indicate in Section 6(7) or Rule 12 C of the Rules, that in order to grant exemption, the s
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