VAT Return can be revised to Correct Bonafide Errors even though Penalty proceeds were Initiated: Kerala HC [Read Judgment]

KVAT - VAT Return - Kerala High Court - Taxscan

The Kerala High Court in the case of The Commercial Tax Officer-I v. C.R. Varghese held that VAT Return can be revised to correct bona fide errors even though Penalty proceeds were initiated.

The Court jointly adjudicated the petitions which arose common questions of law i.e. whether revision of returns by the assessees in various contingencies was allowaeenable beyond the period of appeal. The petitioners in their own cases have filed their monthly returns as stipulated under the Kerala Value Added Tax Act, 2003. Later, due too some discrepancies in the returns, permission to revise the returns was sought. The same was denied by the department, the arguments of which is in challenge before the present Court.

The issue before the present Court is that whether a dealer can file revised return under Section 42(2) of the Act after proceedings have been initiated under Section 25.

Beginning with the judgment, Justice K. Vinod Chandran expressing dissatisfaction over the observations made by the learned single in the petition before appeal was of the view that “It is high time the Officers of the Department rose up from their mediocre mind set and became facilitators of finance and commerce aiding the economic advancement of the Nation rather than reducing themselves to mere tax collectors and target achievers. The taxing statute is not an instrument of oppression and has to be treated as one enabling trade and commerce; which at the same time fetch revenue for the State to be employed in discharging its various activities and obligations to the citizen.”

It is under Section 12(2) of the KVAT Act that the dealer on detecting any omission or mistake in the monthly return, can file a revised return rectifying the same within two months from the last day of the return period. However, the same prohibits any such revision of return if an offense has been detected or other proceedings initiated.

The Court noticed that even on revision of returns, the same would be subject to Sections 22, 24 and 25; The limitation for which commences in the instant cases from the time when the revised return is filed by the assessee. The Court directed the assessee to file a revised return within a period of one month from the date of order.

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