In a recent case, the Kerala High Court has held that assessing authority cannot pass a fresh order for the same assessment year under section 25(1) of Kerala Value Added Tax (KVAT) Act, 2003.Since the second order of assessment is non-est in law, the court permitted to file an appeal against the order if he is so aggrieved.
Sreekumar B.S., the petitioner was a registered dealer under the KVAT Act and Central Sales Tax Act, 1956 ( CST Act). An assessment of the petitioner for the year 2015-16 was completed under Section 25(1) of the KVAT Act by order dated 15.12.2018. In terms of the order, there was a demand for an amount of Rs.74,45,653.00/-(inclusive of interest of Rs.18,47,418/-). After that another order, which is on 29.03.2021 was issued for the same year (2015-16) under Section 25(1) of the KVAT Act where the demand on the petitioner was only a sum of Rs.40,912.00/-.
According to the petitioner, the petitioner opted to settle the demand on the basis of the order by making an application under the Amnesty Scheme of 2021 as also under the Amnesty Scheme of 2022. Since the applications filed by the petitioner for getting the benefit of the Amnesty Scheme of 2021 and 2022 were not considered, the petitioner preferred the application for rectification under Section 66 of the KVAT Act praying that the assessment order issued on 15.12.2018 be recalled/set aside so as to enable the petitioner to settle the liability under the Amnesty Scheme on the basis of the demand created in terms of the order.
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It was stated that application of the petitioner has been rejected by the order dated 29.8.2022 wherein it is stated that the assessment of the petitioner for the year 2015-2016 was originally completed by the assessment order on the basis of certain observations by the internal audit team. It was submitted that the original assessment file got misplaced and without noticing the fact that the assessment had already been completed, a fresh assessment order came to be issued under Section 25(1) of the KVAT Act.
It was also stated that the petitioner also did not bring to the notice of the officer who issued the order that the assessment had already been completed by passing the order. It was held that the prayer for rectification is not maintainable as the rectification is only possible in case of error apparent on the face of the record. In other words it was found that an application for rectification could not be filed for recalling/withdrawing the earlier assessment order dated 15.12.2018.
Sri. Devananda Narasimham, the counsel appearing for the petitioner vehemently contended that the earlier assessment of the petitioner was completed in a hasty manner and without verifying the records. It was submitted that it is in such circumstances that a fresh assessment was completed under the provisions of Section 25(1) of the KVAT Act and on verification of the documents and records produced by the petitioner, the assessment of the petitioner was completed resulting in a demand for Rs.40,912/- (including interest).
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It was open to the petitioner to apply for an amnesty in terms of the provisions contained in the Amnesty Schemes of 2021 and 2022. It was submitted that the petitioner was also entitled to maintain an application under Section 66 of the KVAT Act for recalling or setting aside the assessment order in the peculiar facts and circumstances of this case.
The counsel for the petitioner referred to the provisions of Section 25(1) of the KVAT Act to show that there is nothing in the provision which would indicate that a subsequent order could not be passed by the Assessing Authority.
The Senior Government Pleader appearing for the respondent submitted on instructions that, it is clear from the order itself that the second order for the year 2015-2016 came to be issued only on account of a mistake and without noticing the fact that the assessment for that year had already been completed by the order.
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It was pointed out that it can be seen from the order that the petitioner also failed to bring to the notice of the officer that an earlier assessment had been completed for the year 2015-2016. It is submitted that the petitioner also did not file any appeal against the order. It was submitted that the wording of the provisions of Section 66 of the KVAT Act would clearly show that the prayer of the petitioner for recalling the order is not maintainable.
A single bench of Justice Gopinath P viewed that the petitioner is not entitled to any relief in the present writ petition. It is not disputed before that the order, which is issued under Section 25(1) of the KVAT Act on 15.12.2018, has not been set aside or modified in any proceedings. If that be the case, the provisions of Section 25(1) of the KVAT Act does not permit the Assessing Authority to pass a fresh order for the same assessment year.
It was evident that though the petitioner did not file any appeal against the order, for reasons already noticed, a second order came to be issued on 29.3.2021 where the demand raised on the petitioner was only a sum of Rs.40,912/- together with interest, in the place of a demand of Rs.74,45,653.00/- along with the interest, in terms of the order.
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According to the petitioner, he preferred an application for settling the liability of Rs.40,912/- under the Amnesty Scheme of 2021 as also under the Amnesty Scheme of 2022. When such applications were not processed, he filed the application for rectification. It was stated that application for rectification was rejected on 29.08.2022 and the petitioner was before this Court on 09.9.2022, that is, immediately after the order was passed.
Since the second order of assessment is non-est in law, the court permitted to file an appeal against the order if he is so aggrieved, provided such appeal is filed within a period of two weeks from the date of receipt of a certified copy.
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