Kerala HC confirms 5% VAT on printed photographs in book form.
While confirming the tax rate of 5% on printed photographs in book form, the Kerala High Court observed that, the assessee cannot be deprived of his right to take a contention based on a Clarification issued by the Commissioner solely on ground that the offence has been compounded by them. The Court was considering a writ petition filed by the assessee challenging levy of 14.5% of VAT on the goods such as printed photographs in book form.
The petitioner, by relying upon the Clarification issued by the Commissioner in the matter relating to M/s. Colortone Process Pvt. Ltd, maintained that the above goods has to be taxed only at the rate of 5% by virtue of entry 100(5) of the third schedule to the Act.The grievance of the petitioners was that when they raised such an argument during the time of proceedings, the officer rejected it by pointing out that when the penalty proceedings alleging 14.5% tax on the said goods were initiated against the petitioners,they compounded offence. The petitioners urged that, they were unaware about the Clarification at the time of compounding the offence.When they came to know about the Clarification issued, they filed a rectification application seeking refund of the amount paid, which is currently pending before the authorities.
While quashing the order passed against the petitioners, the Single bench of Justice A.M Shaffique held that “though the learned Government Pleader supports the stand taken by the Officer, it is apparent that when a clarification had been issued under Section 94 of the Act, the Officer is bound to comply with the same. Merely for the reason that the petitioner had submitted an application for compounding which had been allowed, does not deprive the right of the petitioner to take a contention based on a clarification issued by the Commissioner. Under such circumstances, the Assessing Officer had committed serious error of law in coming to the aforesaid finding and for that reason itself, the impugned order is liable to be set aside”
Read the full text of the Judgment below.
