Disallowance of Input Tax Credit is not an ‘Error’ to be rectified u/s 66 of KVAT Act: Kerala HC [Read Judgment]

Imposition - Kerala High Court - taxscan

In a recent ruling, the single bench of the Kerala High Court held that disallowance of the input tax credit by the assessing officer cannot be a ground for invoking s. 66 of the KVAT Act since it is not an “error apparent on the face of the record.”

Coming to the facts of the case, the petitioners impugned the order of the Assessing Officer rejecting the rectification application. According to the Officer, dismissal of the Input tax credit cannot be deemed as an “error apparent on the face of the record” and therefore, s. 66 cannot be invoked. Earlier, the Officer had rejected the IPT claim of the petitioner on ground that the assessee failed to prove his claim by producing purchase bills.

Dismissing the petition, Justice A.M Shaffique observed that “Perusal of the assessment orders would show that notice had been issued to the petitioner. He did not file any objection nor did appear for any hearing, which prompted the officer to proceed to pass assessment orders. Once the assessment orders are passed ex parte, unless the Officer is satisfied that there is any error apparent on the face of the record, the Officer cannot invoke the provisions under Section 66 of the Kerala Value Added Tax Act, 2003. In the case on hand, there is no material to indicate that there was an error apparent on the face of the record warranting interference under Section 66 of the Act.”

“When an assessment order is passed after giving sufficient notice to the petitioner and the petitioner, having not raised any objection at the relevant time, I do not think that this Court will be justified in permitting the petitioner to have a re-look in to the matter. It shall always be open for the petitioner to take up the matter before the appellate authority and to produce sufficient documents to enable the petitioner to defend the proceedings.”

Read the full text of the Judgment below.