The Kerala High Court has held that refund dues cannot be adjusted against demand when there was a stay on account of provision under section 60 (1A) of Kerala Value Added Tax ( KVAT ) Act, 2003. The bench directed that the demand for interest out of the liability assessed against the petitioner for the year 2015-16 shall not be demanded as pending disposal of the statutory appeal before the Tribunal for the year 2015-16.
Nivz Imports & Exports A) Ltd., the petitioner was a registered dealer under the Kerala Value Added Tax Act, 2003 (the ‘KVAT Act’). The petitioner has approached the Court being aggrieved by the fact that a refund due to the petitioner for the year 2016-17 (under the KVAT Act) as per order has been adjusted against a demand under the KVAT Act for the assessment year 2015-16 at a time when a 2nd appeal is pending before the Kerala Value Added Tax Appellate Tribunal in respect of such demand.
It was pointed out that the petitioner had already remitted 10% of the demand and going by the provisions of Section 60(1A) of the KVAT Act (as amended with effect from 01.04.2023), there is an automatic stay of recovery of the balance on deposit of 10% of the tax amount.
Expert-Led PF & ESIC Course – Enroll Now & Get Certified
Government Pleader submitted that the fact of filing of the appeal and the deposit of 10% was not made known to the Assessing Authority, as a result of which the refund due to the petitioner for the year 2016-17 was adjusted against the demand for 2015-16.
Counsel appearing for the petitioner would submitted that even after adjustment of the amount and without giving any interest on the refund amount to the petitioner, the respondents are demanding interest in respect of the amount payable for the year 2015-16. It is submitted that this is clearly illegal considering the fact that the demand stands on deposit of 10% at the time of filing the appeal before the Tribunal.
The Court viewed that the writ petition can be disposed of directing that the demand for interest shall be kept in abeyance till the matter is finally decided by the Appellate Tribunal. Though technically the refund due to the petitioner for the year 2016-17 could not have been adjusted against the demand for 2015-16 when there was a stay on account of the provisions contained in Section 60 (1A) of the KVAT Act.
The bench viewed that the issue need not be considered in this writ petition as it is the specific case of the learned Government Pleader that the refund came to be adjusted against the demand only on account of the fact that the Assessing Authority was not intimated regarding the filing of the appeal and the deposit of 10% of the tax demand.
Expert-Led PF & ESIC Course – Enroll Now & Get Certified
The single bench of Justice Gopinath P disposed of the writ petition directing that the demand for interest out of the liability assessed against the petitioner for the year 2015-16 shall not be demanded or collected from the petitioner pending disposal of the statutory appeal before the Tribunal for the year 2015-16.
Santhosh P. Abraham appeared on behalf of the petitioner and Smt. Jasmin M M appeared for the respondent.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
