Point of Law: Permission was not granted to the petitioner to file revised return, since, according to the assessing authority, there was a clear detection of pattern of suppression and proceedings under Section 25(1) of the KVAT Act was finalized.

JUDGMENT :

SHOBA ANNAMMA EAPEN, J.

1. The petitioner has approached this Court with the following main prayer:

“(i) Issue a writ in the nature of a writ of certiorari or such other writ or order or direction quashing Ext.P5 Order issued by the first respondent.”

2. The brief facts are as follows:

The petitioner is a private limited company engaged in the manufacture and sale of furniture and is an assessee on the rolls of the first respondent. On 24.2.2015, the Intelligence Wing of the Commercial Taxes Department inspected the petitioner’s premises, recorded the stock found at the time of inspection and on finding discrepancies, proceedings were initiated against the petitioner for imposition of penalty under Section 67 of the Kerala Value Added Tax Act, 2003 (for short ‘KVAT Act’) for non-maintenance of true and correct books of accounts for the year 2014-15. The petitioner immediately applied for compounding under Section 74 of the KVAT Act and after computation of the actual suppression detected, the second respondent- State Tax Officer (Intelligence), SGST Department, Squad No. IV, Malappuram passed Ext.P2 order fixing the maximum compounding fee of Rs. 8,00,000/- as stipulated in the KVAT Act. On payment of the compounding fee,the petitioner filed Ext.P3 request for an opportunity for revising the return for the year 2014-15 as provided under Section 22(10) of the KVAT Act. Without considering Ext.P3 request, the first respondent issued Ext.P4 notice under Section 25(1) of the KVAT Act proposing to assess the petitioner on the alleged escaped turnover quantified through Ext.P2 order and culminated in Ext.P5 order demanding a sum of Rs. 89,90,442/-. Aggrieved by Ext.P5 order as well as the inaction on the part of the respondents in not considering Ext.P3 request for revision of return, the petitioner has approached this Court with the above writ petition.

3. The first respondent has filed counter affidavit contending that the petitioner admitted the offence and remitted the compounding fee of Rs. 8,00,000/- before the Intelligence Wing. It is further contended that the petitioner was directed to revise the self-assessment return incorporating the admitted sales turnover suppression and to remit the tax thereon. But, on further verification of the books of accounts of the petitioner, it was found that since there were various turnover suppression practices like parallel billing, physical stock variation, unaccounted purchases and unaccounted sales, constituting a pattern of suppression, though the suppressions were all detected in a single shop inspection, the first respondent did not permit the revision of return as requested by the petitioner. It was further contended that if a return revision permission is sanctioned from the IT Cell of the Department or not, the assessing authority would have to reject the self-assessment return in the light of the above stated pattern of suppression so as to make a best judgment assessment under Section 25(1) as stipulated in the proviso to Section 22(10) of the KVAT Act. It is also contended that the return revision is only an option given to the petitioner and the purpose behind the option is to incorporate the admitted turnover suppression as part of the self assessment return and to remit tax thereon. The revision of return has relevance only if the above revision results into a deemed completion of the assessment. But, in the present case, the assessing authority found that there was a pattern of suppression followed by the petitioner throughout the year. It is also contended that proviso to Section 22(10) of the KVAT Act ends with the conditional clause that ‘subject to the provisions of Sections 24 and 25 be deemed to have been completed’ and the proviso to Section 22(10) of the KVAT Act states that where a pattern of suppression is detected, the assessing authority shall proceed with best judgment assessment in accordance with the provisions of Sections 24 and 25 as the case may be.