IMPORTANT POINT
The court clarified the interpretation of the provisions of Section 8(f) and Section 30(1) and (2) of the Kerala Value Added Tax Act, emphasizing that tax collection must adhere to the prescribed rates and that different provisions apply to registered dealers paying tax under Section 8(f).

ORDER :

A.K. Jayasankaran Nambiar, J.

As all these O.T. Revisions deal with a common issue, they are taken up together for consideration and disposed by this common order.

2. The State of Kerala, who is the petitioner in all these O.T. Revisions, has raised the following substantial questions of law:

(a) Whether on the facts and the circumstances of the case the Appellate Tribunal has erred in law in holding that even though the respondent has collected tax at the rate in excess of the rate permitted, the said collection cannot said to be excess collection, since the tax liability of the respondent is higher than the tax so collected?

(b) Whether in the facts and circumstances of the case the Appellate Tribunal ought to have held that in the case of collection of tax in excess of rate permitted the respondent has to pay the said excess collected tax with interest to the Government, even if the tax liability of the respondent is higher than the tax so collected?

3. The respondents/assessees in these Revisions had opted to pay tax at the compounded rate provided under Section 8(f) of the Kerala Value Added Tax Act [hereinafter referred to as the “KVAT Act”]. The assessment years for which they had preferred the option were 2011-12 to 2014-15 in the case of the respondents in O.T. Revision Nos.124, 140, 147 and 156 of 2020 and assessment year 2014-15 in the case of the respondent/assessee in O.T. Revision No.83 of 2018. It would appear that while the respondents/assessees paid tax in accordance with the formula prescribed under Section 8(f), they collected tax at rates in excess of what was prescribed under the proviso/table under Section 8(f). The details of the tax collected by the respondents/assessees in O.T. Revision Nos.124, 140, 147 and 156 of 2020 are given in the table below:

4. Similarly, the details of the tax collected by the respondent/assessee in O.T. Revision No.83 of 2018 is as follows:

It will be apparent from the above tables that the respondents/assessees had collected tax at rates higher than what was prescribed under Section 8(f). The Department therefore initiated action against them for recovery of the excess amounts collected by them by relying on the statutory provisions which made it clear that a dealer who opts for payment of tax under Section 8(f) may collect tax at the rate as shown in the table/proviso but where the tax so collected during the year is in excess of the tax payable for the year under the clause, the tax collected in excess shall be paid over to the Government in addition to the tax payable under the said clause.

5. Before the Appellate Tribunal, the case of the respondents/assessees was essentially that notwithstanding the fact that they had collected tax from their purchasers at rates higher than what was prescribed under the Section, inasmuch as the total tax collected by them from their purchasers was less than the tax that was payable by them under the said Section, there was no requirement for payment of the excess tax collected to the Government. The said contention appears to have appealed to the Appellate Tribunal which found in f