IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR &

THE HONOURABLE MR. JUSTICE EASWARAN S.

TUESDAY, THE 18 TH DAY OF FEBRUARY 2025 / 29TH MAGHA, 1946 WA NO. 9 OF 2021 AGAINST THE ORDER/JUDGMENT DATED 30.10.2020 IN WP(C) NO.23189 OF 2020 OF HIGH COURT OF KERALA APPELLANTS/RESPONDENTS:

1 ASSISTANT COMMISSIONER (WORKS CONTRACT), OFFICE OF THE DEPUTY COMMISSIONER, STAGE GOODS AND SERVICES TAX DEPARTMENT, MATTANCHERRY, KOCHI 682 002.

2 STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM 695 001.

BY ADV.SRI.V.K.SHAMSUDHEEN, SR.GOVERNMENT PLEADER RESPONDENT/PETITIONER:

KEI INDUSTRIES LTD., BAVA MEMORIAL BUILDINGS, THANNIKKAL, KEERTHI NAGAR ROAD, ELAMAKKARA, KOCHI 682 026, REPRESENTED BY SRI. VINOD MENON, AUTHORIZED SIGNATORY.

BY SRI.K.N.SREEKUMARAN OTHER PRESENT:

Sr.GP SRI.V K SHAMSUDHEEN THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON

18.02.2025, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

J U D G M E N T Easwaran S., J.

The appeal is preferred by the State aggrieved by the judgment dated 30.10.2020 in WP(C)No.23189/2020.

2. The brief facts for the disposal of the writ appeal are as follows:

The petitioner/assessee approached the writ court challenging Ext.P3 order of assessment on the ground that the same is barred by limitation. The petitioner was served with a notice under Section 25(1) of the Kerala Value Added Tax Act, 2003, proposing the best judgment assessment as per show cause notice dated 16.1.2020. It is contended that by Ext.P2, though the petitioner replied to the said show cause notice, the 1^st appellant proceeded to finalise the assessment by order dated 12.3.2020, Ext.P3, without granting sufficient opportunity. Therefore, primarily, it was contended that while passing the order of assessment, the principles of natural justice were violated. It was further contended that as per Section 25(1) of the KVAT Act, the assessment for the year 2013-14 ought to have been completed within an outer limit of five years. Reliance was placed on the decisions of this Court in MCP Enterprises & Others v. State of Kerala & Others [2020 (1) KHC 127] and Baiju AA & Others v. State Tax Officer [2020 (1) KHC 39]. The learned Single Judge who considered the writ petition found that the period of limitation with respect to the assessment year 2013-14 had expired on 1.4.2019 and therefore, Ext.P1 notice dated 16.1.2020 proposing to carry out the assessment is clearly barred by limitation.

Accordingly, the writ petition was allowed.

3. In the appeal, the State contends that the learned Single Judge failed to notice the amendment made to the KVAT Act by Finance Act, 2017, inserting Third Proviso to Section 25(1), whereby the period of five years for completion of the assessment was amended to six years and therefore, the period of assessment which would expire on 31.3.2017 was thus extended to 31.3.2018.

4. We have heard Sri.V.K.Shamsudheen, the learned Senior Government Pleader appearing for the appellant/State, and Sri.K.N.Sreekumaran, the learned counsel appearing for the respondent/writ petitioner/assessee.

5. On a consideration of the rival submissions raised across the bar, we are of the view that the learned Single Judge erred egregiously in allowing the writ petition on the ground that the assessment is time-barred. While doing so, the learned Single Judge failed to consider the impact of the amendment to the Third Proviso to Section 25(1) inserted by the Finance Act, 2017. By the aforesaid amendment, the State gets an extended period of six years from the end of the relevant assessment year for the purpose of completing the assessment.

6. In the present case, we notice that the assessment year is 2013-14. Once the KVAT Act was amended in the year 2017 by extending the period of limitation for re-opening/completing the assessment from five years to six years, the appellants were justified in issuing Ext.P1 notice dated 16.1.2020.