KVAT Act | Permission For Compounding Tax Cannot Be Cancelled For Suppression; Only Suppressed Turnover Can Be Taxed: Kerala High Court

The Kerala High Court has held that under the KVAT Act (Kerala Value Added Tax Act, 2003), the assessing authority cannot cancel permission to pay tax at compounding rates for suppression in the same year it was opted, and only the suppressed turnover can be taxed at normal rates. Justice M.A. Abdul Hakhim opined that cancellation proceedings are still pending, and the cancellation is not carried out, and the assessment is not concluded on a best judgment assessment basis. In such a...

Two Days Delay In Paying Last Instalment Under VAT Amnesty Scheme Owing To Technical Glitch Is Condonable: Gujarat High Court

The Gujarat High Court has extended benefit of Amnesty Scheme under the Gujarat Value Added Tax (GVAT) Act, 2003 to dealer who was precluded from making full payment under the Scheme on account of 'automatic' re-adjustment of instalment amount. The Division Bench, comprising Justice Bhargav D. Karia and Justice Pranav Trivedi set aside rejection of application under the Scheme noting that non-payment of differential amount was only due to technical glitches of the online portal. The...

Audit Assessment Under Orissa VAT Act Is Invalid If Audit Visit Report Is Time-Barred: High Court

The Orissa High Court has held that an audit assessment under Section 42 of the OVAT Act (Odisha Value Added Tax Rules, 2005) cannot be initiated when the AVR (Audit Visit Report) is beyond the limitation period. Chief Justice Harish Tandon and Murahari Sri Raman were examining whether the Assessing Authority has jurisdiction to proceed with Audit Assessment under Section 42 of the OVAT Act by issuing of statutory notice in Form VAT-306 on the basis of the AVR submitted under Section...

Revisional Powers U/S 56 KVAT Act Are Limited, Clarificatory Orders Have Only Prospective Effect: Kerala High Court

The Kerala High Court stated that revisional powers under Section 56 of the KVAT Act (Kerala Value Added Tax Act, 2003) are limited, and clarificatory orders only have a prospective effect. Justices A. Muhamed Mustaque and Harisankar V. Menon stated that with reference to the power to issue clarification under Section 94 of the Act, the Commissioner has been empowered to hold that clarificatory orders would only have prospective operation. In other words, the exercise of the power by...

KVAT Act | Input-Tax Credit Can Be Availed If Purchaser Has Genuine Invoices Even If Seller Fails To Remit Tax: Kerala High Court

The Kerala High Court, overruling its earlier decision in C.P. Rasheed v. State of Kerala, has held that input tax credit can be availed under the Kerala Value Added Tax Act, 2003 if the purchaser has genuine tax invoices even if the seller fails to remit tax.The bench opined that “the input tax credit can be legitimately availed by the purchasing dealer under the Kerala Value Added Tax Act, 2003, even in cases where the selling dealer failed to remit the tax due to the...

College Supplying Food Through Canteen Managed By Educational Trust Is Liable For Registration Under KVAT Act: Kerala High Court

The Kerala High Court held that college supplying food through canteen, though managed by educational trust, is liable for registration under KVAT Act. The bench disagreed with the assessee that even if it is assumed that the sales in the canteen are found to be assessable under the provisions of the VAT, it falls within the threshold limit and therefore, the assessee cannot be compelled to take registration. It may be true that the sales across the counter in the canteen may be...

Withholding Tax Refunds Without Justification Violates Section 55 Of JVAT Act: Jharkhand High Court

The Jharkhand High Court has held that withholding tax refunds beyond the statutorily prescribed period without adequate justification, violates Section 55 of the Jharkhand Value Added Tax Act, 2005, and deprives the taxpayer of rightful dues. The Court ruled that the refund must carry interest from the date the excess demand was determined, and non-allocation of funds by the State cannot override this obligation.In the words of the Division Bench comprising the Chief Justice MS Ramachadran Rao...

Delhi VAT | No Interest On Refund For Period Of Delay Attributable To Dealer: High Court

The Delhi High Court has held that if the delay in granting refund to a dealer under the Delhi Value Added Tax Act, 2004 is attributable to the dealer itself, such period of delay shall be excluded for the purposes of awarding interest on refund.Section 38(3)(a)(ii) of DVAT Act stipulates a period of two months for refund of excess tax, penalty, etc., if the period for refund is a quarter.A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta cited Explanation to Section 42(1)...

Revenue Cannot Re-Assess Time Barred Assessment Under KVAT Act Based On CAG Report: Kerala High Court

The Kerala High Court stated that revenue cannot re-assess time barred assessment under KVAT Act based on CAG report. The Division Bench of Justices A.Y. Jayasankaran Nambiar and Easwaran S. observed that “there cannot be an exercise of power under Section 25A of the KVAT Act beyond the period of limitation prescribed under Section 25(1) of the KVAT Act. In fact the provisions of Section 25A allude to this aspect when it refers to the satisfaction to be recorded by the Assessing...

Andhra Pradesh VAT Act | Pleadings On Suppression Of Material Facts, Wilful Evasion Of Tax Are Sine Qua Non For Invoking S.21(5): High Court

The Andhra Pradesh High Court has held that pleadings relating to suppression of material facts, in an assessment order are the sine qua non for invoking section 21(5); by way of which limitation for filing an assessment order is extended to 6 years from 4 years. "There is nowhere any mention of suppression of facts, much less, wilful suppression of facts, resulting in wilful evasion of tax, which is the sine qua non, for invoking Section 21(5) of the Act. In such circumstances, the...

Penalty Provision U/S 16(7) HP VAT Act Cannot Be Invoked Without First Ascertaining Applicability Of S.16(4): Himachal Pradesh High Court

The Himachal Pradesh High Court has held that the penalty provision couched in Section 16(7) of the HP Value Added Tax Act, 2005 cannot be invoked until the statutory authority is satisfied regarding the applicability of Section 16(4) of the Act.Section 16(4) requires a registered dealer to pay the full amount of tax due from him into a Government Treasury before it furnishes the return. Failure to do so attracts a penalty under Section 16(7).A division bench of Justices Tarlok Singh Chauhan and...

Outstanding Demand Under Maharashtra Settlement Can't Be Adjusted Against Refund Payable Under Maharashtra VAT Act: High Court

The Bombay High Court held that authorities under MVAT Act while exercising powers under Maharashtra Settlement of Arrears of Taxes, Interest, Penalties or Late Fees Act, 2022, cannot invoke provisions of Section 50 of MVAT and that too in review proceedings under Settlement Act.The Division Bench of Justice M. S. Sonak and Justice Jitendra Jain observed that there is no provision under Settlement Act which provides for calculation of outstanding arrears of a particular year to be arrived at...