The Kerala High Court has held that 1% of the disputed Value Added Tax (VAT) amount has to be paid to the Kerala Legal Benefit Fund from 07.04.2016. It was held that the amendment is prospective and can apply only to appeals arising from the year in which the amendment was effected and thereafter. Read More: Eligibility for Excise Duty Exemption: CESTAT Grants Exemption for Aircraft Parts Supplied to Research Institutions Hindustan Prefab Ltd, the petitioner, is a registered dealer under the Kerala Value Added Tax Act, 2003.

The Appellate Authority has, by assessment order, rejected the appeal as defective for non-payment of court fees due to the Kerala Legal Benefit Fund. Petitioner challenges the said order dated 28.01.2025, rejecting his appeal as defective. According to the counsel for the petitioner, the petitioner needs to pay only 0.5% of the disputed amount because of the relevant notification and the judgment of the Court in O.P.(Tax) No. 2/2017. Worried About SME IPO Pitfalls? Gain Clarity with This Advanced Course! Register Now Adv.S. Anil Kumar, the counsel for the petitioner and Smt. Jasmin M. M. , the Government pleader, has also perused the records. A single Justice Bechu KurianThomas, held that the statute now mandates the amount to be paid to the Kerala Legal Benefit Fund as 1% of the disputed tax amount, by virtue of the amendment dated 07.04.2016.

The Court has held, through series of judgments, that the amendment is prospective and can apply only to appeals arising from the year in which the amendment was effected and thereafter. While allowing the appeal , the court set aside the order rejecting petitioner’s appeal as defective. If the petitioner remits 0.5% of the disputed tax (if not already paid) in the aforesaid appeal to the Kerala Legal Benefit Fund and also furnishes a personal bond without sureties before the Assessing Authority undertaking to pay the balance amount due under the Kerala Legal Benefit Fund, if ultimately found payable, the Appellate Authority shall restore the appeal and consider the same on merits in accordance with law.