Top Stories Alleged Suppression of Total Turnover and Evasion of Tax: Kerala HC dismisses Writ Appeal devoid of Merit [Read Order] He did not file any reply or avail himself of the opportunity to hear, observed Kerala HC. By Manu Sharma – On March 10, 2024 9:01 am – 2 mins read A Division Bench of the Kerala High Court dismissed a Writ Appeal preferred against proceedings for alleged suppression of total turnover and evasion of tax under Kerala Value Added Tax Act, being devoid of merit.. The writ appellant challenged the order under the provisions of the Kerala Value Added Tax Act. The Single Judge had dismissed the writ petition holding that the appellant may avail any other statutory remedy as may be available under law. The Bench heard S. Anil Kumar, the counsel for the appellant and V.K. Shamsudheen, the Senior Government Pleader.

The appellant is the proprietor of M/s. Blue Seven Star Constructions Private Limited which is engaged in undertaking labor construction contract work. According to the appellant, since there was not much work, and even the meager work done did not involve the supply of materials, there was no necessity to take registration under the KVAT Act. The appellant was also the managing partner of a private limited company M/s Blue Seven Star Construction Private Limited engaged in the labor contract work in construction business. The wife of the appellant was another Director of the said company. It has GST registration. The grievance of the appellant is that Ext.P5 assessment order for the year 2016-17 was passed by the 1st respondent erroneously saddling him with huge liability relying on the income tax return and profit and loss statement of M/s Blue Seven Star Constructions Private Limited.

The Bench observed that, “The records would show that before passing the impugned order, the intelligence officer of commercial taxes after conducting enquiry under Section 47(6) of the KVAT Act found that the proprietorship concern of the appellant had suppressed a total turn over and had evaded the payment of tax.” The appellant was issued a notice in Form 17 under Section 25(1) of the KVAT Act. It was further noted that, “Despite service of notice, the appellant did not produce the books of account, nor did he file any reply. Thereafter, the assessment under section 25(1) of the KVAT Act was proposed and the copy of the order was given to the appellant for filing objection, if any. An opportunity of hearing was also given to him.” The Kerala High Court bench also observed that,

“He did not file any reply or avail himself of the opportunity to hear. Thus, the impugned order was passed after complying with the statutory formalities. The question whether the 1st respondent fixed the turnover of the appellant’s proprietorship concern by relying on the income tax return and profit and loss statement of M/s Blue Seven Star Constructions Private Limited of which he was only a managing partner is a disputed question of fact which cannot be adjudicated in a writ petition.” Further observing that, “Even though Ext.P5 order was passed way back in 29/2/2020, the appellant so far has not preferred any appeal against the said order”, the Division Bench of Justice A K Jayasankaran Nambiar and Justice Kauser Edappagath held that, “We find no merit in the appeal and accordingly it is dismissed.”