Hasty Assessment denying Concessional Value Added Tax Rates: Kerala HC denies Relief for Failure to Produce Documents [Read Order]

The Kerala High Court denied relief for failure to produce document in a hasty assessment denying concessional Value Added Tax rates (VAT). The issue to be decided was whether the matter lies in the condition imposed by the 2nd respondent, as an order, granting a stay of tax collection until the final disposal of the appeals. The condition stipulates that the appellant must deposit 20% of the existing tax demand for all the appeals. The appellant contested the imposition of this condition and sought redressal.

A veneer business challenges assessment orders spanning 2013-18 under CGST and SGST Acts. Initial appeals were dismissed, leading to second appeals with requests for leniency and a stay. The 2nd respondent granted a temporary stay but imposed a contentious condition, demanding 20% of the existing tax for all appeals. The appellant contests this, citing undue burden and sparking debate on tax authority discretion. N. Muraleedharan Nair, the counsel for the appellant contended that assessment orders were hastily issued without allowing ample time for the submission of the balance ‘C’ Form, consequently denying the rightful concessional rate of tax.

The counsel for the respondent Dr. Thushara James, observed that the appellant was unable to present any documents supporting their claim for a concessional tax rate. Faced with this situation, the 2nd respondent opted to impose specific conditions while granting the stay.

The division Bench of the Kerala High Court comprising  Dr. Justice A K Jayasankaran Nambiar and Dr. Justice Kauser Edappagath  observed that “the tax liability comes to more than `45,00,000/-. We find no illegality in the order of the 2nd respondent imposing a condition to grant stay.  The appeal fails, and it is accordingly dismissed,” thereby dismissing the appeals.

Leave a Reply