IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR.JUSTICE K.T.SANKARAN FRIDAY, THE 21ST MAY 2010 / 31ST VAISAKHA 1932 WP(C).No. 1337 of 2009(H) ------------------------- PETITIONER(S): --------------- P.R.MANIKANTAN,PROPRIETOR,GOKUL ENGINEERING INDUSTRIES,4/66,MAROTTICHUVADU JUNCTION,EDAPPALLY,KOCHI-24. BY ADV. SRI.V.P.SUKUMAR SRI.V.DEVANANDA NARASIMHAM RESPONDENT(S): --------------- 1. THE ASSISTANT COMMISSIONER(ASSESSMENT), COMMERCIAL TAXES,SPECIAL CIRCLE-1,THEVARA, ERNAKULAM. 2. THE COMMISSIONER OF COMMERCIAL TAXES, THIRUVANANTHAPURAM. 3. THE INSPECTING ASST.COMMISSIONER, COMMERCIAL TAXES,ERNAKULAM,KOCHI-30. SPECIAL GOVERNMENT PLEADER FOR TAXES FOR R1-3 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 21/05/2010 ALONG WITH W.P.(c) 7519/2009. THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 1337 of 2009(H) Page numbers APPENDIX PETITIONER'S EXHIBITS: 1. EXHIBIT P1 : TRUE COPY OF THE APPLICATION DATED 09/04/2008 SUBMITTED BY THE PETITIONER BEFORE THE 1st RESPONDENT UNDER SEC.8 OF THE KVAT ACT. 2. EXHIBIT P2 : TRUE COPY OF THE NOTICE DATED 15/10/2008 ISSUED TO THE PETITIONER BY THE 1st RESPONDENT. 3. EXHIBIT P3 : TRUE COPY OF THE NOTICE DATED 15/10/2008 ISSUED TO THE PETITIONER BY THE 1st RESPONDENT UNDER SEC.25(1) OF THE KVAT ACT. 4. EXHIBIT P4 : TRUE COPY OF THE REPLY DATED 28/10/2008 SUBMITTED BY THE PETITIONER BEFORE THE 1st RESPONDENT. 5. EXHIBIT P5 : TRUE COPY OF THE ASSESSMENT ORDER DATED 15/11/2008 PASSED BY THE 1st RESPONDENT. 6. EXHIBIT P6 : TRUE COPY OF THE CLARIFICATION DATED 21/04/2008 ISSUED BY THE 2nd RESPONDENT. 7. EXHIBIT P7 : TRUE COPY OF THE NOTICE DATED 17/11/2008 ISSUED TO THE PETITIONER BY THE 1st RESPONDENT UNDER SEC.25 OF THE KVAT ACT. 8. EXHIBIT P8 : TRUE COPY OF THE RR NOTICE DATED 01/01/2009 ISSUED TO THE PETITIONER BY THE 3rd RESPONDENT. RESPONDENT'S EXHIBITS: 1. EXHIBIT R1(a) : A TRUE COPY OF THE JUDGMENT IN OTA 11/2008 DATED 25/03/2009. //TRUE COPY// P.A TO JUDGE K.T.SANKARAN, J ----------------------- W.P(c) Nos.1337 OF 2009 AND 7519 OF 2009 -------------------------------- Dated this the 21st day of May 2010 JUDGMENT In these writ petitions, the clarification issued by the Commissioner of Commercial Taxes, Thiruvananthapuram in Order No.C3 45384/07/CT dated 21/04/2008 is under challenge. The Commissioner held that supply and erection of rolling shutters amounts to sale of goods within the meaning of the provisions of Kerala Value Added Tax Act and therefore, the assessees are not entitled to compound the tax under Section 8 of the KVAT Act. 2. The learned Government Pleader for Taxes submitted that the issue involved in the case is covered by the Division Bench decision in “Ernakulam District Rolling Shutter Fabricators Association v. Commissioner, Department of Commercial Taxes” (2009(3) KLT 872) wherein the Division Bench held that the view taken by the Commissioner is correct. It was held that the second proviso to Section 8(a) makes an exception to the compounding provisions with regard to works contract involving transfer of materials in the form of goods. It was also held that the effect of the second proviso is that Section 8(a) providing for compounding is not W.P(c) Nos.1337 OF 2009 AND 7519 OF 2009 Page numbers applicable to works contract involving transfer of materials in the form of goods. The learned Government Pleader also submitted that in (2009(3) KLT 872), the appeal was filed by the Association at whose instance the Commissioner for Commercial Taxes had issued clarification invoking Section 94 of the KVAT Act. 3. Sri.V.P.Sukumar, learned counsel appearing for the petitioners, submitted, the Division Bench in (2009(3) KLT 872) mainly relied on the decisions of the Supreme Court in “State of Andhra Pradesh v. Kone Elevators India Private Limited” ((2005)3 SCC 389). It is submitted that the Supreme Court in Kone Elevator's case did not advert to certain earlier decisions of the Supreme Court directly on the point. Sri. V.P.Sukumar also submitted that taking note of this situation, the Supreme Court in “Kone Elevators India Private Limited v.State of Tamil Nadu and Others” ((2008)15 VST 457 (SC)) referred the question to be considered by a constitution bench. In these circumstances, the learned counsel for the petitioner submitted that the matter requires to be considered by a larger bench. 4. The learned Government Pleader submitted that a Division Bench of this court in OTA No.12/2008 held that an appeal at the instance of a person affected by a decision of the Commissioner under Section 94 of the KVAT Act is maintainable. W.P(c) Nos.1337 OF 2009 AND 7519 OF 2009 Page numbers In other words, even if the affected party was not a party to the proceedings before the Commissioner, he could challenge the order passed by the Commissioner in an appeal. Since an appeal is maintainable, the petitioners need not confine their remedy under Article 226 of the Constitution of India. 5. Faced with this situation, learned counsel for the petitioner submitted that the writ petitions were filed on 12/01/2009 and 06/03/2009 and if the appeals are filed at this stage, there would be bar of limitation. It is trite law that when a proceeding is found to be defective because of want of jurisdiction or availability of effective alternative remedy, the time during which the petitioner was prosecuting another proceeding in good faith is liable to be excluded, for the purpose of computing the period of limitation. These aspects could be pointed out by the petitioners when they prefer appeals. 6. Reserving the right of the petitioners to challenge the decision of the Commissioner in appeals, the writ petitions are closed with the above observations. Sd/- K.T.SANKARAN JUDGE //True Copy// vdv P.A TO JUDGE