IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 7TH OCTOBER 2009 / 15TH ASWINA 1931 WP(C).No. 23569 of 2009(M) -------------------------- PETITIONER: --------------- KERALA CURRY HOUSE, CANAL ROAD, ERANJIPALAM CALICUT - 6, REPRESENTED BY ITS MANAGING PARTNER BINU GEORGE, S/O.T.K.GEORGE. BY ADV. SRI.R.RAMADAS RESPONDENT: --------------- THE SALES TAX OFFICER, COMMERCIAL TAXES, II CIRCLE, KOZHIKODE. BY GOVT. PLEADER SRI. C.K. GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07/10/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: shg/ C.K. ABDUL REHIM, J - - - - - - - - - - - - - - - - - - - - - - - W.P.(C)No. 23569 of 2009 - - - - - - - - - - - - - - - - - - - - - - - Dated this the 7th day of October, 2009 J U D G M E N T 1. Petitioner started a hotel business in April 2007, but failed to get themselves registered under the provisions of the Kerala Value Added Tax Act, 2003 (KVAT Act), in spite of the turnover exceeded the limits prescribed under the said statute. The Intelligence Wing of the Commercial Taxes Department inspected the business place during May 2008 and detected the offence of non-registration and non- payment of tax, for the year 2007-08. However, the petitioner compounded the offence and paid the compounding fee as well as the tax due, along with interest, for the year concerned as evidenced from Ext.P5 proceedings of the Intelligence Officer. The assessing authority concerned had also completed the assessment with respect to the year, and it is stated that appeal against such assessment is now pending. W.P.(C)No. 23569 of 2009 -2- 2. Subsequent to the inspection conducted by the Intelligence Wing, the petitioner submitted Ext.P7 application for registration, and registration was granted by the authority. According to the petitioner the date of commencement of business was happened to be wrongly shown in the application as 01.04.2008 instead of 01.04.2007. Hence the petitioner submitted Ext.P8 application seeking correction of the date of commencement of business in the registration particulars. He had produced documents pertaining to the inspection and assessment in support of his contention that actual date of commencement of business was 01.04.2007. But the petition submitted under Ext.P8 for getting the date of commencement of business corrected, is now been rejected by the respondent through Ext.P9 order. The petitioner is aggrieved by the said order . 3. It is noticed from Ext.P9 that the correction sought for was disallowed by the respondent on the ground that the petitioner himself had shown the date of W.P.(C)No. 23569 of 2009 -3- commencement of business as 01.04.2008 in the application submitted in Form No.I. Further it is observed that the assessment with respect to the year 2007-08 is pending in appeal and therefore such correction cannot be allowed. 4. It is pertinent to note that the application for correction itself was submitted on the premise that there occurred a mistake in the date of commencement of business mentioned in the application. Therefore the finding of the respondent that the correction could not be granted on the basis of the details given in the registration application, seems to be unsustainable. 5. Next question to be considered is as to whether a registration under KVAT Act can be issued with a previous date than the date of application as date of commencement of business. Learned counsel appearing for the petitioner had pointed out the amendments brought to Section 16 of the KVAT Act through the Kerala Finance Act, 2009. The proviso of Section (ii) of Sub Section 16 is seen amended as follows: W.P.(C)No. 23569 of 2009 -4- “ Provided that registration shall be deemed to have been granted with effect from the date of commencement of business irrespective of the date of application, for the purposes of,- (a) paying tax under sub-section (5) of section 6, subject to eligibility, and (b) opting for payment of tax under section 8 for the relevant years subject to eligibility: Provided further that new dealers applying for registration and existing dealers having registration may avail this benefit subject to the condition that they shall pay tax under the respective provisions along with interest and will not be entitled for any refunds relating to the period prior to filing of application for registration: Provided also that in the case of dealers against whom an offence has been detected under section 67 of the Act before filing application for registration, registration shall be granted under this sub-section subject to the finalisation of the proceedings in respect of the offence so detected.” 6. The amended proviso of Section 16 (2) is to the effect that the registration shall be deemed to have been granted with effect from the date of commencement of the business, irrespective of the date of application for W.P.(C)No. 23569 of 2009 -5- registration, for the purposes like payment of tax under sub- section (5) of Section 6 or for opting payment under the compounded rate under Section 8. In the case at hand, the authorities concerned have imposed penalty as well as assessment with respect to the year 2007-08. It is evident that in fact the petitioner had carried out business during the said year and the authorities had imposed liability of tax on the petitioner with respect to that year. Therefore it could not be denied that the petitioner had commenced business during the assessment year 2007-08. At the same time the question which is to be considered is as to whether the proceedings which are already initiated against the petitioner for imposition of tax or penalty, pertaining to the period prior to submission of application for registration can be allowed to be altered or prejudiced in view of the correction of date of commencement of business to be granted in the registration particulars. Going by the above quoted provisions it is evident that the statute had permitted certain benefits which the assessee can avail of W.P.(C)No. 23569 of 2009 -6- by virtue of the clause provided therein, regarding the date of commencement of business. Therefore the question in this regard will be governed by the provisions contained therein. 7. Under the above circumstances I am of the opinion that the rejection of the application for correction of the date of commencement of business, is unsustainable and unjustifiable in the given set of facts and circumstances. Therefore I am inclined to set aside Ext.P9 order and to direct the respondent to allow Ext.P8 application for effecting correction of the date of commencement of business. At the same time it is made clear that such correction of date of commencement of business will be without prejudice to any of the proceedings now initiated against the petitioner with respect to the period prior to the date of submission of the application for registration, subject to various provisions contained in the KVAT Act, including Section 16 (2). 8. In the result Ext.P9 is quashed. The respondent is W.P.(C)No. 23569 of 2009 -7- directed to consider Ext.P8 afresh and to allow date of correction with respect to the date of commencement of business as requested therein, subject to the observations made above. C.K. ABDUL REHIM JUDGE shg/