IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE K.M.JOSEPH THURSDAY, THE 28TH FEBRUARY 2008 / 9TH PHALGUNA 1929 ST.Rev..No. 54 of 2008 ---------------------------------------- TA.88/2005 of STAT ADDL.BENCH, KOTTAYAM .................... REVISION PETITIONER/RESPONDENT/ASSESSEE: ----------------------------------------------------------------------- A.M.REEBAI, HILL PRODUCE DEALER, UPPUTHARA, IDUKKI DISTRICT. BY ADV. SRI.ARIKKAT VIJAYAN MENON, SRI.HARISANKAR V. MENON, SMT.MEERA V.MENON & SRI.MAHESH V.MENON RESPONDENT/APPELLANT/REVENUE: ------------------------------------------------------- STATE OF KERALA. BY SR. GOVERNMENT PLEADER SHRI MUHAMMED RAFIQ. THIS SALES TAX REVISION HAVING COME UP FOR ADMISSION ON 28/02/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: H.L. DATTU, CJ. & K. M. JOSEPH, J. -------------------------------------------------- S.T.REV. NO. 54 OF 2008 --------------------------------------------------- Dated this the 28th February, 2008 JUDGMENT H. L. DATTU, C.J: Though this Revision Petition is posted for admission, by consent of the learned counsel appearing for the parties to the lis, the matter is taken up for final hearing, since the issue involved lies in a narrow compass. 2. The assessee is a dealer registered both under the KGST Act and CST Act. He is engaged in trading of hill produces. 3. For the assessment year 1998 - 1999, the assessing authority has completed assessment by his order dated 01.08.2000 by accepting Form 25 Declaration produced by the petitioner which was a copy printed by the purchasing dealer. 4. Noticing the aforesaid irregularity in the order of assessment so passed, the assessing authority, by initiating proceedings under Section 19 of the KGST Act, has revised his orders of assessment dated 01.08.2000 on the ground that the assessee ought to have produced Form 25 Declaration printed and obtained from the Department. 5. Aggrieved by the orders of re-assessments so passed, the assessee filed Appeal before the First Appellate Authority, who by his order dated 07.12.2004, accepted the version of the assessee and allowed the Appeal. 6. The State being aggrieved by the aforesaid order of the First Appellate Authority, had carried the matter before the Kerala Sales Tax Appellate Tribunal in T.A. No.88 of 2005. The Tribunal by its order dated 25.8.2006 has allowed the State's Appeal and has reversed the findings and conclusions reached by the First Appellate Authority. S.T.REV. 54/08 2 7. The findings of the Tribunal is as under: " We have examined the rival contentions and perused the connected assessment records. The original assessment was completed on 1.8.2000 fixing a total and exempted turnover of Rs.1,21,33,291/=. Subsequently it was revealed that Form 25 declaration filed to the turnover of Rs.1,21,00,650/= are not in accordance with SRO 470/99. So notice was issued to the assessee under Sec. 19 of the KGST Act. On receipt of the notice, the assessee requested three months time to produce valid Form 25 declarations in the departmental form. But no valid Form 25 declarations were filed. The assessee's representative after receipt of notice did not appear before the assessing authority. Hence the assessing authority disallowed the claim of exemption in respect of the sales not covered by valid Form 25 declaration. But the Appellate Assistant Commissioner has accepted the case of the respondent that the purchaser has already stopped his business and directed the assessing authority to ascertain the fact and if the contention regarding the stoppage of business is found to be correct accept the Form 25 declaration filed. The production of Form 25 is exempted from the operation of Rule 65 thereof upto 31.2.1998. SRO 470/99 In exercise of the powers conferred by the proviso to Rule 65 of the KGST Rules the Government of Kerala having considered it necessary so to do hereby exempt Form 25 of the said Rules from the operation of Rule 65 thereof up to 31.12.1998. Rule 66 of KGST Rules Use of Form. Where a form has been prescribed by these Rules, only the appropriate form printed under the authority of the State Government shall be used for the purpose. Therefore, it is clear that by virtue of SRO 470/99 Form 25 declaration issued by the department is exempted from the S.T.REV. 54/08 3 operation of Rule 65 up to 31-12-1998. From 1-1-1999 onwards the turnover is liable to be exempted only on production of valid Form 25 declaration which should be in accordance with SRO 470/99. It is not in dispute that the entire sales are not supported by valid Form 25 declarations. The contention put forth by the respondent before the first appellate authority that the purchaser has already stopped the business and accordingly he could not produce Form 25 declaration issued by the department cannot be accepted for the reason that the assessee has no such case before the assessing authority. Further the respondent filed an application on 27-2-2002 before the assessing authority (page 125 of the assmt. Records) that he wants time to produce Form 25 declaration issued by the department and the purchaser is in foreign countries in connection with his business. Under these circumstances we are unable to agree with the view taken by the Appellate Assistant Commissioner to order exemption. As the Form 25 declarations filed before the assessing authority are not valid, the disallowance of the claim of exemption to the respondent by the assessing authority is affirmed and the order of the Appellate Assistant Commissioner is set aside. The revised order of assessment dated 26.6.2004 is restored." 8. Aggrieved by the aforesaid order so passed by the Tribunal, the assessee is before us in this Tax Revision Case. The assessee has framed the following questions of law for our consideration and decision: "A. Whether on the facts and in the circumstances of the case, has not the Appellate Tribunal gone wrong in sustaining the assessment as it is not due to any fault of the petitioner that he could not produce the prescribed Form No.25 in time ? B. Whether on the facts and in the circumstances of S.T.REV. 54/08 4 the case, has not the Appellate Tribunal gone wrong in not remitting the matter back to assessing authority granting one more opportunity to the petitioner to produce the Form No.25 declarations ?." 9. Shri Arikkat Vijayan Menon, learned counsel appearing for the revision petitioner very fairly submitted that the order passed by the Tribunal cannot be taken exception to by the assessee. But the counsel would submit that the assessee has now obtained Form 25 declaration as required under the KGST Act and the Rules and the revision petitioner may be permitted to produce those declarations before the assessing authority and seek appropriate reliefs. 10. Shri Muhammed Rafiq, learned Senior Government Pleader on instructions submits that if the course suggested by the counsel for petitioner is accepted, it may not cause any prejudice to the Department. 11. In view of the above, while confirming the order passed by the Tribunal, we dispose of the S.T. Revision Case as follows: The order passed by the Tribunal is confirmed. However, we permit the assessee to produce the Form 25 declarations printed under the authority of the State. If the petitioner so produces the Form 25 declarations as directed by us, the assessing authority will look into the matter and if it is permissible and possible, will grant exemption to the assessee. Ordered accordingly. H.L. DATTU, CHIEF JUSTICE K.M. JOSEPH, JUDGE kbk.