IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH THURSDAY, THE 2ND APRIL 2009 / 12TH CHAITHRA 1931 WP(C).No. 8409 of 2009(U) ------------------------------------- PETITIONER(S): ---------------------- E.J. JOSE,ROOTS AUTO ELECTRICALS, PETTA, TRIPPUNITHURA, KOCHI 682 038. BY ADV. SRI.VIJAYAN. K.U. SRI.K.N.SREEKUMARAN RESPONDENT(S): ------------------------ 1. COMMERCIAL TAX OFFICER (AA) DEPARTMENT OF COMMERCIAL TAXES, ERNAKULAM. 2. COMMISSIONER OF COMMERCIAL TAXES, PUBLIC OFFICE BUILDINGS, VIKAS BHAVAN, THIRUVANANTHAPURAM. 3. STATE OF KERALA, REP. BY SECRETARY TO GOVT. TAXES DEPT, GOVT. SECRETARIAT, THIRUVANANTHAPURAM. BY GOVERNMENT PLEADER SRI.C.K.GOVINDAN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02/04/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.M.JOSEPH, J. ------------------------------------------------------ W.P.(C) No. 8409 of 2009-U ---------------------------------------------- Dated, this the 2nd day of April, 2009 J U D G M E N T Petitioner challenges Exts.P4, P5 and P7. The case of the petitioner is as follows: 2. Petitioner commenced business with effect from 11.10.2006. He was registered under the Kerala Value Added Tax Act and Central Sales Tax Act. As an importer, irrespective of the turnover of Rs.10 lakhs he is liable to pay tax. It is stated that he has effected local purchases paying VAT and made sales collecting output tax of Rs.21,817/-. It is stated that after setting off the input tax against output tax, petitioner was refunded the excess tax credit of Rs.19,384/-. But, in audit assessment he was denied the benefit of input tax credit on the ground that the total turnover of the petitioner for the year is below the threshold limit of Rs.10 lakhs. This is placing reliance on para 8 (iii) (5) of Circular No.5/05 of the Commissioner. Petitioner addressed the Commissioner. Ext.P7 is the reply given. It is stated that a dealer who does not pay any output tax claiming that the WPC No.8409/2009 -2- turnover is below the assessable minimum is not eligible to claim input tax credit. Input tax credit is allowed only for those who have output tax liability. Learned counsel for the petitioner points out that petitioner is an assessee having CST registration. As far as importer is concerned irrespective of turnover he is liable to pay output tax under Sec.6 of the Act, and therefore the officer is wrong, he contends. Learned Government Pleader, on instruction, submits that Ext.P4 may be redone. In such circumstances Ext.P4 is quashed and the Ist respondent will consider and take a decision in the matter in accordance with law with opportunity of hearing to the petitioner. I leave open the challenge to Ext.P7. The writ petition is disposed of as above. (K.M.JOSEPH) JUDGE. MS