The issue raised in the above writ petition, is with respect to the inclusion of opening stock in the computation of turn over, to determine the tax liability under Section 7 of the Kerala General Sales Tax Act, 1963 [for brevity “KGST Act”]. The petitioner, for the earlier years, being assessment years 2006-2007 to 2009-2010, had agitated the very same issue before the statutory authorities and the present writ petition is with respect to the assessment for the year 2011-12. The issue of inclusion of opening stock is only with respect to the assessment year 2006-07. For the subsequent years, the question is only with respect to the cascading effect of an increase in turnover for the year 2006-07; in computing the compounded tax in the subsequent years.
2. With respect to the earlier years, this Court relied upon the judgment of the Hon'ble Supreme Court in State of Kerala v. Builders Association of India [1997 (1) KLT 88 (SC)] and Parkkattil Aleyamma v. S.T.O. [(1993) 91 STC 518] to hold WP(C).No.29094 of 2012 - 2 -
that rectification of assessment, especially non-consideration of purchase value of opening stock also can fall under the category, of error apparent on the face of the record. The liability, hence, cannot be assailed.
3. In the instant case also, a similar order was passed for the assessment year in question. However, the learned Government Pleader, in the instant case, as was contended by the Department in the Sales Tax Revisions, with respect to the earlier years also, maintained that the order passed is not a rectification order under Section 43; but is a revised assessment order passed under Section 17 or, alternatively, an order passed on re-opening under Section 19 of the Act.
4. In fact the above contention of the Department was negatived by this Court in S.T.Rev.No.94 of 2012, vide order dated 11.12.2013. The matter was remanded back to the Tribunal only to consider the dates and decide upon the question of limitation, deeming the order passed by the Department as one under Section 43. The issue, as was noticed, boils down to the non-computation of opening stock in the year 2006-07 and the rectification attempted by the officer, to compute the compounding tax payable for the said year under Section 7 of the Act.
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5. For the later years, opening stock was taken into account and the effect of addition made in the 1st year, being 2006-07, would be reflected in the subsequent years also. Hence, the rectification made for the first year and the subsequent years would be relevant, for the present writ petition. The liability and the consequent demand would depend on the rectification, made for the 1st year, viz., 2006-07. That issue is pending before the Tribunal. If that is set aside, on the question of limitation necessarily the rectification order for the subsequent years would also stand set aside. The rectified order passed, under Exhibit P5, hence, is set aside and the matter remanded to the Assessing Officer, for fresh consideration. The Assessing Officer shall consider the same, only after the appeals are disposed of by the Tribunal for the earlier years, being T.A.No.79 of 2011 and connected cases pending before the Kerala Sales Tax Appellate Tribunal, Kottayam.
Writ petition is disposed of on the above terms. The parties are directed to suffer their respective costs.
vku/-
Sd/- K.Vinod Chandran Judge.
( true copy )