DEPARTMENT OF COMMERCIAL TAXES, KERALA

PROCEEDINGS OF THE AUTHORITY FOR CLARIFICATION

U/s.94 OF THE KERALA VALUE ADDED TAX ACT, 2003.

ORDER No. C3/42447/09/CT DATED 4th July, 2011

Members present are:

1 Abdul Jabbar.V.K, Joint Commissioner (Audit & Inspection), O/o.CCT, Tvpm.

2. T.V. Kamala Bai, Joint Commissioner (Law), O/o.CCT, Tvpm.

3. S.K. Suchala Kumar, Joint Commissioner (General), O/o. CCT, Tvpm.

Sub:- KVAT Act, 2003– Clarification U/s. 94 – Applicability of Section 6(1A)(a) – Judgment of the Hon'ble High Court in OT. Rev. No. 42 of 2009( )– Orders Issued.

Read:- 1. Application from Sri. Satheesh. A.M, Palakkad dated 12/10/2009.

2. This Office Notice of even No. dated 7/2/2011.

3. Letter from the Applicant dated 10/2/2011.

1. Sri. Satheesh. A.M, Palakkad has preferred an application U/s 94 of the Kerala Value Added Tax Act, 2003, seeking clarification on the applicability of Section 6(1A)(a) of the Act.

2. The applicant contends that some Assessing Authorities are of the view that filing of option in Form 1F as stipulated in Rule 10 is mandatory for the dealers falling u/s 6(1A)(a) as well as u/s 6(1A)(b) of the Act. The applicant contends that the said view is incongruent with the provisions of the Act. The applicant contends that sub-section (b) of Section 6(1A) speaks of the option available to dealers whose sale is exempted at their point of sale, to opt for collection of tax, by filing an option in Form 1F, the objective of which is to avoid hindrances in the free flow of goods. The applicant contends that Section 11(1) clearly states that 'subject to other provisions of this section, any registered dealer, liable to tax under subsection(1) of Section 6 shall be eligible for IPT Credit. The position of law as stated in the Act & Rule, confirms that Rule 10A & Form 1F are not relevant for the purpose of sub-section (a) of Section 6(1A). It has relevance only to sub–section (b) of Section 6(1A). The applicant would also rely upon Circular No. 5/2006 to support his contention.

3. The applicant has requested to clarify the following points:

i. Whether IPT Credit will be allowed to dealers falling U/s 6(1A)(a) or not ?

ii. Whether Rule 10A & Form 1F are relevant for cases U/s 6(1A)(a) ?

4. The applicant was afforded an opportunity of hearing vide Notice read as 2nd paper above, but the applicant vide letter read as 3rd paper above has requested to dispose the case on merits.

5. The contentions put forward by the applicant were examined.

6. The issues raised by the applicant were decided and the legal position has already been clarified by the Hon'ble High Court of Kerala in its judgment in O.T. Rev. No. 42 of 2009( ) & W.P.(C) No. 35553 of 2009 dated 19/7/2010 wherein the Hon'ble High Court held that there is no necessity for a registered dealer to take prior permission from the officer under Rule 10A for collection and remittance of tax even if his turnover is below the taxable limit.

The issue raised above is clarified accordingly.