Joint Commissioner Has Jurisdiction To Initiate Proceedings Against Assessment Order Passed Pursuant To Remand: Kerala High Court

The Kerala High Court stated that Joint Commissioner has jurisdiction to initiate proceedings under Section 56 of the KVAT Act against assessment order passed pursuant to remand. The Division Bench of Justices A.K. Jayasankaran Nambiar and Easwaran S. observed that “when the fresh assessment order was passed consequence to the remand, the original assessment order ceased to exist in law and thereafter the only assessment order that survived for the purposes of exercise of the power of revisions under Section 56 was the subsequent order passed by the Assessing Authority.” In this case, the assessee/petitioner is engaged in the manufacture of unbranded food products. A penalty was imposed on the assessee under Section 67 of the Kerala Value Added Tax Act, 2003. The said order of penalty was challenged by the assessee by filing an appeal before the First Appellate Authority who modified the penalty. Resultantly, a consequential order was passed by the Assessing Authority reducing the penalty by an order. Aggrieved by the assessment order, the assessee preferred an appeal before the First Appellate Authority, who vide his order allowed the appeal by setting aside the assessment order and directing the Assessing Authority to a pass a fresh order. Pursuant to the remand by the First Appellate Authority, a fresh assessment order was passed by the Assessing Authority substantially reducing the tax liability of the assessee for the said assessment year. Finding the fresh assessment order to be erroneous and prejudicial to the interest of the Revenue, the Joint Commissioner issued a notice under Section 56(1) of the KVAT Act to the assessee asking him to show cause as to why the order of the Assessing Authority should not be revised. Thereafter, an order was passed by the Joint Commissioner confirming the proposals in the notice issued to the assessee and enhancing the demand of tax. The assessee submitted that it was not open to the Joint Commissioner to initiate proceedings under Section 56 in respect of the assessment order passed by the Assessing Authority pursuant to the remand by the First Appellate Authority, without separately impugning the First Appellate Authority's order that remanded the matter to the Assessing Authority. The bench disagreed with the contention regarding absence of jurisdiction in the Joint Commissioner to initiate proceedings under Section 56 against the assessment order that was passed pursuant to the remand. The bench observed that there was no finding in the order of the first appellate authority that resulted in a continued validity of the original order of assessment, since the Assessing Authority was directed by the First Appellate Authority to pass a fresh order of assessment, added the bench. In view of the above, the bench dismissed the petition. Case Title: Sajeer A v. State of Kerala Case Number: OT.REV NO. 3 OF 2024Citation: 2025 LiveLaw (Ker) 197 Counsel for Petitioner/ Assessee: Meera V. Menon Counsel for Respondent/ Department: VK Shamsudheen Click Here To Read/Download The Order

Joint Commissioner Has Jurisdiction To Initiate Proceedings Against Assessment Order Passed Pursuant To Remand: Kerala High Court

Mehak Dhiman

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