The Kerala High Court, while granting relief to the assessee, has held that the mistake of applying the correct VAT rate can be rectified under the Kerala Value Added Tax Act and therefore a rectification application cannot be rejected for submission of documents along with the application.
The petitioner, M/s Crescent Constructions approached the High Court contending that the goods which were taxable at the rate of 5% were imposed with the tax at the rate of 13.5% by the authority. Accordingly, the petitioner has filed an application for rectification along with c-forms and invoices which according to the petitioner show that the goods in question could have been taxed only at 5%. However, the rectification application was rejected by the Officer on the ground that the petitioner has produced the documents which showed that the goods were taxable only at the rate of 5%, along with the rectification petition and not at the time of assessment.
Justice P Gopinath noted that the officer has misdirected himself in law while deciding to reject the application for rectification on the ground that the petitioner produced the documents in support of the claim for lower rate of tax only along with the application for rectification.
“As is evident from provisions of Section 66 of the KVAT Act, disputes such as these are matters which can be considered in a rectification application and once it is brought to the notice of the Officer that there is a mistake in applying the correct rate of tax, it was within the power conferred on the Officer under Section 66 to rectify such mistake. As already noticed a reading of Ext.P5 suggests that the Officer had rejected the application for rectification only on the ground that the documents in support of a lower rate of tax were produced only along with the application for rectification,” the Court said.
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