The Kerala High Court has quashed two legal notices issued against Flipkart which had asked the company to pay penalties of Rs.47 crores for allegedly evading VAT.
Flipkart filed a review petition, challenging the notice issued by the government. The company said that it does not sell goods to customers directly, but only provided an online market platform for its customers to buy goods.
“It is the sellers who should pay the Value Added Tax (VAT)/ Central Sales Tax (CST), as applicable. The company does not own the goods, and acts as a mere facilitator between the buyer and the seller. There was no sale of goods in order to be liable under the Kerala VAT Act – 2003 or the CST Act,” stated Flipkart’s petitioner.
“Intelligence officers of the Tax Department should refer the case to the assessing officers concerned for finalising the tax liability, before taking recourse to the penal provisions of the Act. The assessing officers can then proceed as per provisions of the Act to determine the tax liability of the dealer concerned,” said HC after reviewing the petition on Tuesday. [Source]