Kerala High Court on Tuesday quashed state government’s orders imposing huge penalties on online retailers Flipkart and Myntra for non-payment of value added tax (VAT) for goods sold online and delivered in the state. Both the companies had contended that they only offer an online marketplace and that taxes are paid by the respective sellers in their home states.
Allowing petitions by Flipkart and Myntra, Justice A K Jayasankar Nambiar wondered how the authorities could levy a tax or impose a penalty in the absence of any material to suggest that returns filed by the sellers had been rejected by concerned authorities.
The court said the government should bear in mind the fundamental constitutional precept under Article 265 that no tax shall be levied or collected except by authority of law.
The commercial tax department had in January last slapped a fine of Rs 53.63 crore on four online trading companies — Flipkart, Myntra, Jabong and Robemall Apparels – accusing them of illegal business in the state during 2012-14. Flipkart was asked to pay a fine of Rs 47.15 crore and Myntra Rs 2.23 crore.
Questioning the government’s action against them at the high court, the e-tailers had alleged that the orders asking them to pay penalties were issued without jurisdiction and authority of law.
Powered by Facebook Comments