Judgment : Basant Balaji, J. Aggrieved by the judgment of the learned Single Judge, the respondent has filed this appeal. 2. The respondent is an assessee under the Kerala Value Added Tax Act, 2003 (the "KVAT Act") engaged in the trading of ceramic and vitrified tiles, rubber processing chemicals, and kiln-burnt roofing tiles. During the 2014–2015 and 2015–2016 fiscal years, the respondent imported kiln-burnt roofing tiles from China and cleared them through Customs under HSN code 6905 1000. In doing so, the respondent declared that these imported items attracted KVAT at a rate of 14.5% while paying the required advance tax. 3. Subsequently, the respondent filed returns under the KVAT Act treating the imported items as falling under Entry 18(1)(c) of the Third Schedule to the Act, thereby assessing them at a lower rate of 5%. Alleging that this 5% tax payment was improper, the appellant initiated assessment proceedings for the years 2014–15 and 2015–16 under Section 25(1). After considering a detailed objection filed by the respondent, the assessment was finalized by Ext.P2 proceedings, which fixed the tax liability at the higher rate of 14.5%. Following this, separate notices were issued under Section 67 of the KVAT Act proposing to impose a penalty on the grounds that the respondent had attempted to evade tax through misclassification. Although the respondent filed a detailed objection against this proposal, the penalties were ultimately confirmed by Ext.P5 and Ext.P5(a) orders, which the respondent subsequently impugned in the Writ Petition. 4. Upon going through the pleadings, the learned Single Judge observed that although the goods were initially declared as attracting tax at a rate of 14.5%, they were classified under a 5% tax rate when the returns were filed. Relying on Section 24 of the KVAT Act - which permits an assessee to correct filing mistakes and pay the balance tax alongside interest and a settlement fee equal to thrice the interest - this Court held that an assessee retains the right to dispute a commodity's classification and tax rate at any point. Furthermore, the Court noted that if the revenue authority believes an assessee's classification is incorrect, it must afford them an opportunity to revise the return before finalizing the assessment. In such a scenario, the assessee also retains the right to challenge the resulting assessment order before the designated appellate authority under the KVAT Act. 5. Furthermore, the Court noted that if the revenue authority believes an assessee's classification is incorrect, it must afford them an opportunity to revise the return before finalizing the assessment. In such a scenario, the assessee also retains the right to challenge the resulting assessment order before the designated appellate authority under the KVAT Act. 5. The learned Single Judge relied on the judgments in M/s. Chakkiath Brothers v. Assistant Commissioner, Commercial Taxes, Ernakulam and Others [ 2014 (3) KHC 55 ] and M/s. Nilkamal Plastics Ltd., v. Assistant Commissioner-1, Commercial Taxes, Special Circle Mattanchery at Aluva [2015 (79) VST 527] to hold that penalty proceedings cannot be initiated against an assessee based on a mere dispute over classification. The Court emphasized that while an assessee possesses the legitimate right to dispute both the classification of a commodity and its scheduled tax rate, exercising this right cannot be viewed as an event that attracts penal provisions. Applying this rationale to the case at hand, the Court noted that although the respondent had paid advance tax at the rate of 14.5% at the time of customs clearance, they were fully within their rights to subsequently dispute that classification by filing returns at the 5% tax rate. 6. Ultimately, the Revenue Department finalized the assessment for the goods at the higher rate of 14.5% rather than the 5% declared in the returns. Because the classification of a commodity involves a mixed question of law and fact, it remains entirely open for an assessee to dispute it, as the respondent legitimately did here. Consequently, such a dispute over misclassification cannot justify the imposition of a penalty. The learned Single Judge rightly held that the penalty proceedings initiated against the respondent under Section 67 of the KVAT Act could not be legally sustained. Fully concurring with those observations and the judicial precedents relied upon, we find no grounds to interfere with the judgment of the learned Single Judge, and the Writ Appeal stands dismissed.