At, High Court of Karnataka
By, THE HONOURABLE MRS. JUSTICE S. SUJATHA
For the Petitioner: H. Vani, Advocate. For the Respondents: T.K. Vadamurthy, AGA.
(Prayer: These Writ petitions are filed under Articles 226 and 227 of the Constitution of India praying to set aside the reassessment order bearing T No.244/12- 13 dated 20.04.2012 for the Year 2006-07 vide Annexure-A, reassessment order bearing T No.244/12- 13 dated 20.04.2012 for the Year 2007-08 vide Annexure-B and reassessment order bearing T No.101/12-13 dated 20.04.2012 for the Year 2008-09 vide Annexure-C passed by R-2.)
1. The petitioner has assailed the re-assessment order dated 20.4.2012 relating to the tax periods 2006-2007, 2007-2008 and 2008-2009 as well as the endorsements dated 1.9.2016 issued by the respondent No.1 at Annexure-M, N and P inter alia seeking for a direction to the respondent No.1 to pass de novo re-assessment orders by considering the books of accounts produced along with the rectification applications filed on 21.6.2016 vide Annexures J, K and L for the tax periods 2006-07, 2007-08 and 2008-09 respectively.
2. The petitioner was a dealer registered under the provisions of the Karnataka Value Added Tax Act, 2003 (for short the Act ) during the relevant tax periods. The petitioner was engaged in trading of PVC pipes, GI pipes and fittings, electrical goods and drip irrigation equipments. Relating to the tax periods 2006-07, 2007-08 and 2008-09, respondent No.1 has concluded the re-assessment after issuing notices for production of books of accounts and the proposition notices under the provisions of Section 39(1) of the Act proposing to reassess the tax payable by the petitioner.
3. It is the grievance of the petitioner that the said proposition notices were never served upon the petitioner.
4. On the other hand, respondent No.1 has arbitrarily concluded re-assessment orders exparte determining huge amounts of tax, interest and penalty as payable by the petitioner. The said re-assessment orders were followed by demand notices. Being aggrieved by the same, the petitioner had preferred appeals and the same came to be dismissed as withdrawn. Subsequently, petitioner filed applications seeking rectification of the re-assessment orders. The same came to be rejected by the endorsements at Annexures M, N and P. Hence, these writ petitions.
5. Learned counsel Smt. Vani H appearing for the petitioner would submit that the reasons assigned by the respondent No.1 for rejecting the rectification applications are untenable. The provisions of Section 69(3) of the Act contemplates that where an order has been considered and decided in any proceedings by way of appeal or revision relating to an order referred to in sub-section(1), the authority passing such order may, not withstanding anything contained in any law for the time being in force, amend the order under that sub-section in relation to any matter other than the matter which has been so considered and decided.
6. The first Appellate Authority has dismissed the appeals as withdrawn observing that the appellant has sought withdrawal of the appeal without assigning any reasons; the request of the appellant to withdraw the appeal is examined; with voluntary withdrawal of the appeal, there is no issue for consideration for this office at this point of time. Hence, the appeal is dismissed as withdrawn. Such being the position, there was no impediment for the respondent No.1 to consider the request of the petitioner for rectification as sought for. Learned counsel placed reliance on the orders of this Court in the case of M/s Gold Finch Hotels Private Limited Vs. Deputy Commissioner of Commercial Taxes (Audit) in W.P.Nos.51975-986/2013 (D.D.22.11.2013) as well as Sri.P. Giri Raju Vs. The Commercial Tax Officer (Audit) in W.P.No.16563/2015 and allied matters (D.D.28.4.2015) in support of her contention that the prescribed Authority has concluded the assessment without providing sufficient opportunity to the petitioner and huge demands were created based on the ground that no books of accounts were produced by the petitioner. In such circumstances, it was incumbent on the respondent No.1 to consider the books of accounts proposed to be submitted by the petitioner to determine the correct tax liability in accordance with law.
7. Learned AGA Sri. T.K.Vedamurthy appearing for the respondent supporting the impugned orders submitted that the petitioner has approached the first Appellate Authority against the re-assessment orders with an inordinate delay of 685 days and after realizing that the first Appellate Authority is not vested with the power to condone the delay beyond 210 days, has withdrawn the appeals and approached the prescribed Authority with the rectification applications to redo the assessment which is not permissible. The prescribed Authority is not empowered to revisit the concluded issues. The grounds urged by the petitioner seeking for a rectification of the applications would not come within the ambit of Section 69 of the Act. It is further submitted that the petitioner has approached this court again with an inordinate delay challenging the endorsement dated 1.9.2016. On the ground of delay and laches itself, the writ petitions are liable to be dismissed.
8. I have carefully considered the rival submissions of the learned counsel appearing for the parties and perused the material on record.
9. The factum of this case revolves around the endorsement issued by the prescribed Authority respondent No.1 in rejecting the request of the petitioner for rectifying the re-assessment orders relating to the tax periods in question.
10. Section 69 of the Act can be invoked with a view to rectify the mistake apparent from the record. It is the primary ground of the petitioner that the books of accounts were not considered by the prescribed Authority while concluding the assessments which would otherwise drastically have an impact on the total tax liability determined. The reason assigned by the prescribed Authority for rejecting the rectification applications is that the applications filed by the petitioner having dismissed, the said Authority has no powers to consider the rectification applications. The said reasons are against the tenor of Section 69(3) which specifies that it is only relating to any manner which has been so considered and decided, the Authority passing such order is precluded to rectify such orders. In other words, there is no embargo for the Assessing Authority to amend the order under sub-section(3) of Section 69 of the Act in relation to any matter other than which has been so considered and decided in proceedings by way of appeal or revision relating to an order referred to under sub-section (1) of Section 69 of the Act. Though the Appellate Authority has dismissed the appeals as withdrawn, no matter has been considered and decided on merits. That being the position, the prescribed Authority rejecting the rectification applications on the ground of dismissal of the appeals cannot be sustained.
11. The books of accounts not being produced by the petitioner allegedly for non service of notices, would have a direct bearing in determining the tax liability. The prescribed Authority ought to have examined whether the request made by the petitioner would be amenable to rectification under Section 69 of the Act. Hence, this court is of the considered opinion that the interest of justice would be sub-served in setting aside the endorsements Annexures M, N and P to the w
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rit petitions and restoring the proceedings to the file of the respondent No.1 to reconsider the same in accordance with law after providing an opportunity of hearing to the petitioner subject to the petitioner depositing 30% of the total demand made by the prescribed Authority relating to the tax periods in question within a period of three weeks from today. The petitioner shall appear before the prescribed Authority on 26.4.2019 without expecting any notice and shall receive further orders. 12. With the aforesaid observations and directions, writ petitions stand disposed of. In the event of non compliance of the directions of this court by the petitioner, it is needless to observe that the demand orders in pursuant to the endorsements impugned shall revive without any further reference to this court.