2013 (5) TMI 779 - HC - VAT and Sales Tax

Rejection of rectification application - Held that - The assessee/petitioner had filed a letter dated June 21, 2011 before the assessing officer enclosing the copies of the orders passed by this court and has contended the same is applicable to the facts on hand. The assessment orders (annexures Y, Z, A1 and A2) dated July 6, 2011 do not indicate about consideration of these judgments. There is no discussion as to how the said judgments are inapplicable to the petitioner's claim. It is for this precise reason this court had set aside the assessment orders passed earlier. Even now in the impugned orders no such exercise has been undertaken by the assessing officer. In that view of the matter, the assessment orders dated July 6, 2011, annexures Y, Z, A1 and A2, cannot be sustained particularly in the background of the direction issued by this court earlier 2011 (2) TMI 1348 - KARNATAKA HIGH COURT (Dayananda Extraction Industries Pvt. Ltd. v. Deputy Commissioner of Commercial Taxes) and the same is liable to be quashed and matter requires to be remitted back to the assessing officer to pass assessment orders afresh. - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Challenge to assessment orders for tax payable on residue of extracted products; Rejection of rectification applications; Petition for recovery under Karnataka Sales Tax Act; Judicial review of assessment orders; Compliance with court directions for reassessment.

Analysis:
The petitioner, a private limited company involved in oil extraction, challenged assessment orders determining tax payable on residue products like rice bran and oil-cakes, claiming deductions for products already taxed. The assessing authority held residue also taxable, leading to rejection of rectification applications based on circulars and court judgments. Demand notices and recovery petition followed. The petitioner filed writ petitions, resulting in a court order directing reassessment. Despite court directions, new assessment orders were passed in 2011, upholding tax liability on residue without considering relevant judgments cited by the petitioner. The court found the assessing officer failed to address the petitioner's contentions and set aside the assessment orders, emphasizing the need for a fresh assessment considering the court's previous directions and cited judgments. The court allowed the writ petitions, quashed the assessment orders, and remitted the matter for fresh assessment by the assessing officer within a specified timeframe.

This judgment highlights the importance of assessing officers considering relevant legal precedents and court directions in tax assessment cases. The court emphasized the duty of the assessing officer to thoroughly examine issues raised by the petitioner and apply relevant legal principles. Failure to do so can lead to judicial intervention and orders for reassessment. The judgment underscores the significance of a fair and comprehensive assessment process, ensuring that taxpayers' contentions are duly considered and addressed in line with established legal principles. The court's decision to set aside the assessment orders and remit the matter for fresh assessment underscores the need for procedural fairness and adherence to legal standards in tax matters.