2014 (7) TMI 1093 - HC - VAT and Sales Tax

Delay in filing of return - Held that - It is noted from Annexure B, which is a letter dated 24.3.2010, addressed by the KSFC to the petitioner that its assets including the manufacturing unit which possession was taken over by the KSFC in the year 2005, was released only on 15.3.2010. Therefore, the service of notice by affixture on 30.7.2007 on the premises of the petitioner's unit was at a time when possession of the manufacturing unit was with KSFC. Therefore, it could be inferred that there was no direct or actual service of notice on the petitioner's Company as such. It is only on 15.3.2010 that the assets of the Company including the manufacturing unit were released to the petitioner by KSFC. Thereafter, on 13.4.2010, the petitioner, on coming to know about the assessment orders, filed an application seeking certified copies of those orders and on receipt of the same on 17.4.2010, the petitioner filed the appeals on 23.4.2010. In that view of the matter, there is no delay in filing the appeals. - Even otherwise, under the proviso to sub-section (2) of Section 20, provision is there to admit an appeal preferred after the period of 30 days from the date on which the notice of assessment is served, but within a further period of 180 days if it is satisfied that the appellant had sufficient cause for not preferring the appeal within that period. In that view of the matter, the dismissal of the appeals on delay is erroneous. The impugned order at Annexure-F is quashed. The matter is remanded to the 1st respondent to consider the same on merits and in accordance with law - Decided in favour of assessee.

Summary

Issues:
Challenge to order of Joint Commissioner of Commercial Taxes - Delay in filing appeals - Service of notice - Admissibility of appeals under proviso to sub-section (2) of Section 20.

Analysis:
The judgment revolves around the challenge to the order of the Joint Commissioner of Commercial Taxes, primarily focusing on the issue of delay in filing appeals and the service of notice. The petitioner, a private limited company, filed returns for assessment years 2001-02 to 2004-05. The Joint Commissioner rejected the appeals filed by the petitioner citing delay based on the proviso to sub-section (2) of Section 20 of the Karnataka Sales Tax Act, 1957. The petitioner contended that the notice issued on 15.3.2007 was not served on them as their assets, including the manufacturing unit, were under the control of the Karnataka State Financial Corporation until 15.3.2010. The petitioner argued that they were unaware of the notice until the assets were released, and thus, there was no delay in filing the appeals.

The court considered the submissions of both parties and examined the timeline of events. It noted that the assets were released to the petitioner only on 15.3.2010, and the appeals were filed promptly after the petitioner became aware of the assessment orders. The court observed that since there was no actual service of notice on the petitioner due to the assets being with the KSFC, the date to reckon for filing the appeals should start from when the assets were released. The court emphasized that the dismissal of the appeals based on delay was erroneous, leading to the quashing of the impugned order and remanding the matter to the Joint Commissioner for reconsideration on merits and in accordance with the law.

Furthermore, the court highlighted the provision under the proviso to sub-section (2) of Section 20, allowing the admission of appeals filed after 30 days from the notice of assessment if sufficient cause is shown. In this case, the court found that the delay was justified given the circumstances of the petitioner's lack of awareness due to the control of their assets by the KSFC. As a result, the court directed the petitioner to appear before the Joint Commissioner without requiring a separate notice, emphasizing a fair consideration of the case on its merits. Ultimately, the writ petitions were disposed of in favor of the petitioner, setting aside the dismissal based on delay and ensuring a fresh assessment of the case by the concerned authority.