2015 (12) TMI 1679 - HC - VAT and Sales Tax

Natural justice - impugned order passed by the respondent without affording reasonable opportunity of producing C declaration forms and the common order passed for all the 12 monthly returns - violation of Section 35(1) of the KVAT Act, 2003 and Rule 37 of the KVAT Rules, 2005 - Held that - since the petitioner has not been given an opportunity of producing C declaration forms, the petitioner shall be given an opportunity to produce the same before the assessment orders are passed - petition allowed by way of remand.

Summary

Issues:
1. Challenge to impugned order for not affording reasonable opportunity to produce 'C' declaration forms.
2. Violation of Section 35(1) of the Karnataka Value Added Tax Act, 2003 and Rule 37 of the Karnataka Value Added Tax Rules, 2005 by passing a single assessment order for 12 monthly returns.
3. Requirement of monthly assessment orders as per the law.

Analysis:

Issue 1: The petitioner challenges the impugned order for not providing a reasonable opportunity to produce 'C' declaration forms. The petitioner contends that this lack of opportunity is in violation of their rights under the applicable tax laws. The court acknowledges this grievance and directs that the petitioner be given a chance to produce the necessary forms before any assessment orders are finalized.

Issue 2: The petitioner raises the issue of the violation of Section 35(1) of the Karnataka Value Added Tax Act, 2003 and Rule 37 of the Karnataka Value Added Tax Rules, 2005. These provisions mandate that the tax period for the KVAT Act is a calendar month, and hence, assessment orders should be passed on a monthly basis. The court notes that clubbing together returns and passing a single assessment order is irregular under the law. Consequently, the impugned order is deemed invalid, and the respondent is directed to issue fresh assessment orders on a monthly basis in compliance with the legal requirements.

Issue 3: The court emphasizes the necessity of adhering to the legal provision requiring monthly assessment orders. It clarifies that the tax period being a calendar month, assessment orders should correspondingly be issued on a monthly basis. In light of this, the court sets aside the previous order and instructs the respondent to proceed with fresh assessment orders on a monthly basis. Additionally, the petitioner is granted the opportunity to present the 'C' declaration forms before the new assessment orders are finalized, ensuring procedural fairness and compliance with the law.

In conclusion, the court rules in favor of the petitioner on all issues raised, directing the respondent to reevaluate the assessment orders on a monthly basis and allowing the petitioner the opportunity to submit the necessary documentation. The impugned order is invalidated, and the petitioner is instructed to appear before the Assessing Authority on a specified date without further notice.