2014 (9) TMI 695 - HC - VAT and Sales Tax

Karnataka Sales Tax Act, 1957 - Sections 13, 21 & 25A - rectification - period of limitation - Whether adjudication can be made on the ground of limitation when neither the assessee nor his counsel had appeared before the first Assessing Authority - Held that - petitioner has a remedy by way of an appeal under Section 22 of the Act. Be that as it may, counsel for the petitioner submitted that the impugned order has been passed without appreciating the objections raised by the petitioner on 7.3.2014. It is noted from the impugned order that on that day the petitioner s counsel appeared and had filed objections. But it was the petitioner who had sought for a personal hearing in the matter. After filing objections on 7.3.2014 neither the petitioner nor his counsel had appeared before the first respondent/Authority, but the impugned order has been assailed on various grounds including on the ground of limitation. - The petitioner or his representative to be heard personally and thereafter the first respondent to pass fresh orders in accordance with law - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Challenge to order under Section 21(2) of the Karnataka Sales Tax Act, 1957 and demand notice dated 20.5.2014.

Analysis:
1. The petitioner, a registered dealer, filed returns for the assessment year 2004-05 under the Act and the Central Sales Tax Act. The Deputy Commissioner accepted the returns but raised additional demand in a notice dated 17.7.2006. The petitioner sought rectification on 25.9.2006 under Section 25A of the Act, but no order was passed within four months, leading the petitioner to believe the demand was rectified.

2. Despite this, the petitioner received a notice on 27.6.2007 to pay the tax demanded in the previous notice. The petitioner explained the rectification request in a letter dated 7.7.2007. Subsequently, another notice was issued on 29.11.2007, which was challenged in a previous writ petition, leading to its dismissal by the court on 28.11.2008.

3. The first respondent then issued a notice on 19.3.2010, stating the deemed rectification was illegal and demanding additional taxes. Several notices and responses followed, with the petitioner seeking time for personal hearing and objections. The petitioner's failure to appear on scheduled dates led to the first respondent passing the impugned order on 21.4.2014, which the petitioner challenged as time-barred and beyond the limitation period.

4. The court noted that the petitioner had sought a personal hearing, but neither the petitioner nor the advocate appeared before the first respondent. The impugned order was quashed, and the petitioner was directed to appear before the first respondent without needing a fresh notice on 21.7.2014. The court emphasized the importance of the petitioner's presence for a fair hearing and directed the first respondent to pass fresh orders accordingly.

5. Consequently, the court quashed the order dated 21.4.2014 and kept the consequential demand notice in abeyance until the proceedings were disposed of by the first respondent. The writ petition was disposed of with these directions and observations, emphasizing the need for the petitioner's active participation in the proceedings for a just resolution.