2015 (9) TMI 729 - HC - VAT and Sales Tax

Revision of Order Imposition of penalty, tax and interest Respondent - Authority visited premises of appellant - Society and seized certain books of accounts Respondent issued notice, invoking Section 64(1) of Karnataka Value Added Tax Act, 2003and called upon appellant to file objections Appellant did not avail of this opportunity and based on records, 1st respondent - Authority passed impugned order imposing tax, penalty and interest Held that - notice categorically stated that if appellant failed to file objections to said notice, 1st respondent proposed to revise orders of Authority In considered view, Section 64(1) gives 1st respondent - Authority with ample power to modify assessment or cancel assessment or direct fresh assessment thus, appeals do not merit consideration Ends of justice will met if opportunity is granted to appellant on payment of partial amount Decided against Appellant.

Summary

Issues:
1. Challenge to order passed by Revisional Authority under KVAT Act
2. Legality of the revision order dated 04.08.2014
3. Opportunity given to the appellant by the 1st respondent
4. Power of the 1st respondent to revise the order and impose penalty
5. Lack of substantial questions of law
6. Request for an opportunity by the appellant

Analysis:

1. The appellant contested the order dated 04.08.2014 passed by the Revisional Authority under the Karnataka Value Added Tax Act, 2003. The case originated from the seizure of certain books of accounts during a visit to the appellant's premises, leading to an ex parte assessment order on 22.08.2009 for reassessing tax under Section 39(1) of the KVAT Act for the year 2008-09.

2. Subsequently, the appellant appealed to the First Appellate Authority, which partially allowed the appeal on 31.08.2010, redetermining the liability and exempting sales related to sowing seeds. The 1st respondent issued a notice on 01.07.2014, invoking Section 64(1) of the Act, alleging illegality in the previous orders and calling for objections by a specified date. Failure to appear led to the 1st respondent passing an order imposing tax, penalty, and interest, which the appellant contested through substantial questions of law.

3. During the proceedings, the appellant argued that no proper opportunity was provided, questioned the 1st respondent's authority to reassess and levy penalties, while the AGA supported the impugned order. The court examined the notice issued by the 1st respondent, concluding that ample power was vested in the 1st respondent under Section 64(1) to modify, cancel, or direct fresh assessments.

4. The court found no substantial questions of law warranting further consideration, but the appellant requested another chance to appear before the Revisional Authority. Despite acknowledging the appellant's default, the court allowed the appeal, setting aside the impugned orders and directing the 1st respondent to rehear the case and issue fresh orders in compliance with the law.

5. As a result, the court disposed of the appeals by granting the appellant an opportunity to present their case before the 1st respondent, subject to depositing a specified sum in the court registry. The judgment aimed to uphold the principles of natural justice while ensuring compliance with legal procedures under the KVAT Act.