2015 (11) TMI 1221 - HC - VAT and Sales Tax

Refund claim - Bar of limitation - belated filing of return under KVAT - whether the Tribunal was justified in directing refund of input tax - Held that - Sub-section (4) of section 10 of the Act provides how the net tax to be paid or refunded, is to be calculated. It provides, the first condition to be fulfilled is a tax invoice or a debit note or credit note, in relation to a sale ought to have been issued in accordance with section 29. Secondly, the return is to be filed as provided under section 35(1), i.e., a return VAT 100 within 20 days or 15 days after the end of preceding month showing the input tax as well as the output tax and the credit which is claimed. However, if there are incorrect statement in the said return, an opportunity is given to such assessee to file a revised return in the prescribed form within a period of 6 months from the end of the relevant tax period, subject to the permission being granted by the prescribed authority. If return is not filed within the aforesaid time, then the question of calculating the refund would not arise. In the instant case, admittedly the returns for the period from April 2005 to February 2007 were filed only on January 16, 2010. In fact, the reason given for delay in filing such return was, the assessee was a heart patient and he could not file the return in time. The law do not provide for condonation of delay for any such reasons - Therefore the order passed by the Tribunal is contrary to the statutory provisions and cannot be sustained. - Decided in favour of Revenue.

Summary

Issues:
Challenge to order directing treating respondent as registered dealer and refunding input tax.

Analysis:
1. The case involved a challenge by the Revenue against an order of the Karnataka Appellate Tribunal directing the assessing authority to treat the respondent as a registered dealer for the tax period April 2005 to February 2007 and to refund the input tax. The respondent, engaged in retail sales of air-conditioners and other accessories, was initially treated as an unregistered dealer by the assessing authority, leading to penalty and interest levies. The Tribunal partially allowed the appeal, directing the refund of input tax but affirming penalty and interest. The Revenue contested this decision. The core issue was whether the Tribunal was justified in directing the refund of input tax.

2. The Revenue contended that since no returns were filed specifying input and output tax for the relevant period, the question of refunding input tax did not arise. The counsel argued that the Tribunal's decision contradicted section 10 of the Karnataka Value Added Tax Act, 2003. On the other hand, the respondent's counsel highlighted that the assessee was a registered dealer under the Karnataka Sales Tax Act, and there was no obligation to file certain forms under the new Act. The counsel argued that the authorities erred in treating the assessee as unregistered and supported the Tribunal's decision for the refund.

3. The court delved into the provisions of section 10 of the Act concerning output tax, input tax, and net tax calculations. It emphasized the mandatory requirements for claiming input tax refund, including the issuance of specified documents and timely filing of returns. Citing a previous case, the court reiterated that the statutory framework necessitated strict adherence to the prescribed procedures for claiming input tax refunds. The court concluded that the Tribunal's order directing the refund was contrary to statutory provisions and ruled in favor of the Revenue.

4. Consequently, the High Court allowed the revision petitions, setting aside the impugned order and restoring the decisions of the assessing authority and the first appellate authority. The judgment highlighted the importance of compliance with statutory provisions and procedural requirements for claiming input tax refunds under the Act.