2018 (9) TMI 1800 - HC - VAT and Sales Tax

Principles of natural justice - Rate of tax - Civil Works Contract of Ductile Iron Pipes (DI Pipes) - taxable at at 14.5% or not - Held that - Merely for the reason that the Assessing Authority has not specifically made it clear in the order impugned that the documents submitted by the petitioner are verified and a decision has been taken, it cannot be held that no documents furnished by the petitioner are considered - Indeed considering the RA bills and other documentary evidences placed by the petitioner detailed order has been passed. That being the factual position, there is no violation of the principles of natural justice to interfere at this stage in the writ petition proceedings with the order impugned herein - petition dismissed - decided against petitioner.

Summary

Issues:
Assailing order under Sections 69(1), 36(2), and 72(2) of Karnataka VAT Act for tax periods April 2014 to March 2015. Reconsideration of tax on Civil Works Contract of "Ductile Iron Pipes" at 14.5%. Compliance with court order by Assessing Authority. Tax liability on DI Pipes contract at 5.5%. Invocation of writ jurisdiction despite appealable order.

Analysis:
The petitioner challenged an order under Sections 69(1), 36(2), and 72(2) of the Karnataka Value Added Tax Act, 2003, related to tax periods from April 2014 to March 2015. This was a second round of litigation concerning the tax treatment of the Civil Works Contract involving "Ductile Iron Pipes" at 14.5%. The court had previously remitted the matter to the Assessing Authority for reconsideration based on the petitioner's documents. The petitioner contended that the Assessing Authority failed to comply with the court's earlier order, leading to a decision contrary to the court's directions.

The petitioner argued that the DI Pipes contract should be taxed at 5.5% based on specific provisions of the Act and a previous judgment. However, the court noted that writ jurisdiction should not be invoked when an appealable order exists, emphasizing the availability of alternative remedies under the Act. The court highlighted that tax liability in such contracts depends on factual aspects and agreements between parties, to be examined by the relevant authorities. The court found that the Assessing Authority had considered the documents submitted by the petitioner in reaching its decision, and there was no violation of natural justice principles.

Ultimately, the court dismissed the writ petition, allowing the petitioner to pursue appropriate proceedings as per the law. The judgment kept the rights and contentions of both parties open for further adjudication before the appropriate forum. The court granted the petitioner the opportunity to file an appeal within four weeks from the date of the order, ensuring that the appeal would be considered on its merits without objections to the limitation period.