2016 (2) TMI 1275 - HC - VAT and Sales Tax

Validity of re-assessment order - duplication of proceedings - in spite of the factum of the earlier order of re-assessment having been passed by the first respondent, an order of re-assessment again being passed by the second respondent - principles of natural justice - HELD THAT - The entire proceedings initiated is a duplication of the earlier proceedings and since the order was already passed for the relevant period, the impugned order is illegal and is bad in law - Accordingly, the petition is allowed. Decided in favor of petitioner.

Summary

Issues:
1. Validity of the order of re-assessment passed by the second respondent under Section 9(2) of the CST Act read with Section 39(1) of the KVAT Act for the periods April 2009 to March 2010.
2. Allegation of violation of principles of natural justice and duplication of proceedings leading to an illegal order.

Analysis:
1. The petitioner, a Private Limited Company registered under the KVAT Act and the CST Act, was subjected to re-assessment by the first respondent for the periods from April 2007 to July 2009. Subsequently, the second respondent initiated re-assessment proceedings for the periods 2009-10, despite the earlier order passed by the first respondent. The petitioner objected, citing the earlier order and requesting to drop further proceedings. However, the second respondent proceeded to pass an order of re-assessment dated 30.01.2016, affirming previous proposals and levying interest. The petitioner challenged this order, alleging lack of jurisdiction and violation of natural justice.

2. The petitioner contended that the second respondent's order was a duplication of earlier proceedings, as the first respondent had already passed a re-assessment order for the relevant period. The petitioner argued that the second respondent's action was illegal, resulting in a miscarriage of justice and prejudicing their interests. On the other hand, the Government Advocate argued that the petitioner should have raised the issue earlier to prevent such an order. However, the court found the second respondent's order to be illegal and set it aside, emphasizing that the duplication of proceedings was evident, rendering the impugned order invalid. The court allowed the petition, highlighting the importance of avoiding redundant and unjust procedures in tax assessments.

In conclusion, the High Court of Karnataka, in a judgment delivered by Justice Anand Byrareddy, declared the re-assessment order passed by the second respondent for the periods April 2009 to March 2010 as illegal and set it aside. The court emphasized the significance of adhering to principles of natural justice and avoiding duplication of proceedings to ensure fairness and justice in tax assessments.