2016 (7) TMI 789 - HC - VAT and Sales Tax

Jurisdiction of the appellate authority u/s 62 of the Karnataka VAT Act - principles of natural justice - Held that - Admittedly, the notice Ex.1 was given to the assessee on 1.4.2016 to which the assessee himself has filed objections vide Annexure C dated 29.4.2016, may be a detailed but a preliminary reply simultaneously asking for more time to file a more detailed reply. In fact, the re-assessment order indicates that the assessee company vide letter of 11.4.2016 had asked for four weeks time for filing detailed objections, but the Assessing Authority gave time only up to 25.4.2016 but till then, since the assessee did not file further objections, therefore, considering the objections dated 29.4.2016, the Assessing Authority passed the reassessment order on that very date on 29.4.2016 itself. Thus, the principles of natural justice cannot be said to have been grossly or totally violated or totally ignored in the present case so as to render the impugned order a nullity, as contended by the learned counsel. The assessee failed to file detailed reply before 25.4.2016 as directed by the Assessing Authority. - writ petition dismissed.

Summary

Issues:
Petitioner challenges reassessment order under Karnataka VAT Act, 2003 for breach of natural justice and jurisdiction of appellate authority.

Analysis:
1. The petitioner raised objections to the proposal notice and requested a personal hearing for additional evidence against the show cause notice proposing a VAT demand. The petitioner argued breach of natural justice and jurisdiction of the appellate authority under S.62 of the Karnataka VAT Act.

2. The petitioner contended that the Assessing Authority had no jurisdiction to pass an order raising a demand higher than proposed in the notice. Additionally, the prescribed deductions for labor charges were not considered in the taxable turnover computation in the reassessment order.

3. The respondent Department opposed the submissions citing the availability of an alternate remedy through appeal under S.62 of the Act. The provisions of S.62 outline the process for filing appeals, including timelines and requirements for payment of tax amounts.

4. The Court acknowledged that the impugned reassessment order was appealable before the Deputy Commissioner (Appeals) and the Karnataka Appellate Tribunal. The petitioner's grounds of attack, including natural justice and taxable turnover computation issues, could be raised in the appeal process.

5. The Court noted that the restriction on the appellate authority to remand the case back to the Assessing Authority did not entitle the petitioner to seek relief through Art.226 of the Constitution. The parameters for invoking writ jurisdiction were not met in this case.

6. The Court found that the principles of natural justice were not grossly violated as the petitioner failed to file a detailed reply within the given timeline. The petitioner could raise objections before the appellate authority, which had extensive powers to determine tax liability.

7. The Court concluded that the petitioner had an adequate alternate remedy available through the appeal process. Therefore, it declined to exercise extraordinary jurisdiction under Art.226 and dismissed the writ petitions without costs.