2019 (2) TMI 377 - HC - VAT and Sales Tax

Validity of Suo-moto revisional proceedings - Section 22-A(1) of the Karnataka Sales Tax Act, 1957 - Form-C - impugned assessment order is an ex-parte order - principles of natural justice - Held that - It would suffice to note that revisional authority had disposed of the proceedings exparte and as such, an opportunity requires to be granted to petitioner and accordingly, matter requires to be re-adjudicated by the revisional authority, particularly in the background of disputed question of facts having been raised by the appellant before this Court with regard to C form, which in fact had been accepted by the first appellate authority also, though not by revisional authority. The matter deserves to be remitted back to the revisional authority namely, respondent herein - appeal allowed by way of remand.

Summary

Issues involved:
1. Validity of suo-moto revisional proceedings under Section 22-A of the Karnataka Sales Tax Act, 1957.
2. Assessment of tax by way of composition under Section 17(6) of the Act.
3. Interstate purchases of goods for use in execution of works contract.
4. Ex-parte assessment order and the right to be heard.
5. Service of notice by the revisional authority.
6. Remittal of the matter back to the revisional authority for fresh adjudication.

Analysis:
1. The judgment deals with an appeal against suo-moto revisional proceedings initiated under Section 22-A of the Karnataka Sales Tax Act, 1957. The appellant, a registered dealer engaged in civil works contracts, contested the assessment of tax by composition under Section 17(6) for the year 2001-02. The appellate authority recomputed the taxable turnover, excluding labor work, due to alleged contravention of Section 17(7) regarding interstate purchases for works contracts.

2. The ex-parte assessment order was challenged, citing lack of appearance before the revisional authority despite receipt of notice. The High Court emphasized the need for a proper opportunity to be granted to the appellant for presenting objections and examining factual issues. The appellant raised concerns about the service of notice to an incorrect address, highlighting the importance of due process in tax proceedings.

3. Consequently, the High Court set aside the impugned order and directed the matter to be re-adjudicated by the revisional authority. The judgment underscored the significance of considering all relevant material and disputed facts, especially regarding the 'C' form issue accepted by the appellate authority. The decision aimed to ensure a fair and thorough examination of the case by the revisional authority.

4. In conclusion, the appeal was partially allowed, the order was set aside, and the matter was remitted to the respondent for fresh adjudication related to the 2001-02 period. The petitioner was instructed to appear before the respondent without further notice, and the revision proceedings were to be conducted expeditiously within a specified timeframe, emphasizing the need for timely resolution without unnecessary adjournments.