2019 (2) TMI 1161 - HC - VAT and Sales Tax

Validity of re-assessment order - recovery proceedings - KVAT Act - It is the contention of the petitioner that no reasonable opportunity was provided to the petitioner, before passing the re-assessment order impugned herein - principles of natural justice - Held that - It is apparent that the petitioner was duly served with the notice by Muddam on 20.11.2017. As there was no response, an endorsement dated 22.02.2018 was issued and the same was duly served on the assessee by Muddam on 23.02.2018. Despite the same, the petitioner has not responded to the proposition notice dated 10.10.2017. Hence, it cannot be held that no reasonable opportunity was provided to the petitioner, before passing of the re-assessment order on 12.03.2018 - Writ Petition is liable to be dismissed with liberty to the petitioner to file statutory appeal before the appellate authority in accordance with law.

Summary

Issues:
Challenge to re-assessment order and demand notice under Karnataka Value Added Tax Act, 2003 for Assessment Period 2011-12; Lack of reasonable opportunity provided to the petitioner before passing the re-assessment order; Jurisdiction of writ petition in circumventing statutory remedy.

Analysis:
The petitioner contested the re-assessment order and demand notice issued by the respondent under the Karnataka Value Added Tax Act, 2003 for the Assessment Period 2011-12, seeking to restrain the recovery proceedings. The petitioner, a Proprietorship concern involved in manufacturing Machinery tools and registered as a dealer under the Act, claimed that no reasonable opportunity was granted before the impugned re-assessment order was passed.

Upon review of the available evidence, it was established that the petitioner was served with a notice on 20.11.2017, followed by an endorsement on 22.02.2018, which was served on the assessee on 23.02.2018. Despite these notifications, the petitioner failed to respond to the proposition notice dated 10.10.2017. Consequently, the court determined that a reasonable opportunity was indeed provided to the petitioner before the re-assessment order was issued on 12.03.2018.

The court emphasized that the Act offers a comprehensive mechanism to challenge re-assessment orders, including provisions for seeking stay on recovery proceedings through the appellate authority. Therefore, resorting to writ jurisdiction to bypass the statutory remedies provided by the Act was deemed inappropriate. Consequently, the Writ Petition was deemed unsustainable and dismissed, with the petitioner granted the liberty to pursue a statutory appeal before the appellate authority as per the law.

Furthermore, the court directed that if the petitioner chooses to file an appeal within four weeks from receiving the certified copy of the order, the appellate authority should consider the appeal on its merits without raising objections on the grounds of limitation. This decision underscores the importance of adhering to the statutory procedures and exhaustively utilizing the avenues provided under the law before seeking extraordinary remedies like writ jurisdiction.