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2019 (5) TMI 118 - HC - VAT and Sales TaxValidity of assessment order - KVAT ACT - Principles of natural justice - HELD THAT - It is not in dispute that the writ jurisdiction cannot be invoked in a routine manner. However, considering the request made by the petitioner for a week s time to produce the documents being rejected on the ground of time barred case necessarily calls for interference by this court. Assessee cannot be made to suffer with a high pitched assessment unless the reasonable opportunity is provided to substantiate the claim made by the assessee. It is noticed that the petitioner has deposited a sum of ₹ 1,00,00,000/- (Rupees One Crore only) before the authority in terms of the order passed by this court on 09.05.2017 and in such circumstances, this court deems it appropriate to set aside the impugned assessment order as well as demand notice at Annexure-D and to restore the proceedings to the file of the respondent No.1- prescribed authority to redo the assessment after providing reasonable opportunity of hearing to the petitioner - Petition disposed off.
Issues:
Challenge to reassessment order under Karnataka Value Added Tax Act, 2003 for tax periods April 2010 to March 2011 based on principles of natural justice and jurisdiction. Analysis: The petitioner, a Private Limited Company providing Network and IT Infrastructure Solutions, challenged the reassessment order dated 11.04.2017 by respondent No.1 under Section 39(1) of the Act for the tax periods April 2010 to March 2011. The petitioner contended that the order violated principles of natural justice as it did not provide adequate opportunity to submit necessary documents. The prescribed authority had issued multiple notices and the petitioner had responded, seeking additional time to furnish required information. However, the reassessment order was passed without considering the petitioner's submissions. The petitioner argued that the prescribed authority's rejection of additional time was unjustifiable given the seven-year period for assessment under the Act. The petitioner's business operations across ten states necessitated proper opportunity to comply with the prescribed authority's requests for information. The petitioner's claim of non-vatable turnover and services provided in other states was disregarded in the reassessment, leading to a challenge based on principles of natural justice and jurisdiction. The petitioner emphasized the need for a fair assessment process considering the nature and scope of its business activities. The respondent, represented by the Additional Government Advocate, defended the reassessment order, stating that the petitioner failed to substantiate its claims despite being given sufficient opportunities. Allegations of material facts suppression related to E-Sugam were raised against the petitioner. The respondent argued against the court's intervention under Article 226 and 227 of the Constitution of India, citing a precedent involving similar issues. Upon considering the arguments from both parties and examining the record, the court found that the prescribed authority had indeed provided opportunities for the petitioner to respond to the notices. However, the court noted that the petitioner's request for additional time was unreasonably denied, affecting the assessment process. The court referred to legal precedents emphasizing the application of natural justice principles based on the specific circumstances of each case. In its final decision, the court set aside the reassessment order and demand notice, directing the proceedings to be returned to the prescribed authority for reassessment. The petitioner was instructed to deposit a specified sum before the assessing authority within a given timeframe. The court outlined a detailed process for the reassessment proceedings, emphasizing the need for a fair and expedited resolution while upholding the principles of natural justice. The judgment concluded by disposing of the writ petitions with the provided directions and observations, ensuring a balanced approach to the reassessment process under the Karnataka Value Added Tax Act, 2003.
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