2020 (7) TMI 289 - SCH - VAT and Sales Tax

Levy of cost of ₹ 50,000 on the petitioner / Deputy Commissioner - Passing a whimsical order against the assessee - The Single Judge observed that the petitioner had passed an order which is therefore nothing less than suffering from malice-in-facts as well as malice-in-law . - Validity of reassessment order - HELD THAT - The setting aside of the reassessment is not in question in the present proceedings nor is the direction imposing costs. The direction to recover costs from the petitioner and the observations against her are in question - there are no reasonable justification to hold that the petitioner had passed a whimsical order and that it suffered from malice in fact and in law. These observations were unnecessary for the adjudication of the merits of the dispute raised by the assessee. The conduct of the petitioner was not in question. The order of the learned Single Judge quashing the reassessment is not the subject matter of the present proceedings and nothing contained in this order shall amount to an expression of opinion on the correctness of that direction - SLP disposed off.

Summary

Issues Involved:
Challenge to reassessment order under Karnataka Value Added Tax Act 2003, imposition of costs on the petitioner, observations against the petitioner by Single Judge, appeal before Division Bench of Karnataka High Court, justification of observations made by the Single Judge, direction to recover costs from personal resources of the petitioner.

Analysis:
The Supreme Court addressed the challenge to an order of reassessment passed by the petitioner, a Deputy Commissioner of Commercial Taxes, under the Karnataka Value Added Tax Act 2003. The Single Judge of the High Court set aside the reassessment order but imposed costs of &8377; 50,000 on the petitioner, directing recovery from her personal resources. The Single Judge's observations characterized the petitioner's order as suffering from malice-in-fact and malice-in-law. The Division Bench upheld the Single Judge's decision. The Supreme Court noted that the reassessment's setting aside and the imposition of costs were not in question. However, the observations against the petitioner and the cost recovery direction were challenged.

The Supreme Court found that the Single Judge's observations regarding malice-in-fact and malice-in-law were unjustified and unnecessary for the case's merits. The Court emphasized that the petitioner's conduct was not under scrutiny, even if the assessing officer's order was erroneous. As a result, the Supreme Court expunged the Single Judge's observations against the petitioner and set aside the direction to recover costs from her personal resources. The Court clarified that its decision did not express an opinion on the correctness of the reassessment order's quashing by the Single Judge.

In conclusion, the Supreme Court disposed of the Special Leave Petition by directing the expunging of observations against the petitioner and setting aside the cost recovery direction. The Division Bench's confirmation of these aspects was declared inoperative against the petitioner. The Court's decision focused on rectifying the unjustified remarks and the improper cost recovery order, ensuring fairness and justice in the legal proceedings.