2022 (2) TMI 1451 - HC - VAT and Sales Tax

Challenge to reassessment order - order passed by the enforcement authority and the audit authority u/s 39 (1) of the KVAT Act, is biased against the petitioner or not - sufficient opportunity to the petitioner to produce the books of accounts or not - books of accounts seized from the other premises can be relied on in concluding the assessment order or not - when the selling dealer has already discharged the taxes, the tax can be levied on the same turnover in the hands of the petitioner? - dismissal of appeal without analyzing additional documents produced by the appellant before it. Bias raised by the petitioner - HELD THAT - The order passed by the Assistant Commissioner of Commercial Taxes neither can be termed as an order passed in haste on account of bias nor an ex parte order denying the opportunity of hearing - Having repeatedly appeared before the authority, the petitioner has sought several adjournments and sufficient indulgence is shown by the authority by granting adjournments. After having suffered the final order from the said authority, the petitioner has filed the first appeal. Said appeal is dismissed and it was questioned before the Tribunal. In these two statutory appeals, a plea of bias is not raised - the contention of bias is rejected. Non-consideration of additional documents produced before the appellate authority - HELD THAT - The appellate authority in the impugned order dated 16.11.2012 has referred to the additional grounds raised on 04.09.2012. However, there is no reference to the additional documents produced in the appeal except listing them while narrating the contentions of the appellant. The appellate authority in the said order has not passed any orders on the additional documents. Since S. 62 (6-A) of the Act prohibits remand of the case. Thus if additional documents are produced before the appellate authority in appeal under S. 62 of the Act, the authority is bound to pass the orders on the prayer to consider additional documents under S. 62 (6-A) - If additional evidence is produced at the instance of the party, the appellate authority under the Act is required to consider the prayer for the production of documents and pass orders on the said prayer either rejecting the same or allowing the same. In either case, it must be supported by reasons. If production is allowed said additional evidence is required to be considered while deciding the correctness of the order impugned. However, the first appellate authority has not carried out this mandatory exercise. The appellate authority s order does not give the impression that the additional documents received due consideration by the appellate authority. Under these circumstances, this Court is of the opinion that the appellate authority erred in exercising the jurisdiction vested in it under Section 62 more particularly S. 62 (6-A ) of the Act 2003. The matter is remitted back to the Joint Commissioner of Commercial Taxes (Appeals) Belagavi Division, Belagavi to consider the appeals afresh by taking an appropriate decision on additional documents produced along with the appeals, in accordance with law, within six months from the date of this order.

Issues Involved:
1. Bias in the reassessment order.
2. Sufficient opportunity to produce books of accounts.
3. Reliance on seized books of accounts from other premises.
4. Double taxation on the same turnover.
5. Consideration of additional documents by the appellate authority.

Issue-wise Detailed Analysis:

1. Bias in the Reassessment Order:
The petitioner contended that the reassessment order was biased as the same officer who seized the books of account also passed the reassessment order. The court analyzed Section 39(1) and Section 24(2) of the Karnataka Value Added Tax Act, 2003 (KVAT Act), which authorize the Commissioner to delegate reassessment powers to a competent officer. The court concluded that there is no statutory prohibition against the officer who conducted the inspection from passing the reassessment order, provided he is authorized under the Act. The court found no merit in the bias contention as the petitioner failed to provide definite evidence of bias. The plea of bias was also raised for the first time in the revision petition, which the court found inappropriate.

2. Sufficient Opportunity to Produce Books of Accounts:
The petitioner argued that the reassessment orders dated 14.07.2011 and 15.07.2011 were passed without affording sufficient opportunity for hearing. The court reviewed the records and found that the petitioner was granted multiple adjournments to produce the necessary documents. The Assistant Commissioner of Commercial Taxes had granted one week to produce the documents after rejecting a four-week adjournment request. The court concluded that the petitioner was given sufficient opportunity, and the contention of insufficient opportunity was rejected.

3. Reliance on Seized Books of Accounts from Other Premises:
The petitioner claimed that the books of accounts seized from the factory manager's room, which they argued was not part of their premises, should not have been relied upon. The court did not find this argument persuasive and upheld the reliance on the seized documents for reassessment.

4. Double Taxation on the Same Turnover:
The petitioner contended that the tax had already been discharged by the selling dealer, and thus, the tax should not be levied again on the same turnover. However, the court did not address this issue in detail as it was not substantiated during the proceedings.

5. Consideration of Additional Documents by the Appellate Authority:
The petitioner argued that the appellate authority failed to consider additional documents produced during the appeal. The court referred to Section 62(6-A) of the KVAT Act, which mandates the appellate authority to consider additional evidence if necessary. The court found that the appellate authority had not given due consideration to the additional documents and failed to pass orders on the prayer for their production. Consequently, the court set aside the orders of both the first appellate authority and the Tribunal, remitting the matter back to the Joint Commissioner of Commercial Taxes (Appeals) for fresh consideration of the appeals, including the additional documents.

Conclusion:
The court allowed the revision petitions in part, setting aside the orders of the Karnataka Appellate Tribunal and the first appellate authority. The matter was remitted back to the Joint Commissioner of Commercial Taxes (Appeals) for fresh consideration, specifically instructing the authority to take an appropriate decision on the additional documents produced by the petitioner. The court directed that this process be completed within six months from the date of the order. No costs were ordered.

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