2016 (3) TMI 384 - HC - VAT and Sales Tax

Re-assessment based on clarafication - KVAT - applicability of the clarification to the respective assessment in question whether prospective or retrospective has not been considered. - in the clarification different products different rates were prescribed - Held that - all the lower Authority from the stage of the Assessing Authority till the Revisional Authority, have not examined the aforesaid aspect of applicability and the prospective effect or retrospective effect of the clarification and hence such being the peculiar circumstances, we find that remanding of the matter to the Assessing Authority would be more appropriate instead to the Revisional Authority. When vital aspects of the applicability of the clarification whether retrospectively or prospectively is not considered and the same is found to be sufficient by this Court for exercise of the discretion to remand the matter, the same as such it cannot be read that the Court has made any conclusive observation. Still, however, suffice it to observe that all rights and contentions of the parties before the Assessing Authority shall remain open. The impugned Order passed by the Assessing Authority and subsequent orders arising therefrom including that of the Revisional Authority are quashed and set aside with a further direction that the matters shall stand restored to the Assessing Authority for examining the matter in the light of the observations made by this Court in the present Judgment and in accordance with law. - Decided partly in favor of assesseee.

Summary

Issues:
Appeals against Order of Additional Commissioner of Commercial Taxes - Reassessment under KVAT Act and CST Act - Applicability of clarification - Prospective or retrospective effect - Remand to Assessing Authority.

Analysis:
The judgment involves appeals against an Order of the Additional Commissioner of Commercial Taxes regarding reassessment under the Karnataka Value Added Tax Act, 2003, and the Central Sales Tax Act, 1956. The Order of the Assessing Officer for the years 2008-09, 2009-10, 2010-11, and 2011-12 was maintained. The Assistant Commissioner of Commercial Taxes passed the re-assessment order, which was later modified by the Joint Commissioner of Commercial Taxes. The Commissioner, in suo motu revision, set aside the modification and restored the reassessment. The key issue was the applicability of a clarification issued on different rates for products. The court noted that the Authorities did not consider if the clarification was prospective or retrospective, citing a Supreme Court judgment on the matter.

The court observed that the failure to consider the prospective or retrospective effect of the clarification vitiated the lower authorities' decisions. It was deemed appropriate to remand the matter to the Assessing Authority for proper examination. The court highlighted that the lower authorities did not address the vital aspect of the clarification's applicability. The Assessing Authority was directed to consider the matter in light of the court's observations and in accordance with the law. The court emphasized that all rights and contentions of the parties before the Assessing Authority shall remain open. The Assessing Authority was instructed to provide an opportunity to the parties, hear them, and pass appropriate orders within two months from the date of receiving the certified copy of the judgment.

The court allowed the appeals to the extent of quashing the impugned orders and remanding the matter to the Assessing Authority. The judgment emphasized issuing a time-bound direction to the Assessing Authority due to the delay in the matter. Both parties were permitted to raise all contentions before the Assessing Authority, ensuring that all questions remained open for consideration. The judgment concluded by setting aside the orders and restoring the matters to the Assessing Authority for further examination and appropriate orders within a specified timeframe.