2016 (4) TMI 618 - HC - VAT and Sales Tax

Period of limitation - Order passed by First Appellate Authority - Appellant submitted that the date for the purpose of exercise of the revisional power should be counted from the date of reassessment made by the assessing authority and not the First Appellate Authority - Held that - the respondent was fully conscious about the point of limitation taken by the appellant in response to the show cause notice. However, in the reasoning recorded by the respondent while passing the impugned order, there is no discussion whatsoever on the issue of limitation. Also the respondent is also unable to show any discussion dealing with the point of limitation, the only submission was that as per the principles of doctrine of merger, the limitation period should not operate as a bar to the revisional authority in exercise of the power. Hence, it was required for the respondent to examine and deal with the point of limitation which was expressly raised by the appellant. The aforesaid aspects of limitation, would be one of the vital aspects and it would completely change the basis of the order, in the event the point of limitation is accepted. - Matter remanded back

Summary

Issues involved:
1. Interpretation of limitation period in revisional proceedings under the Karnataka Value Added Tax Act, 2003.

Detailed analysis:
The judgment involved a case where the appellant was engaged in the business of designing, manufacturing, and selling UPVC windows/doors. The appellant challenged a re-assessment order passed by the Assessing Officer under the Karnataka Value Added Tax Act, 2003 (KVAT Act) for the tax period of 2007-2008. The First Appellate Authority allowed the appeal, granting a benefit of 25% towards labour charges. Subsequently, the respondent issued a notice under Section 64(1) of the KVAT Act for revisional proceedings. The appellant raised the issue of limitation, arguing that the revision proceedings initiated were time-barred as per the limitation period. The respondent, however, did not address this issue in the impugned order.

The appellant contended that the revisional power's exercise date should be counted from the reassessment by the assessing authority, not the First Appellate Authority. The High Court emphasized the importance of examining and addressing the point of limitation raised by the appellant. The Court noted that the issue of limitation was crucial and could significantly impact the order's basis if accepted. Therefore, the Court refrained from expressing any view on the merits of the limitation issue, as it had not been adequately examined.

The High Court set aside the impugned order and directed that the revision proceedings be restored to the file of the Additional Commissioner of Commercial Taxes for reconsideration. The Additional Commissioner was instructed to review the matter in light of the Court's observations, provide a hearing to the appellant, and pass an appropriate order within three months from the date of receiving the order. The Court ensured that the rights and contentions of both parties would remain open during the revisional proceedings. The appeals were allowed to this extent, and no costs were awarded in consideration of the circumstances.