2016 (6) TMI 861 - HC - VAT and Sales Tax

Refund - grant of refund merely accepting the returns without verifying the records and documents - Karnataka Value Added Tax, 2003 (KVAT) - sale of undivided share in land in flats sold - Held that - the Tribunal has clearly exceeded the jurisdiction in setting aside the order by the first appellate authority and further whether to sustain the proceedings of the assessing authority/PA was also not the subject matter of the appeal before the Tribunal but rather the subject matter of the appeal before the Tribunal was as to whether the petitioner-appellant was entitled to any relief or not. - Matter remanded back to tribunal.

Summary

Issues:
1. Revision proceedings initiated against acceptance of returns under Sec. 66A of Karnataka Value Added Tax Act, 2003.
2. Proceedings initiated by Additional Commissioner under Sec. 64(1) against orders of Joint Commissioner and assessing authority.
3. Appeal before first appellate authority regarding deductions in consideration received for sale of property.
4. Tribunal's dismissal of appeals and setting aside orders of first appellate authority.
5. Jurisdictional errors by the Tribunal in considering appeals.

Analysis:

1. The appellant, referred to as the assessee, contested the revision proceedings initiated against the acceptance of returns for specific tax periods. The Joint Commissioner reversed the decision of refund but accepted the returns, directing a demand for unpaid tax. Subsequently, the Additional Commissioner initiated proceedings against these orders, leading to notices for reassessment under Sec. 39(1) of the KVAT Act. The Deputy Commissioner issued demands without proper verification, leading to appeals before the first appellate authority.

2. The first appellate authority partially allowed the appeal, granting deductions for certain considerations received by the assessee. However, the Tribunal, in a subsequent appeal, not only dismissed the appeal but also set aside the first appellate authority's decision. The case involved Sales Tax Appeal Nos. 46 and 47 to 57/2014 against the orders of the Additional Commissioner and the Tribunal.

3. The Tribunal's judgment was challenged due to jurisdictional errors. The Tribunal failed to consider crucial aspects, such as the limited scope of the appeal restricted to relief not granted by the first appellate authority. It overlooked mandatory procedures under Sec. 39(1) of the KVAT Act and the right to be heard before passing assessment orders. The Tribunal's actions exceeded its jurisdiction by setting aside orders without proper examination.

4. The High Court found that the Tribunal had indeed exceeded its jurisdiction by setting aside orders and not limiting its scrutiny to the relief sought by the appellant. The Court emphasized the need for proper consideration of the appeal's scope and directed the Tribunal to reexamine the matter within three months, adhering to the judgment's observations.

5. Consequently, the High Court set aside the Tribunal's order and remanded the matter for a fresh examination based on the appeal's scope and the Court's directives. The Court also noted that the appellant withdrew some appeals based on the given directions, leading to the disposal of those appeals without further examination.