2018 (2) TMI 371 - HC - VAT and Sales Tax

Validity of order of the Joint Commissioner of Commercial Taxes (Appeals) - time limitation - Held that - the contention that was put forth on behalf of the petitioner in the appeal before the Tribunal was that the first appellate authority though had the occasion to verify the books of accounts, had not done so and had modified the liabilities based on assumptions. If that be the position, the books of accounts being available, is required to be noticed and the petitioner would have the opportunity in the first appeal, where it has been remanded, to put forth all contentions with regard to the determination of the taxable turn-over based on the liability, as ordered by the Tribunal - Tribunal, in fact, has remanded the matter to the first appellate authority for consideration.

Summary

Issues:
Challenge to Tribunal's order on limitation in sales tax appeal.

Analysis:
The petitioner challenged the order of the Tribunal remanding the matter to the first appellate authority for fresh disposal regarding taxable turnovers. The petitioner contended that the Tribunal should have kept open all questions, including limitation, for subsequent consideration. The Government Advocate argued that the Tribunal correctly rejected the limitation contention, citing specific retrospective amendments to the Karnataka Value Added Tax Act. The Advocate also referenced a previous judgment by a Single Judge of the High Court upholding the retrospective effect of the amendments, allowing re-assessment within eight years. The High Court reviewed the Tribunal's order and the Single Judge's decision, finding that the Tribunal's decision on limitation was justified based on the retrospective effect of the amendments.

The petitioner further argued that re-assessment requiring the production of books was not justified as there was no statutory obligation to retain the books under Section 32 of the KVAT Act. However, the High Court noted that the petitioner's original contention before the Tribunal was that the first appellate authority had not verified the books of accounts and had based modifications on assumptions. Therefore, the availability of books of accounts was crucial for the petitioner to present contentions during the first appeal process. The High Court found no reason to interfere with the Tribunal's decision to remand the matter to the first appellate authority for further consideration, as it provided the petitioner with an opportunity to address all issues related to determining taxable turnover based on the liabilities as ordered by the Tribunal.

In conclusion, the High Court disposed of the petition accordingly, upholding the Tribunal's decision and allowing the matter to proceed to the first appellate authority for further consideration.