2022 (11) TMI 1497 - HC - VAT and Sales Tax

Rectification of the re-assessment order under Section 69 of the KVAT Act, 2003 - mistake apparent on the face of the record or not - deletion of said sub-section (2A) of Section 69 of the Act by Act No. 17 of 2012 with effect from 01.04.2012 - confirmation of the endorsements issued by the AA. Whether on such application for rectification of mistake filed by the assessee after 01.04.2012, the tribunal entertaining second appeal by the assessee could remand the entire case back to the Assessing Authority even though the assessee never filed a Regular Appeal under Section 62 of the Act against the impugned assessment order but had only filed an application for rectification of the mistake under Section 69 of the Act, after 01.04.2012? HELD THAT - The Second Appellate Authority could not have gone beyond the scope of the relief sought for in the rectification application. The Second Appellate Authority has arrived at a finding regarding discrepancies in the reassessment orders insofar as the suppressed turn-over for the month of September, 2006 and July, 2006. Firstly it must be noted that the same was never raised in the rectification application dated 04.08.2012 and obviously while deciding on point for consideration framed by it, it could not have gone beyond the grounds raised in the rectification application which point was considered by the First Appellate Authority. The Second Appellate Authority in exercise of power under Section 63 was only looking into the correctness or otherwise of the order passed under Section 62 and consideration being circumscribed within the above framework it could not have embarked upon its own finding contrary to grounds raised in the rectification application. Section 69 (2A) provided for deemed rectification if the application was not rejected by the assessing authority within 60 days. The omission of Section 69 (2A) does not take away the power of rectification available under Section 69 (1) and such power can be invoked by the authority once it is convinced that there is a mistake apparent. Accordingly, to hold that the assessee could not file an application seeking rectification invoking power under Section 69 after deletion of Section 69 (2A) may not arise - no new question of law can be framed in the present proceeding which falls outside the scope of an enquiry under Section 65. The revision petitions are allowed and the order of the Second Appellate Authority under Section 63 is set aside and the order of the First Appellate Authority in all these matters are affirmed.

Summary

Issues Involved:
1. Application for rectification of mistake under Section 69 of the Karnataka Value Added Tax Act, 2003 after deletion of sub-section (2A) by Act No. 17 of 2012.
2. Remand of the entire case by the Tribunal under Section 63 despite the assessee not filing a regular appeal under Section 62 of the Act.

Detailed Analysis:

1. Application for Rectification of Mistake under Section 69:
The primary issue was whether the respondent-assessee could file an application for rectification of mistake under Section 69 of the Karnataka Value Added Tax Act, 2003 after the deletion of sub-section (2A) by Act No. 17 of 2012 with effect from 01.04.2012. The court clarified that the omission of Section 69 (2A) does not remove the power of rectification available under Section 69 (1). Section 69 (2A) only provided for deemed rectification if the application was not rejected within 60 days, and its deletion does not affect the exercise of rectification power under Section 69 (1). Thus, the assessee could still file an application under Section 69 (1) after the deletion of Section 69 (2A).

2. Remand of the Case by the Tribunal:
The second issue was whether the Tribunal could remand the entire case back to the Assessing Authority even though the assessee had not filed a regular appeal under Section 62 but only an application for rectification under Section 69. The court noted that the scope of rectification proceedings is narrow and limited to correcting apparent errors on record. The First Appellate Authority had already determined that there was no apparent mistake on record, and thus, the Second Appellate Authority should have confined itself to reviewing the correctness of the rectification application rejection. The Tribunal's decision to remand the case was beyond its power, as it effectively reopened the reassessment order, which had attained finality. The court concluded that the Second Appellate Authority had wrongly decided to remand the case, as it went beyond the grounds raised in the rectification application.

Findings on Specific Contentions:
- The discrepancies noted by the Tribunal regarding the suppressed turnover were not raised in the rectification application and thus should not have been considered.
- The court emphasized that the rectification application filed by the assessee was beyond the permissible time limit, and the reassessment order had already attained finality.
- The court rejected the contention that the material seized belonged to another entity, M/s. Sony Agro Industries, noting that there is a presumption under Section 52 (5) that documents found on the business premises belong to the said business entity unless proven otherwise.

Conclusion:
The revision petitions were allowed, and the order of the Second Appellate Authority under Section 63 was set aside. The court affirmed the order of the First Appellate Authority, emphasizing that the scope of rectification is limited and does not extend to reopening final reassessment orders. The court also clarified that new questions of law cannot be framed in revision proceedings under Section 65, and the period of limitation prescribed under the statute cannot be extended by the courts.