Case Note & Summary
The appellant, M/s Cargotec India Private Limited, is an assessee under the Karnataka Value Added Tax Act, 2003 (KVAT Act). The dispute pertains to the payment of VAT on certain items not disclosed in its return for the assessment year 2010-2011 (April 2010 to March 2011). On 30 January 2015, the Deputy Commissioner of Commercial Taxes issued a reassessment notice under Section 39(1) read with Sections 72(2) and 36 of the KVAT Act, requiring the appellant to pay further tax on undisclosed items and to submit a reply within seven days. The appellant requested a 30-day extension on 6 February 2015, but did not submit a reply. An endorsement was issued on 5 March 2015 giving three days to reply, to which the appellant responded on 9 March 2015 requesting one more week. Still no reply was filed, and on 18 March 2015 the appellant sought another week. When no reply was submitted, respondent No.3 passed an order on 8 April 2015 imposing a tax liability of Rs.7,55,51,179/- plus a 10% penalty and interest, totaling Rs.14,27,48,346/-. Challenging this order, the appellant filed Writ Petitions No.21490/2015 and 21703-21713/2015, which were dismissed by the learned Single Judge on 19 May 2015 on the ground that the appellant had been given sufficient opportunity to submit its reply but failed to do so. The present appeals are against that dismissal. The court held that the reassessment order was not in violation of principles of natural justice as the appellant was given multiple opportunities and extensions. The appeals were dismissed.
Headnote
A) Taxation - Reassessment - Section 39(1) of Karnataka Value Added Tax Act, 2003 - Natural Justice - Assessee failed to submit reply despite multiple opportunities and extensions - Reassessment order passed after giving reasonable opportunity - Held that the order was not in violation of principles of natural justice (Paras 1-4).
Issue of Consideration
Whether the reassessment order passed under Section 39(1) of the KVAT Act without granting sufficient opportunity to the assessee to submit its reply is sustainable in law.
Final Decision
The appeals are dismissed. The order of the learned Single Judge dated 19.5.2015 is confirmed.
Law Points
- Reassessment under Section 39(1) KVAT Act
- Natural justice
- Opportunity of hearing
- Time extension
- Writ jurisdiction
Case Details
2015 LawText (KAR) (08) 22
WA Nos.1552 & 1571 - 81/2015 (T – RES)
Shivadass G for appellant; K M Shivayogiswamy for R1 to R3; M C Nagashree for R5; Jeevan J Neeralgi for R6
M/s Cargotec India Private Limited
State of Karnataka, The Commissioner of Commercial Taxes in Karnataka, Deputy Commissioner of Commercial Taxes (Audit)-6.4, VAT Division-6, The Manager, Standard Chartered Bank, Union of India, The Commissioner of Service Tax
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Nature of Litigation
Appeal against dismissal of writ petitions challenging reassessment order under KVAT Act.
Remedy Sought
Appellant sought to set aside the order of the learned Single Judge dismissing its writ petitions and to quash the reassessment order.
Filing Reason
Appellant was aggrieved by the reassessment order passed under Section 39(1) of KVAT Act imposing tax liability of Rs.14,27,48,346/- for non-disclosure of items in its return for 2010-2011.
Previous Decisions
The learned Single Judge dismissed the writ petitions on 19.5.2015 on the ground that the appellant had been given sufficient opportunity to submit its reply but failed to do so.
Issues
Whether the reassessment order under Section 39(1) of KVAT Act was passed in violation of principles of natural justice.
Whether the appellant was given sufficient opportunity to submit its reply before the reassessment order.
Submissions/Arguments
Appellant argued that it was not given sufficient opportunity to submit its reply and that the reassessment order was passed in violation of natural justice.
Respondents contended that the appellant was given multiple opportunities and extensions but failed to submit its reply, and thus the order was valid.
Ratio Decidendi
Where an assessee is given multiple opportunities and extensions to submit its reply to a reassessment notice but fails to do so, the reassessment order passed thereafter is not in violation of principles of natural justice.
Judgment Excerpts
The appellant is an assessee under the Karnataka Value Added Tax Act (for short ‘KVAT Act’).
On 30.1.2015, the Deputy Commissioner of Commercial Taxes issued a re-assessment notice under Section 39(1) of the KVAT Act, read with Sections 72(2) and 36 of the KVAT Act, for payment of further tax on items not disclosed by the appellant, and required the appellant to submit its reply to the said notice within seven days.
When reply was not submitted, an endorsement was issued on 5.3.2015 to submit its reply within three days, to which the appellant responded on 9.3.2015 requesting for one week more time.
Even then, when no reply was filed by the appellant, respondent No.3 passed an order on 8.4.2015 imposing tax liability of Rs.7,55,51,179/- plus penalty of 10% and interest, totaling to Rs.14,27,48,346/-.
Procedural History
On 30.1.2015, reassessment notice issued. Appellant requested extensions on 6.2.2015, 9.3.2015, and 18.3.2015. On 8.4.2015, reassessment order passed. Appellant filed writ petitions on 19.5.2015, which were dismissed by learned Single Judge. Present appeals filed against that dismissal.
Acts & Sections
- Karnataka Value Added Tax Act, 2003: Section 39(1), Section 72(2), Section 36
- Karnataka High Court Act: Section 4
