Case Note & Summary
The appellants, Nandi Infrastructure Corridor Enterprise Limited and others, filed writ appeals against an order dated 12.12.2014 passed by a learned single Judge in writ petitions. The writ petitions sought a writ of mandamus directing the State to issue notifications superseding a Government Order dated 7.12.2011 that exempted the appellants from tax under the Karnataka Value Added Tax Act, 2003 (KVAT Act). The appellants also challenged re-assessment orders for tax periods April 2005 to March 2009. The High Court allowed the appeals, holding that the Government Order granting exemption was valid and binding. The re-assessment orders were set aside and the matter remanded to the respondents for fresh consideration, directing them to consider the exemption notification and pass orders after hearing the appellants. The court emphasized that the exemption could not be ignored by the assessing authority.
Headnote
A) Tax Law - Exemption Notification - Binding Effect - Government Order FD.07.CET.09 dated 7.12.2011 - The Government Order exempting the whole of tax payable by the appellants under the Karnataka Value Added Tax Act, 2003 was held to be valid and binding on the assessing authority. The re-assessment orders passed without considering the exemption were set aside and remanded for fresh consideration. (Paras 1-10)
B) Tax Law - Re-assessment - Natural Justice - Sections 39, 72 of KVAT Act - The re-assessment orders were passed without affording proper opportunity to the appellants and without considering the exemption notification. The court directed the respondents to consider the exemption and pass fresh orders after hearing the appellants. (Paras 2-10)
Issue of Consideration
Whether the Government Order dated 7.12.2011 exempting the appellants from tax under the KVAT Act was valid and binding, and whether the re-assessment orders passed ignoring the said exemption were sustainable.
Final Decision
The writ appeals are allowed. The order dated 12.12.2014 passed by the learned single Judge in writ petition Nos.49399/2014 and 52259-52401/2014 is set aside. The re-assessment orders are quashed. The matter is remanded to the respondents to consider the exemption notification and pass fresh orders after hearing the appellants.
Law Points
- Tax exemption
- Government Order
- Re-assessment
- Writ of Mandamus
- Natural Justice
- Binding effect of exemption notification
Case Details
2015 LawText (KAR) (12) 22
Writ Appeal Nos.268 and 294-436 of 2015 (T-RES)
K.P. Kumar, Senior Counsel for Suryanarayana T, Advocate for appellants; K.M. Shivayogiswamy, Govt Adv for respondents
Nandi Infrastructure Corridor Enterprise Limited, Nandi Economic Corridor Enterprises Limited, Nandi Engineering Limited, M/S R Sree Ramulu Reddy & Co
The State of Karnataka, The Deputy Commissioner of Commercial Taxes (Audit) - 1.3, D.V.O-1, The Deputy Commissioner of Commercial Taxes (Internal Audit & Inspection)
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Nature of Litigation
Writ appeals against order of single Judge in writ petitions seeking mandamus and challenging re-assessment orders under KVAT Act.
Remedy Sought
Appellants sought to set aside the order of the learned single Judge and to direct the respondents to issue notifications superseding the Government Order dated 7.12.2011 and to set aside re-assessment orders.
Filing Reason
The appellants challenged the re-assessment orders for tax periods April 2005 to March 2009, which were passed ignoring the Government Order dated 7.12.2011 exempting them from tax under the KVAT Act.
Previous Decisions
The learned single Judge dismissed the writ petitions on 12.12.2014.
Issues
Whether the Government Order dated 7.12.2011 exempting the appellants from tax under the KVAT Act was valid and binding?
Whether the re-assessment orders passed ignoring the exemption were sustainable?
Submissions/Arguments
Appellants argued that the Government Order dated 7.12.2011 exempted them from tax and the re-assessment orders were passed without considering the same.
Respondents argued that the exemption was not applicable or that the re-assessment was valid.
Ratio Decidendi
The Government Order granting tax exemption under the KVAT Act is valid and binding on the assessing authority. Re-assessment orders passed without considering the exemption are unsustainable and must be set aside, with a direction to consider the exemption afresh.
Judgment Excerpts
In these appeals, the appellants are questioning the order dated 12.12.2014 passed by the learned single Judge in writ petition Nos.49399/2014 and 52259-52401/2014.
In the writ petitions, the appellants prayed for a writ of mandamus, directing the respondent No.1 to issue the Notifications superseding the Government Order FD.07.CET.09 dated 7.12.2011 exempting the whole of the tax payable by the first to third appellants and their sub-contractors under the provisions of the Karnataka Value Added Tax Act, 2003.
Procedural History
The appellants filed writ petitions before the High Court seeking a writ of mandamus and challenging re-assessment orders. The learned single Judge dismissed the writ petitions on 12.12.2014. The appellants then filed the present writ appeals under Section 4 of the Karnataka High Court Act. The appeals were heard and reserved for judgment on 15.10.2015, and judgment was pronounced on 16.12.2015.
Acts & Sections
- Karnataka Value Added Tax Act, 2003:
- Karnataka High Court Act: Section 4
