High Court of Karnataka Hears Batch of Appeals Challenging Suo Motu Revision Orders Under KVAT Act. Appeals Raise Issues of Input Tax Credit Denial Based on Supplier's Registration Status, Limitation Period for Revision, and Mandatory Penalty Provisions.

(STA No.3/2023) Whether ITC rightly claimed by the Appellant can be denied to it under the KVAT Act solely on the basis of the supplier allegedly being de-registered and / or not remitting the tax admittedly paid to it by the Appellant; (STA No.3/2023) Whether the 1st Respondent is justified in placing reliance on the Hon’ble Supreme Court’s judgment in Ecom Gill since, even assuming but not admitting that the ratio of the said decision were to applicable to the instance case, there is no dispute whatsoever that the goods in question were delivered to the Appellant as categorically held by the JCCT, and thus in the light of this factual finding, the ITC can by no stretch of imagination be denied to the Appellant? (STA No.3/2023) Whether the 1st Respondent is thus justified in re-opening and revising the JCCT’s order under Section 64(1) of the KVAT Act on the incorrect premise that the said order was erroneous in so far as it is prejudicial to the interests of the Revenue although the jurisdictional requirements necessary to invoke the provisions of Section 64(1) of the KVAT Act are wholly absent in the instant case; (STA No.3/2023) The Respondents were justified in directing the levy of penalty and in levying penalty under Section 72(2) of the KVAT Act on the erroneous premise that the levy of penalty under the said provision is automatic and mandatory? (STA No.11/2022) Whether on facts and in the circumstances of the case, the respondent was justified in invoking powers of revision under section 64 of the KVAT Act to set aside the re- assessment order, in the absence of satisfying the twin conditions adumbrated by the Legislature? (STA No.12/2022) Whether on facts and in the circumstances of the case, the respondent was justified in invoking powers of revision under section 64 of the KVAT Act to set aside the re- assessment order, in the absence of satisfying the twin conditions adumbrated by the Legislature? (STA No.12/2022) Whether on the facts and in the circumstances of the case, whether the invoking of revision jurisdiction under section 64(3) is beyond the time limit prescribed under the Act? (STA No.12/2022) Whether the extension of time limit vide Removal of Difficulties Order (01/2020) in No.FD 27 CSL 2020 dated 17.04.2020 by the Respondent No.3 by an Executive Order is without jurisdiction in as much as the as the State Legislature itself had no power to amend the provisions of repealed KVAT Act, 2003? (STA No.12/2022) Whether on the facts and in the circumstances of the case, whether the disallowance of expenditure which is purely related to labour and service and addition of tax on URD purchases to output tax is sustainable, which was correctly allowed in the Re-assessment Order in CAS Order No.275307649 dated 22.12.2017 based on verification of books of accounts, vouchers and Returns filed? (STA Nos.2/2025 and 5/2025) Whether the revisional authority was right in computing the limitation from the date of the original order U/s 39 of the KVAT Act and in rejecting/dismissing the appeal on the ground of limitation. (STA Nos.2/2025 and 5/2025) Whether the revisional authority was right in coming to the opinion that the subject Endorsement merges with the order under Section 39 of the KVAT Act when rejecting the appeal on limitation. (STA Nos.2/2025 and 5/2025) Whether the revisional authority was right in initiating the proceedings under Section 64 of the KVAT Act after the repeal of the KVAT Act, w.e.f. 30/06/2017. (STA Nos.2/2025 and 5/2025) Whether the revisional authority was right in concluding that proceedings are not barred by limitation under Section 64(3)(c) of the KVAT Act. (STA Nos.2/2025 and 5/2025) Whether the revisional authority was right in passing the order after the substitution of Entry 54 of the VI Schedule to the Constitution of India. (STA No.7/2025) Whether the Additional Commissioner, after having issued notice on 08.01.2020 under Section 64(1) of the KVAT Act five years after the Rectification order putting the appellant on notice on a specific ground asserting an error resulting in prejudice to the Revenue's interest, could have exercised the jurisdiction to unsettle the order dated 28.02.2015 on another ground paving way

Whether ITC rightly claimed by the Appellant can be denied to it under the KVAT Act solely on the basis of the supplier allegedly being de-registered and / or not remitting the tax admittedly paid to it by the Appellant;

The assessees filed appeals under Section 66(1) of the KVAT Act before the High Court against orders of the Suo Motu Revisional Authority (Additional Commissioner) passed under Section 64(1) of the Act. The revisional authority had set aside or modified reassessment orders passed by subordinate authorities, leading to adverse findings such as denial of Input Tax Credit, levy of penalty, and disallowance of claims. The appeals involved multiple tax periods ranging from 2007-08 to 2016-17. The High Court admitted the appeals on the framed substantial questions of law.

• Karnataka Value Added Tax Act, 2003: 66(1), 64(1), 64(3), 39(1), 72(2), 36, 69(1)
• Companies Act, 1956:
• Indian Partnership Act, 1932:
• Constitution of India: Entry 54 of VI Schedule