Karnataka High Court

M/S Dubai Bazar vs The Assistant Commissioner on 4 October, 2024

Author: M.Nagaprasanna

Bench: M.Nagaprasanna

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                                                                  NC: 2024:KHC-D:14837
                                                             WP No. 105851 of 2024




                            IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
                                 DATED THIS THE 4TH DAY OF OCTOBER, 2024
                                                  BEFORE
                                THE HON'BLE MR. JUSTICE M.NAGAPRASANNA
                                WRIT PETITION NO. 105851 OF 2024 (T-RES)
                       BETWEEN:
                       M/S. DUBAI BAZAR,
                       A PROPRIETORSHIP CONCERN,
                       BHASHA COMPLEX, GREEN STREET,
                       KARWAR-581301.
                       (REPRESENTED BY ITS PRO: IBRAHIM SHAIKH,
                       AGED 49 YEARS)
                                                                           ...PETITIONER
                       (BY SRI. K.M. SHIVAYOGISWAMY AND
                       SRI. VEERESH S. GADAD, ADVOCATES)

                       AND:
                       1. THE ASSISTANT COMMISSIONER
                          OF COMMERCIAL TAXES,
                          (AUDIT)-NEW KHB COLONY,
                          HARI OM CIRCLE, HABBUWADA,
                          KARWAR-581306.

                       2.   THE JOINT COMMISSIONER OF
                            COMMERCIAL TAXES, (APPEALS),
                            DHARWAD DIVISION, COMMERCIAL TAXES BHAVANA,
                            NAVANAGAR, HUBLI-580025.

YASHAVANT
                       3.   THE COMMISSIONER OF COMMERCIAL TAXES
NARAYANKAR                  IN KARNATAKA,
Digitally signed by
                            COMMERCIAL TAXES BUILDINGS,
YASHAVANT
NARAYANKAR
Location: High Court
                            GANDHI NAGAR, BANGALORE-560009.
of Karnataka Dharwad
Date: 2024.10.07
10:14:58 +0530
                                                                        ...RESPONDENTS
                       (BY SRI. V.S. KALASURMATH, HCGP)

                             THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF
                       THE CONSTITUTION OF INDIA PRAYING TO ISSUE WRIT OF CERTIORARI
                       OR DIRECTIONS IN THE NATURE OF CERTIORARI TO QUASH THE
                       IMPUGNED     REASSESSMENT     ORDER   PASSED   BY   THE   FIRST
                       RESPONDENT IN RELATION TO THE ASSESSMENT PERIOD 2010-11
                       BEARING CASE ORDER NO.279028069 DATED. 24.03.2017 VIDE
                       ANNEXURE-A; ISSUE WRIT OF CERTIORARI OR DIRECTIONS IN THE
                       NATURE OF CERTIORARI TO QUASH THE IMPUGNED APPELLATE ORDER
                       PASSED BY THE 2ND RESPONDENT IN RELATION TO THE ASSESSMENT
                       PERIOD 2010-11 BEARING APPEAL NO. APL/VAT-03/2023-24 DATED
                       28.05.2024 VIDE ANNEXURE-C AND ETC.
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                                                NC: 2024:KHC-D:14837
                                             WP No. 105851 of 2024




     THIS PETITION, COMING ON FOR ORDERS, THIS DAY, THE
COURT MADE THE FOLLOWING:

CORAM:      THE HON'BLE MR. JUSTICE M.NAGAPRASANNA

                           ORAL ORDER

(PER: THE HON'BLE MR. JUSTICE M.NAGAPRASANNA)

The petitioner is before this Court seeking the following prayer.

"a) Issue Writ of Certiorari or directions in the nature of Certiorari to quash the impugned reassessment order passed by the first respondent in relation to the assessment period 2010-11 bearing CAS order No 279028069 dated 20.03.2017 vide Annexure 'A'.

b) Issue Writ of Certiorari or directions in the nature of Certiorari to quash the impugned appellate order passed by the 2nd respondent in relation to the assessment period 2010- 11 bearing Appeal No. APL/VAT-03/2023-24 dated 28.05.2024 vide Annexure-C.

c) Issue such other order or directions as deemed fit in the circumstances of the case."

2. The petitioner is assessed to Karnataka Value Added Tax

and bears a TIN no.29340581049. The bone of contention in the case

at hand is non production of books of accounts for the assessment

period of 2010-11. The proceedings are instituted by the Assistant

Commissioner under Section 39 read with Section 72(2) of the

Karnataka Value Added Tax Act, 2003. The notice results in passage

of an order disallowing the input credit that the petitioner had sought

for the year 2010, on the score that the books of accounts of the

assessment period 2010-11 were not produced, despite issuance of

notice.

NC: 2024:KHC-D:14837

3. The order reads as follows:

"PROCEEDINGS U/S 39 READ WITH SECTION 72(2) & 36 OF THE KVAT ACT, 2003

M/s. Dubai Bazar, Bhasha Complex, Green Street, Karwar- 581301 is a registered dealer under KVAT Act, 2003 borne on the files of L.V.O.-365, Karwar bearing TIN: 29340581049. In pursuance of the assignment issued by Commissioner of Commercial Taxes, Karnataka, Bangalore vide assignment no:

190586349 Dated 12-12-2016, the comprehensive audit is taken up for re-assessment under KVAT Act, 2003 for the FY. 2010-11. Accordingly, a notice in VAT Form-275 was issued on the dealer calling for the books of accounts for the F.Y. 2010-11 and the same could not get served as the dealer has closed his business and his whereabouts are not known.

The order has claimed input credit of Rs.456438=00 in the month of October 2010. The same is disallowed in the absence of books of account related to the local purchase made that are eligible for claiming input credit.

The Total tax payable along with interest and penalty is Rs.912462=00.

Intimate the order accordingly.

Sd/-

Assistant Commissioner of Commercial Taxes, Tax (Audit), Karwar."

4. The petitioner claims to be unaware of the said order.

The said submission stands to reason for the fact petitioner comes to

know of the order so passed quoted supra, when the JMFC initiated

recovery proceedings against the petitioner. The petitioner then

approaches the Appellate Authority, the Joint Commissioner of

Commercial Taxes. The appeal comes to be dismissed by recording

the following reasons.

"In the instant case the respondent after providing sufficient time of 7 years to produce books of accounts and

NC: 2024:KHC-D:14837

documentary evidence towards input credit of 4,56,438/- for October 2010 and after best judgment assessment on taxable value declared from October to December 2010 and from January to march 2011, levied 13.5% tax on total taxable valug of Rs.30,74,092/ the total tax levied is Rs 4,15,003/- with consequential interest U/s 36 at Rs.4,58,958/- and penalty U/s 72(2) @ 10% Rs.41,501/- all together Rs.9,12,462/-is found to be in order. Because even after service of call notice, proposition notice and re- assessment order dtd: 24-03-2017, the appellant failed to respond. Only on 14-08-2023 the appellant approached the respondent seeking certified copies and after that only after lapse of more than 6 years, preferred appeal.

The facts of the case and grounds urged by the appellant were examined with reference to the provisions of act and rules, I have perused the connected records and the grounds of appeals and states that, in absence of non- submission of the appeal application within the period of stipulated time for filing of appeal, there is no reason to examine to all in this case. The appeal proceedings cannot be taken up on merits, when the appeal is filed during the period beyond the limitation prescribed under the Act. There are no ambient of facts or the circumstances. The appeal filed by the appellant is on 19-10-2023 which is beyond the stipulated period of 30 days and beyond the condonable period of 180 days. Under circumstances, the point which arises consideration is.

"Whether the appeal is barred by limitation for being filed beyond 30 days and beyond the condonable period of 180 days under the KVAT Act, 2003.

The answer to the point is in affirmative for the following reasons.

1. The appellant is the proprietorship concern registered under KVAT Act with TIN No. 29340581049 and trader in electronics goods and home appliances.

2. Due to non-production of books of accounts by the appellant the respondent passed the ex-parte order rejecting the ITC claim by the appellant and issued Form

NC: 2024:KHC-D:14837

Vat 180 levying tax of Rs.4,15,003/-penalty Rs.41,504/- and interest Rs.4,55,958/- totally Rs.9,12,462/-. The order and demand notice in Form VAT-180 were served to the appellant on 30-03-2017.

3. As per the request letter dtd 14-08-2023 seeking certified copies of re-assessment order and demand notice, the respondent issued the same on 14-08-2023.

4. After receipt of certified copies, the appellant filed an appeal in Form VAT-430 online on 19-10-2023 vide appeal No 03. On perusal of the respondent records, it is noticed a/s 39 of KVAT Act was passed on 24-03-2017 and same was served to the appellant on 30-03-2017.

5. On further perusal of the records revealed that re-

assessment U/s 39 was passed on 24.03.2017 and the appeal was preferred by the appellant on 19-10-2023. Thus the appeal was preferred almost after 6 years 5 months from the date of re-assessment order which is beyond the stipulated period of 30 days and beyond the condonable period of 180 days.

6. Section 62(2)(a) of KVAT Act provides that an appeal can be preferred within a period of 30 days from the date of the order, while section 62(3) of the Act stipulates that the Appellate Authority if satisfied that the Appellant was prevented by sufficient cause from presenting the appeal within the period of thirty days, allow it to be presented within a further period of one hundred and eighty days.

7. Thus, the total period during which the appeal ought have been preferred was 30 days from the period from 01-04-2017 to 30-04-2017 - 30 days and further period of one hundred and eighty days i.e., from 01-05-2017 to 27-10-2017. But the appeal is filed on 19-10-2023.

Therefore I do not find any illegality in the action of respondent by passing order U/s 39 of KVAT Act, dated:

24.03.2017 for the tax period under appeal.

Hence, the following order.

ORDER

The appeal is dismissed as barred by limitation.".

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5. The appeal is dismissed solely on the score that the

appeal is preferred beyond period of limitation i.e., 180 days of the

passage of the order by the Assistant Commissioner quoted supra.

6. As submitted by learned counsel appearing for the

petitioner, the Assistant Commissioner himself has recorded that no

notice was served upon the petitioner. If that be so, the original

order is passed without hearing the petitioner, and is in violation of

principles of natural justice. In that light, the petitioner preferring an

appeal after six years cannot be pointed against him, for the reason

that original order was an ex parte order.

7. Therefore, on the sole ground that the original order

passed by Assistant Commissioner was without hearing the

petitioner, as it was an ex parte order, I deem it appropriate to set

aside the order and remit the matter back to the hands of the

Assistant Commissioner. The Assistant Commissioner to dispose of

the proceeding within a time frame. For the aforesaid reasons the

following:

ORDER

i. The writ petition is allowed.

ii. The impugned re-assessment order dated 24.03.2017 passed by respondent no.1 at Annexure-A and order

NC: 2024:KHC-D:14837

dated 28.05.2024 passed by respondent no.2 at Annexure-C are hereby quashed.

iii. Matter is remitted back to the hands of respondent no.1 - The Assistant Commissioner of Commercial Taxes (Audit), Karwar, to hear the petitioner and pass necessary orders.

iv. The petitioner shall appear before the Assistant Commissioner of Commercial Taxes on 28.10.2024 and participate in the proceedings.

v. It is open to respondent no.1 to regulate as procedure and pass necessary orders in accordance with law. The respondent no.1 shall pass necessary orders on merit of the matter without reference to delay.