IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF JULY, 2019 BEFORE THE HON’BLE MRS.JUSTICE S.SUJATHA WRIT PETITION Nos.18140-18141 OF 2019(T-RES) BETWEEN:
M/s Adorfontech Limited No.486, B-1, 14th Cross, 3rd Main, 4th Phase, Peenya Industrial Area, Bengaluru-560 058, Represented by its Senior General Manager Sri Syed ShahenshaMohiuddin, Aged 57 years.
... Petitioner (By Sri. K.M.Shivayogiswamy, Advocate) AND :
1. The Deputy Commissioner of Commercial Taxes, Audit-6.5, DGSTO-06, 3rd Floor, KIADB Complex, ‘B’ Block, 14th Cross, IV Phase, II Stage, Peenya, Bengaluru-560 058.
2. The Commissioner of Commercial Taxes in Karnataka, Commercial Taxes Buildings, Gandhinagar, Bengaluru-560 009.
… Respondents (By Sri.T.K. Vedamurthy, AGA) These Writ Petitions filed under Articles 226 and 227 of the Constitution of India, praying to quash the impugned reassessment orders even dated 23.02.2019 and the consequential demand notices dated 23.02.2019 passed by the respondent No.1 under the provisions of KVAT Act in relation to the assessment periods 2013-2014 and 2014-2015 in the petitioner’s case vide Annexure-E, E- 1 and F, F-1 respectively.
These Writ Petitions are coming on for Preliminary Hearing in ‘B’ Group, this day, the Court made the following:
O R D E R The petitioner has challenged reassessment orders as well as the rectification orders passed by respondent No.1 relating to the tax periods 2013-14 and 2014-2015.
2. The petitioner is a Limited Company registered under the provisions of the Karnataka Value Added Tax Act, 2003 and also under Central Sales Tax Act, 1956.
3. Relating to the assessment period in question, reassessment proceedings were concluded by respondent No.1 subjecting the turnover relating to Welding Machine to tax at the rate of 14.5%.
4. The primary grievance of the petitioner is that despite the clarification dated 09.02.2016 issued by the Commissioner of Commercial Taxes, clarifying that the Welding Machine is classified under the Central Excise Tariff [HSN Code Head 8468] and is covered under Sl.No.12 of the Notification No.Fd 116 CSL 2006(8) dated 31.03.2006 and hence, liable to tax @ 5.5% with effect from 01.08.2012 and onwards, the assessing officer proceeded to levy tax at the rate of 14.5%. The rectification application filed by the assessee also came to be rejected. Hence, these writ petitions.
5. Heard the learned counsel for the parties and perused the materials on record.
6. It is not in dispute that the clarification of the Commissioner of Commercial Tax on 09.02.2016 clarifies that the Welding Machine is liable to tax at 5.5% with effect from 01.08.2012 and onwards. If that be the position, the assessing authority ought to have examined the same at least at the time of rectification proceedings. The rectification application came to be rejected on flimsy grounds.
7. Hence, matter requires reconsideration by the assessing authority on this ground alone. In the result, impugned orders at Annexures-E, E-1 and F, F-
1 are set aside and the proceedings are restored to the file of Assessing Authority-respondent No.1 to redo the re-assessment, keeping in mind the clarification dated 09.02.2016 issued by the Commissioner of Commercial Taxes insofar as the rate of tax leviable on the Welding Machine at 5.5% with effect from 01.08.2012 and onwards.
8. The rights and contentions of the parties are left open including the tax levied on interstate works contract.
The assessee shall appear before the assessing authority on 05.08.2019, without expecting any notice and shall take further orders.
Writ petitions stand disposed of in terms of the above.
Sd/- JUDGE ag