IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF APRIL, 2019 BEFORE:
THE HON’BLE MRS. JUSTICE S.SUJATHA WRIT PETITION No.15472/2019 (T– RES) BETWEEN:
M/S BASF INDIA LTD., (FORMERLY KNOWN AS BASF COATINGS (INDIA) PVT. LTD., BAJPE ROAD, BALA VILLAGE VIA KATIPALLA MANGALORE – 575030 REPRESENTED BY SRINIVASA PRASANNA MANAGING DIRECTOR.
... PETITIONER [BY SRI RAVI RAGHAVAN, ADV. A/W SRI. SONAL SINGH AND MAHWASH FATIMA, ADVS.,] AND:
1. STATE OF KARNATAKA THROUGH ITS PRINCIPAL SECRETARY FINANCE DEPARTMENT VIDHANA SOUDHA BANGALORE – 560 001.
2. THE COMMISSIONER OF COMMERCIAL TAXES “VANIJYA THERIGE KARYALAYA GANDHINAGAR, BANGALORE – 560 009.
3. THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES, (AUDIT)-2, VANIJYA TERIGE BHAVAN MAIDANA STREET MANGALORE – 575001.
…RESPONDENTS [BY SRI T.K. VEDAMURTHY, AGA] THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO DIRECT THE R-3 TO ABSTAIN FROM PROCEEDING WITH THE RECOVERY ACTION INITIATED PURSUANT TO THE REASSESSMENT ORDER DATED 07.02.2019 VIDE ANNEXURE – G DURING THE PENDENCY OF THE PETITIONER’S STAY APPLICATION BEFORE THE HON’BLE KAT IN APPEAL STA No.108/2019.
THIS PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:-
O R D E R Learned Additional Government Advocate accepts notice for the respondents.
The petitioner is before this Court seeking for a direction to respondent No.3 to abstain from proceeding with the recovery action initiated pursuant to the reassessment order dated 07.02.2019 during the pendency of the petitioner’s stay application before the Karnataka Appellate Tribunal in Appeal STA No.108/2019.
2. The petitioner is claiming to be a dealer registered under the provisions of the Karnataka Value Added Tax Act, 2003 (‘KVAT Act’) during the relevant tax periods 2010-11. It is the contention of the petitioner that an appeal has been preferred challenging the confirmation of reassessment order creating a huge demand and the same is pending consideration before the Tribunal. It is the grievance of the petitioner that despite the said factual aspects were brought to the notice of the recovery officer – respondent No.3, coercive recovery proceeding has been initiated giving notice to the Bank under Section 45 of the KVAT Act to recover the arrears of tax of Rs.5,88,30,274/-, by virtue of which the business of the petitioner has come to a stand still.
3. The learned counsel for the petitioner reiterating the grounds as aforesaid submitted that the demand made by the authorities in terms of the reassessment order is contrary to the material evidence available on record, indeed the Tribunal is required to consider the same. Hence, the action of the respondents – authorities to proceed with the coercive recovery proceedings during the pendency of the stay application is uncalled for.
4. The learned Additional Government Advocate appearing for the respondents – revenue justifying the impugned action would submit that the petitioner has no locus standi to maintain this writ petition before this Court circumventing the proceedings pending before the Karnataka Appellate Tribunal.
5. Having heard the learned counsel appearing for the respective parties, this Court is of the considered view that the ends of justice would be met in directing the respondents – authorities not to proceed with the coercive recovery proceedings until the decision is taken by the Karnataka Appellate Tribunal on the stay application pending consideration in STA No.108/2019.
6. The Karnataka Appellate Tribunal is directed to adjudicate upon the stay application in an expedite manner, in any event, not later than two weeks from the date of receipt of the certified copy of the order.
With the aforesaid observations and directions, the writ petition stands disposed of.
Sd/- JUDGE PMR