IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF JULY, 2019 BEFORE THE HON’BLE MRS.JUSTICE S.SUJATHA WRIT PETITION NO.48369 OF 2017 AND WRIT PETITION NO.51231 OF 2017(T-RES) BETWEEN:
M/s.G.G.Tronics India Pvt. Ltd., Plot No.10, 6th Main, 3rd Phase, Peenya Industrial Area, Bengaluru – 560058.
(A Private Limited Company incorporated under The Companies Act, 1956 and represented by its Authorised Signatory) ... Petitioner (By Sri.Jeevan.J.Neeralgi, Advocate) AND :
1. The Assistant Commissioner of Commercial Taxes, 1st Floor, 1st Block, KIADB Building, Peenya 2nd Stage, LVO-075 Bengaluru – 560058.
2. The State of Karnataka, Represented herein by the Principal Secretary – Finance Department, Government of Karnataka, Vidhana Soudha, Bengaluru – 560001.
… Respondents (By Sri.T.K.Vedamurthy, AGA) These Writ Petitions filed under Articles 226 and 227 of the Constitution of India, praying to declare that Section 10(3) of the KVAT Act envisages computation of a dealer’s net tax liability by deducting the input tax paid on its purchases from its output tax liability, irrespective of the month in which the selling dealer raises invoices, as has already been held by this Hon’ble Court and that, therefore, the impugned order dated 29.06.2017 (Annex-F & G), passed by the R-1 under Section 10(5) and 20 of the Karnataka Value Added Tax Act, 2003, for the tax periods April 2013 to March 2014 and April 2014 to March 2015 is ex facie illegal and unsustainable.
These Writ Petitions coming on for Preliminary Hearing, this day, the Court made the following:
O R D E R The petitioner has challenged the order dated 29.06.2017 passed by the respondent No.1 under Sections 10(5) and 20 Karnataka Value Added Tax Act, 2003 (‘KVAT Act’ for short) relating to tax period April 2013 to March 2014 and April 2014 to March 2015.
2. The petitioner is a registered dealer under the provisions of the KVAT Act. It is the contention of the petitioner that during the tax periods in question, the petitioner has claimed the Input Tax Credit in terms of Section 10(3) of the Act. The same was rejected by the assessing officer placing reliance on the order of this Court in the case of State of Karnataka Vs. M/s. Centum Industries Private Ltd., reported in 2014 (80) KAR.L.J. 65.
3. Learned counsel appearing for the petitioner placing reliance on the order of this Court in the case of M/s Sonal Apparels Pvt. Ltd., Vs. State of Karnataka, reported in 2016 [85] KLJ 1, submitted that the authorities are required to allow the Input Tax Credit in terms of the said order.
4. Learned counsel for the Revenue does not dispute the legal position in as much as the Input Tax Credit under Section 10(3) of the Act is concerned. It is submitted that the order of this Court in M/s Sonal Apparels Pvt. Ltd., supra has been challenged and the same is pending before the Division Bench, but no interim order of stay is in operation.
5. In view of the aforesaid, it is evident that the order impugned rejecting the Input Tax Credit claimed by the petitioner for not disclosing it in the invoice relating to a particular month is unjustifiable in view of the direction of this Court in Sonal apparels, supra. Considering the same, the order impugned is liable to be set aside. Accordingly, the impugned orders at Annexures ‘F’ and ‘G’ passed by the respondent No.1 are quashed and the proceedings are restored to the file of the respondent No.1 to re-consider the claim of the petitioner regarding the input tax credit in accordance with the decision of this Court in Sonal apparel referred to supra but the same shall be subject to result of the W.A.No.3176/2016 [State of Karnataka Vs. Sonal Apparels Pvt. Ltd.].
Sd/- JUDGE ag