IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3RD DAY OF DECEMBER, 2019 BEFORE:
THE HON’BLE MRS. JUSTICE S.SUJATHA WRIT PETITION No.44783/2019 (T – RES) BETWEEN:
KUMAR ENGINEERS REDDY BUILDING, OPP. ROYAL APARTMENT, SIDDAHALLI ROAD, NAGASANDRA POST, BANGALORE-560 072 AND PERMANENTLY R/AT 12-8-294, HUNTER ROAD, WARANGAL TELANGANA STATE REP BY ITS PROP: UDAY KSHIRSAGAR AGED 48 YEARS. …PETITIONER (BY SRI K.M.SHIVAYOGISWAMY, ADV.) AND:
1 . COMMISSIONER OF COMMERCIAL TAXES IN KARNATAKA COMMERCIAL TAXES BUILDINGS GANDHINAGAR, BANGALORE-560 009.
2 . THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT), 6.8, DGSTO-6, NO.488, KIADB BUILDING, 3RD FLOOR, 14TH CROSS, 4TH PHASE, PEENYA 2ND STAGE, BANGALORE-560 047.
3 . THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (ENF) SOUTH ZONE, 3RD FLOOR, B BLOCK, VTK-2, KORAMANGALA, BANGALORE-560 047. …RESPONDENTS (BY SRI T.K.VEDAMURTHY, AGA.) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE EX-PARTE REASSESSMENT ORDERS AND THE CONSEQUENTIAL DEMAND NOTICES FOR THE PERIOD 2013-14 PASSED BY THE R-1 BOTH DATED 02.04.2019 AND 08.04.2019 VIDE ANNEXURE-N AND O RESPECTIVELY.
THIS PETITION COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:-
O R D E R Learned Additional Government Advocate accepts notice for the respondents.
2. The petitioner has assailed the re- assessment orders and the consequential demand notices issued by the respondent No.1 relating to the tax periods 2013-14.
3. The petitioner, a registered dealer under the provisions of Karnataka Value Added Tax Act, 2003 [‘Act’ for short] is engaged in the business of works contract. The re-assessments under Section 39[1] read with 36[1] and 72[2] of the Act has been concluded relating to the tax periods in question. Reply was given by the petitioner to the proposition notice stating that there was no turnover during April 2013 whereas the EFS (Electronic Filing System) data collected by the prescribed authority indeed disclosed the turnovers of the petitioner.
4. Learned counsel Sri.K.M.Shivayogiswamy appearing for the petitioner would submit that the tax consultant Sri.Janakiram Reddy has misused the password of the petitioner and has carried on the business in the name of the petitioner. The same was unearthed by the intelligence team of the Department during the inspection conducted on 14.06.2013 and the intelligence report dated 27.12.2013 depicts the same. Indeed, a complaint was lodged by the competent authority before the jurisdictional police and FIR has been drawn. The petitioner has also filed PCR No.1563/2019 before the competent Court against the said tax consultant and the same is pending consideration. In such circumstances, the prescribed authority ought not to have levied tax on the petitioner concluding ex parte assessment for not producing the books of accounts.
5. Learned Additional Government Advocate supports the orders impugned.
6. Having heard the learned counsel appearing for the respective parties and perusing the material on record, it is clear that the EFS Data collected from the prescribed authority discloses the turnover of the petitioner. The petitioner is banking upon the intelligence report to take shelter on the alleged misuse of the password by his tax consultant. Moreover, it is not in dispute that the PCR filed by the petitioner against the said tax consultant is pending adjudication. It is the inter se dispute between the petitioner and the tax consultant. The turnover of the petitioner available on EFS data, cannot be ignored. In view of the inter se dispute between the assessee and the tax consultant or merely on the complaint made by the department against the tax consultant, the Revenue should not suffer. Hence, the assessments concluded by the prescribed authority – respondent No.2 subjecting the petitioner to tax liability cannot be faulted with.
For the aforesaid reasons, the writ petition stands dismissed with liberty to the petitioner to file an appeal before the Appellate Authority, if so advised.
Sd/- JUDGE NC.