IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF JANUARY, 2019 BEFORE:
THE HON’BLE MRS. JUSTICE S.SUJATHA WRIT PETITION No.49492/2018 (T – RES) BETWEEN:
M/s PHILIPS INDIA LTD., SURVEY NO.126, NIDAGATTA VILLAGE, JADAGENAHALLI HOBLI, HOSKOTE TALUK, BANGALORE-562 114 REP. BY PRABHAKAR DUTTA, DIRECTOR – FINANCE. ... PETITIONER AND:
[BY SRI G.SHIVADASS, SENIOR COUNSEL FOR SMT.SONAL SINGH, ADV.] 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 COMMERCIAL TAX OFFICER (AUDIT)5.3, 6TH FLOOR, "A" BLOCK, VTK-2, RAJENDRA NAGAR, 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 IMPUGNED ORDER DATED 28.04.2018 AT ANNEXURE-A1 AND THE IMPUGNED ENDORSEMENT DATED 03.10.2018 ISSUED BY R-3 AT ANNEXURE-A2.
THIS PETITION COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:-
O R D E R The petitioner has assailed the Assessment Order passed under Section 9[2] of Central Sales Tax Act, 1956 ['CST Act' for short] read with Section 39[1], 36[1] & 72[2] of the Karnataka Value Added Tax Act, 2003 ['KVAT Act' for short] relating to the tax periods April 2012 to March 2013 as well as the endorsement No.CTO[AUDIT]-5.3/No./2018-19 dated 03.10.2018 issued by the respondent No.3, interalia, seeking a direction to the respondent No.3 to initiate denovo re-assessment proceedings for the impugned period by considering the details and documents furnished by the petitioner and pass a well-reasoned order.
2. The petitioner is a public limited company, registered as a dealer under the provisions of the CST Act and the KVAT Act, engaged in trading of electronic/electrical goods as well as medical diagnostic equipments.
3. It is the contention of the petitioner that re- assessment proceedings under the KVAT Act and CST Act have been concluded for the periods 2006-07, 2007- 08, 2008-09 and 2009-10. For the periods 2007-08 to 2009-10, the claim of exemption made by the petitioner has been accepted by the respondent-Department and the re-assessment has been completed without creating any additional demand relating to sales in the course of import. However, for the period 2006-07, the petitioner’s claim of exemption under Section 5[2] as sought, was disallowed and demand was created. On challenge made by the petitioner to the said re-assessment order, before the First Appellate Authority and further before the Karnataka Appellate Tribunal ['KAT’ for short], the same came to be remanded back to the Assessing Authority for want of proper findings on facts and documents, despite the First Appellate Authority giving a generic finding while confirming the re-assessment order after noting the documents.
4. It is the contention of the petitioner that total 150 transactions of sale in the course of import were made by the petitioner for the assessment year 2012-13 to various Hospitals, Nursing Homes and Diagnostic Centres and individual Radiologists, against the sales order with document number and date. However, the Assessing Officer failed to correlate all these documents individually and has given generic finding while disallowing the claim made by the petitioner in respect of sales in the course of import.
5. Learned Senior Counsel Sri.G.Shivadass, appearing for the petitioner would submit that it is in order to avoid the scenario of remand from the higher Appellate Forums, which has been suffered by the assessee relating to the assessment year 2006-07, the petitioner filed the rectification application under Section 69 of the KVAT Act seeking rectification of the reassessment order before the Assessing Officer to examine each individual transactions before fixing the liability of additional tax by rejecting the claim of the assessee. The Assessing Officer rejected the said application by the impugned endorsement without assigning any valid reasons. It is argued that non- examination of individual transactions would amount to mistake apparent from the record and as such, the Assessing Officer was bound to allow the rectification application in order to examine the individual transactions. Non-consideration of the same has resulted in failure of justice.
6. Learned Additional Government Advocate Sri. T.K. Vedamurthy, appearing for the revenue justifying the order and endorsement impugned would submit that each assessment year is different and distinct. Any order passed by the KAT relating to the assessment year 2006-07 would not have an effect in the present proceedings. Assessing Officer, on analyzing the documents, has passed the assessment order. Re-examining of the documents as requisitioned by the assessee would partake the character of review by the Assessing Officer, which is not permissible under law. Hence, seeks for dismissal of the writ petition.
7. Having heard the learned counsel appearing for the parties and perusing the material on record, it is apt to refer to the relevant provisions of Section 69 of the KVAT Act and the same is quoted hereunder for ready reference:-
“69. Rectification of mistakes.- (1) With a view to rectifying any mistake apparent from the record, the prescribed authority, appellate authority or revising authority, may, at any time within five years from the date of an order passed by it, amend such order.
(2) Any amendment which has the effect of enhancing an assessment or otherwise increasing the liability of the person concerned shall not be made unless the prescribed authority, appellate authority or revising authority, as the case may be, has given notice to the person concerned of its intention to do so and has allowed the person concerned the opportunity of showing cause in writing against such amendment.
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8. As could be seen, it is only an apprehension of the petitioner that the assessment order passed by the KAT relating to the assessment year 2006-07 would be repeated for the assessment year 2012-13. It is trite law that Section 69 of the KVAT Act can be invoked only with a view to rectify any mistake apparent from the record. The phrase ‘mistake apparent from the record’ cannot be enlarged to re-examine/re-analyze/re-visit the concluded issues based on the factual aspects, which were before the authority at the time of passing of the assessment order. The scope of the rectification of mistakes is limited. The request of the assessee to re-examine the individual transaction would not come within the ambit of error apparent on the face of the record. It is the subjective perception of the assessee. Direction issued by the KAT relating to the assessment year 2006-07 stands on a different footing and the same cannot be considered to be applicable to the present proceedings also. A complete mechanism is provided under the Act to examine the correctness of the order of the Assessing Officer. Ordinarily, the Assessing Officer becomes functus-officio on passing of the assessment order and it is only in the circumstances provided under the provisions of Section 69 of the KVAT Act, rectification of mistake can be carried out.
9. The arguments advanced by the learned counsel for the petitioner appears to be imaginary, inasmuch as the examination of documents by the First Appellate Authority would not be appreciated by the higher forums. The First Appellate Authority has the co-extensive jurisdiction of the Assessing Authority in as much as examination of the documents as now requested by the petitioner. Hence, in the circumstances, no ground is made out by the petitioner to interfere with the order and endorsement impugned.
10. Accordingly, writ petition stands dismissed with liberty to the petitioner to file a statutory appeal in accordance with law against the order impugned. If such an appeal is filed within a period of two weeks from the date of receipt of the certified copy of this order, the same shall be considered by the First Appellate Authority on merits of the case without raising any objections regarding the aspect of limitation.
NC/PMR Sd/- JUDGE