IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF DECEMBER, 2019 BEFORE:
THE HON’BLE MRS. JUSTICE S.SUJATHA WRIT PETITION No.52357/2019 (T – RES) BETWEEN:
M/s. PIDILITE INDUSTRIES LTD., 1ST FLOOR, UMIYA LANDMARK #10/7, LAVELLE ROAD BANGALORE-560001 [REP. BY BHAVESH JOSHI CHIEF-TAXATION]. …PETITIONER (BY SRI RAVI RAGHAVAN, ADV. A/W.
Ms. SONAL SINGH & Ms ANUSHA.B.M., ADVS.) AND:
1. STATE OF KARNATAKA THROUGH ITS PRINCIPAL SECRETARY FINANCE DEPARTMET VIDHANASOUDHA BANGALORE-560001.
2. THE COMMISSIONER OF COMMERCIAL TAXES “VANIJYATHERIGEKARYALAYA” GANDHINAGAR, BANGALORE-560009.
3. COMMERCIAL TAX OFFICER [AUDIT]-1.4 DGSTO-01, 3RD FLOOR, BMTC COMPLEX YESHWANTHPUR BENGALURU-560022. …RESPONDENTS (BY SRI T.K.VEDAMURTHY, AGA.) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE RE- ASSESSMENT ORDER DATED 29.11.2019 AND THE CONSEQUENTIAL DEMAND NOTICE AT ANNEXURE-A R/W ENDORSEMENT DATED 07.12.2019 AT ANNEXURE-A1 PASSED BY THE RESPONDENT No.3; AND ETC., 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 challenged the re-assessment order dated 29.11.2019 at Annexure-A along with the consequential demand notice as well as the endorsement dated 07.12.2019 at Annexure-A1 passed by the respondent No.3.
3. The petitioner is a public limited company engaged in the manufacture and trading of adhesives, water proofing materials, construction chemicals, dyes, chemicals, crayons, colour pencil pigment and textile auxiliary etc. The petitioner was a dealer registered under the provisions of the erstwhile Karnataka Value Added Tax Act, 2003 [‘Act’ for short]. The premises of the petitioner was inspected by the Enforcement Wing on 20.02.2017 pursuant to which the re-assessment proceedings were initiated under Section 39[1] of the Act relating to the tax periods April 2015 to March 2016, notice under Section 39[1] dated 28.10.2019 was issued.
4. It is contented that the said notice was served on the petitioner on 05.11.2019. Immediately on 06.11.2019, the petitioner along with its learned counsel visited the office of the Assessing Authority and sought time of three weeks to file objections and to produce the documents. On the assurance made by the Assessing Authority, that three weeks time would be granted for filing the objections to the proposals made in the notice dated 28.10.2019, the petitioner-company was collating the documents to make it available before the Assessing Authority on 29.11.2019, however, exparte re-assessment order was passed on 29.11.2019 without providing an opportunity of hearing to the petitioner. It is further submitted that rectification application was filed seeking rectification of the order in view of the decision taken by the Assessing Authority relating to the issues on hand in favour of the assessee, pertaining to the earlier tax periods April 2014 to March 2015. The same being rejected, the petitioner is before this Court.
5. It is apparent that the order of re- assessment impugned herein is an exparte assessment order. An affidavit is filed by the learned counsel appearing for the petitioner that on 06.11.2019, three weeks time was sought to file objections and to produce documents.
6. In the light of the aforesaid, this Court is of the considered opinion that before passing of the exparte assessment order, the petitioner ought to have been heard in the matter albeit no objections filed to the proposals made in the notice dated 28.10.2019.
7. In the circumstances, keeping in mind the principles of natural justice, this Court deems it appropriate to set aside the impugned exparte re-assessment order, rectification order and the demand notice and remand the matter to the respondent No.3 – Assessing Authority to re-do the assessment after providing an opportunity of hearing to the petitioner.
8. The petitioner shall appear before the respondent No.3 on 23.12.2019 without waiting for any notice and shall file objections along with documents. It is made clear that no further adjournment shall be sought by the petitioner. On considering such objections/reply to the proposition notice and verifying the documents/books of accounts, the Assessing Authority shall conclude the assessment in an expedite manner in any event not later than two weeks thereafter.
Writ petition stands disposed of in terms of the above.
Sd/- JUDGE NC.