1/6 R IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF JUNE, 2017 BEFORE THE HON’BLE DR JUSTICE VINEET KOTHARI Between WRIT PETITION NOs.26873-877/2017 & 27518-572/2017 (T-RES) M/s. Shakthi Specialities Represented by its Managing Partner Sri. R. Srinivasan Aged about 56 years No.155, Narayana Pillai Street St. John’s Church Road Bengaluru-560 001.
(By Mr. R. Venkatesh Prasad, Advocate) And 1. The State of Karnataka Represented by its Principal Secretary Finance Department Vidhana Soudha Bengaluru-560 001.
2. The Commissioner of Commercial Taxes in Karnataka Vanijya Therige Karyalaya 1st Main Road, Gandhinagar Bengaluru-560 009.
3. The Commercial Tax Officer (Audit – 1.2), D.V.O. -1, TTMC ... Petitioner BMTC Building, Yeshawanthpur Bengaluru-560 022.
4. The Joint Commissioner of Commercial Taxes (Appeals) – I Shanthinagar, Bengaluru-560 027.
(By Mr. T.K. Vedamurthy, AGA) **** ... Respondents These Writ Petitions are filed under Articles 226 and 227 of the Constitution of India, praying to declare the limitation prescribed under sub-Section (7)(b) of Section 63 of the Act, that if the Karnataka Appellate Tribunal does not dispose of the appeals within 365 days from the date of the stay order, the order of stay granted by it shall stand vacated and that the Karnataka Appellate Tribunal shall not make any further order staying proceedings of recovery of the other 70% of disputed tax and other amount, is arbitrary, unreasonable and unjust and therefore ultra vires of Articles 14 and 19(1)(g) of the Constitution of India (Annexure-D).
These Writ Petitions coming on for Preliminary Hearing this day, the Court made the following:
O R D E R Mr. R. Venkatesh Prasad, Advocate for Petitioner. Mr. T.K. Vedamurthy, AGA for Respondents.
1. The only grievance raised by the petitioner - Assessee in the present case is that though the Karnataka Appellate Tribunal under Karnataka Value Added Tax Act, 2003 (hereinafter referred to as the ‘KVAT Act, 2003’ for short), is seized of the pending appeal of the assessee on the issue involved about the rate of tax applicable to the petitioner’s products namely Whip Topping on Cakes etc., and the stay order was also granted by the said Tribunal on 30/03/2016, by virtue of the provisions of Section 63 (7)(b) of the KVAT Act, 2003, the life of the said stay order cannot extend beyond 365 days of its grant though despite their being a mandate of the law to that effect, the said Tribunal has not been able to dispose of the appeal itself on merits within the said stipulated period of said 365 days from the date of its institution.
2. The learned counsel for the Respondents, Mr. T.K. Vedamurthy has brought to the notice of the Court that similar petitions have been disposed of by this Court by directing the Appellate Tribunal to decide the appeal pending before it expeditiously and till the disposal of the appeal by the Tribunal, the interim order granted by the Tribunal has been extended by this Court.
3. It is unfortunate that in view of the limited power given to the Tribunal and not empowering it to extend its own stay order by the said legislative mandate, while the Tribunal finds itself unable to decide all the pending appeals within the stipulated time frame of one year and on account of this legislative lacunae despite there being good intention for the reasons beyond the control of Tribunal this Court is flooded with these kind of petitions unnecessarily.
4. The power to grant stay is an incidental power of the Appellate Authority and if the said Tribunal or Authority cannot dispose of the appeal on merits on account of the heavy work burden or otherwise, for no fault of assessee or the Appellate Tribunal, its stay order should not be allowed to lapse merely by lapse of time on account of such limited powers as are contained in Section 63(7)(b) of the KVAT Act, 2003. The control over administration efficiency of Tribunal Member is a different issue and the same cannot be a reason for making such provision in Law.
5. The State should immediately consider appropriate amendments to the said provisions of Section 63(7)(b) of the KVAT Act,2003 for making powers of the concerned Appellate Tribunal effective while dealing with the pending appeals before them so that no such unnecessary litigation is brought before this Court. State cannot deliberately generate a litigation for the Constitutional Courts.
6. Therefore, the present writ petitions are disposed of with a request to the Karnataka Appellate Tribunal who is seized of the appeal filed by the petitioner - assessee in Sales Tax Appeal No.352/2016 for the year 2006-07 to decide the same expeditiously preferably within six months from today and it is directed that till the disposal of the appeal by the Tribunal, the interim order granted by it on 30/03/2016 shall continue.
7. The copy of this order may be sent to the Law Secretary as well as the Chief Secretary of the Respondent - State to undertake the steps for suitable amendment in the law.
Sd/- JUDGE BMV*