IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26TH DAY OF NOVEMBER, 2019 BEFORE:
THE HON’BLE MRS. JUSTICE S.SUJATHA WRIT PETITION No.51182/2019 (T – RES) BETWEEN:
M/s. SSPDL INTERSERVE PVT. LTD., No.117/6, THE RETRET TARABANAHALLI VILLAGE JALA HOBLI, BENGALURU-560064 REP. BY ITS MANAGING DIRECTOR SRI PRAKASH CHALLA AGED 64 YEARS. …PETITIONER (BY SRI K.M.SHIVAYOGISWAMY, ADV.) AND:
THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES [AUDIT & RECOVERY]-5.4 DVO-5, 6TH FLOOR, A BLOCK VTK-2, RAJENDRANAGARA KORAMANGALA BENGALURU-560047. …RESPONDENT (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 REASSESSMENT ORDER PASSED BY THE RESPONDENT AUTHORITY UNDER THE PROVISIONS OF THE KVAT ACT, IN RELATION TO THE ASSESSMENT PERIOD 2014-15 DATED 30.04.2019 AND THE CONSEQUENTIAL DEMAND NOTICE ISSUED THERETO DATED 30.04.2019 VIDE ANNEXURE-G AND H RESPECTIVELY, IN SO FAR IT RELATES TO DIS-ALLOWANCE OF INPUT TAX CREDIT; 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 respondent.
2. The petitioner has challenged the reassessment order passed by the respondent-Authority under the provisions of the Karnataka Value Added Tax Act, 2003 [‘Act’ for short] in relation to the tax periods, 2014-15 and the consequential demand notices thereto dated 30.04.2019 at Annexures-G and H respectively insofar as it relates to disallowance of input tax credit inter alia challenging the endorsement dated 23.09.2019 rejecting the application submitted by the petitioner seeking rectification of the re-assessment order.
3. The petitioner is a private limited company registered under the Companies Act, engaged in execution of civil works contract was registered as a dealer under the provisions of the Act and borne on the file of the LVO-115, Bangalore. The respondent-
Authority has concluded the reassessment proceedings under Section 39[1] of the Act. The rectification application filed by the petitioner is rejected.
4. It is the contention of the petitioner that input tax credit claimed by the petitioner has been denied by the respondent-Authority mainly on the ground that the selling dealer M/s. Total Scaffolding Technologies, TIN No.29431141223 was a de-registered dealer, has not filed monthly returns and discharged taxes with respect to input tax claimed by the assessee during the relevant tax periods.
5. Learned counsel Sri.Shivayogiswamy.K.M., appearing for the petitioner emphasizing on this finding of the respondent-Authority would submit that the selling dealer M/s. Total Scaffolding Technologies was a registered dealer during the relevant tax periods. Learned counsel inviting the attention of this Court to Annexure-L, the dealer search webpage maintained by the Government of Karnataka, Commercial Tax Department would submit that the said selling dealer was registered on 29.06.2013 and was de-registered on 10.08.2015. It was argued that the opinion of the respondent-Authority that mere submitting of the details of payment and procurement of tax invoices does not prove that the goods have suffered tax to claim the input tax credit is wholly unjustifiable. Reliance is placed on the copy of the tax invoice at Annexure-C and Bank Statement to substantiate his submissions that the tax payment was made by the purchasing dealer- assessee and the same has been established by submitting the bank statements. However, the prescribed authority has failed to appreciate the same in the right perspective.
6. Learned Additional Government Advocate justifying the impugned order would submit that there is no proof available on record to establish the payment of tax made by the petitioner. In such circumstances, more particularly, in the absence of selling dealer paying the collected tax, the petitioner is not entitled to claim any input tax credit.
7. Having heard the learned counsel for the respective parties and perusing the material on record, it is evident that the selling dealer M/s. Total Scaffolding Technologies was registered on 29.06.2013 and de-registered on 10.08.2015 i.e., during the tax periods in question, the said selling dealer was a registered dealer. It is well-settled that as long as the dealer is registered under the provisions of the Act, the transactions made by the purchasing dealer cannot be suspected. It is on the registration of the selling dealer, transaction has been effected and in such circumstances, the prescribed authority rejecting the claim of the input tax credit mainly on the ground that M/s. Total Scaffolding Technologies was a de-registered dealer during the relevant periods cannot be accepted. The petitioner placed certain documents on record to establish the factum of tax discharged by him through cheques qua the invoices. These aspects require to be examined by the prescribed authority while considering the claim of the petitioner regarding the input tax credit.
8. Hence, the reassessment order, demand notice and the endorsement at Annexure-G, H and M impugned are set aside and the proceedings are restored to the file of the respondent-prescribed Authority to reconsider the matter in accordance with law, considering the relevant documents placed on record. The petitioner shall appear before the prescribed authority on 16.12.2019 without waiting for any notice. The respondent-Authority shall conclude the reassessment proceedings in accordance with law, in an expedite manner.
Writ petition stands disposed in terms of the above.
Sd/- JUDGE NC.