IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF JANUARY, 2019 PRESENT THE HON’BLE MRS.JUSTICE S. SUJATHA AND THE HON’BLE MR.JUSTICE B.A. PATIL REVIEW PETITION NOS.46/2018 & 68-114/2018 BETWEEN :
The State of Karnataka through the Commissioner of Commercial Taxes Vanijya Therige Karyalaya 1st Main Road, Gandhinagar Bangalore-560 009.
(By Sri Vikram Huilgol, HCGP) AND :
M/s. Jones Lang Lasalle Property Consultant India (P) Ltd., Level 4, Embassy Heights, No.13, Magrath Road Bangalore-560 023.
(By Sri R.V. Prasad, Advocate) … Petitioner … Respondent These Review Petitions are filed under Order XLVII Rule 1 r/w 114 of CPC, praying this Hon’ble Court to review the judgment dated 22.02.2016 passed by the Division Bench of this Hon’ble Court in STA Nos.2/2016 & 22-32/2016 c/w STA Nos.3/2016 & 55-65/2016, 4/2016 & 44-54/2016, 5/2016 and 33-43/2016; recall the same and allow these Review Petitions.
These Review Petitions coming on for orders this day, S.Sujatha, J., made the following:-
O R D E R These review petitions are filed by the State of Karnataka seeking review of the judgment passed by this Court in STA.No.2/2016 and allied matters, dated 22.2.2016.
2. Shorn of unnecessary facts, it would be suffice to state that the petitioner-State had moved before the Hon’ble Supreme Court challenging the correctness and legality of the judgment passed by this Court in STA.No.2/2016 and allied matters. The Hon’ble Apex Court was pleased to dispose of the Special Leave Petitions with certain observations. The same is extracted hereunder, for ready reference:-
“It is stated by the learned counsel for the petitioner that the provisions of Circular No.VAT/CR-31/2008-09 dated 7th July, 2008 relied upon by the High Court would have no application to the case in view of the provisions of Section 35(4) of the Karnataka Value Added Tax Act, 2003 as in the present case non- payment of tax was discovered pursuant to an inspection. We do not find the said point to have been dealt with by the High Court in the order under challenge. It will be, therefore, open for the petitioner to urge this point before the High Court by filing a review petition, if so advised.”
3. Pursuant to the order passed by the Hon’ble Apex Court, these review petitions are filed by the State primarily on the ground that this Court has failed to consider the express mandate of Section 35(4) of the Karnataka Value Added Tax Act, 2003 (‘Act’ for short) which states that no revised returns can be filed in case where short payment of tax was discovered pursuant to inspection. It is on the inspection conducted by the competent authorities, respondent has filed revised returns beyond the period of six months and claimed the inter tax credit. In such circumstances, the circular instructions issued by the Commissioner of Commercial Taxes, dated 07.07.2008 ought to have been interpreted considering the provisions of Section 35(4) of the Act. The same being pointed out before the Hon’ble Apex Court, the liberty is reserved to the petitioner-State to file a review petition before this Court.
4. Learned HCGP appearing for the petitioner-State placed reliance on the judgment of the Hon’ble Apex Court in the case of M.M.Thomas Vs. State of Kerala, reported in (2000)1 SCC 666 as well as the case of Municipal Corporation of Greater Mumbai & another Vs. Pratibha Industries Ltd. & others (Civil Appeal No.11822/2018, disposed of on 4.12.2018).
5. On the contrary, learned counsel appearing for the respondent submits that Section 66 of the Act contemplates that the provisions of sub-sections (6) to (12) of Section 65 of the Act shall apply in relation to appeals preferred under sub-section (1) as they apply in relation to petitions preferred under sub-section (1) of Section 65 of the Act. Section 65(10)(a) of the Act provides that the High Court may, on the application of either party to the petition, review any order passed by it under sub-section (6) of the Act on the basis of facts which were not before it when it passed the order. The basis of these review petitions being that pursuant to the inspection conducted by the competent authority, revised returns filed in contravention of Section 35(4) of the Act, was not considered by this Court while interpreting the circular instructions dated 07.07.2008. The facts now urged by the revenue were very much available before the Court at the time of passing of the judgment on 22.2.2016 and no new facts being now raised by the petitioner, the power of review cannot be invoked/enlarged dehors the provisions of Section 35(4) of the Act. Accordingly he seeks for dismissal of the review petitions.
6. We have carefully considered the rival submissions made by the learned counsel appearing for the parties and perused the material on record.
7. This Court while considering the appeals filed by the respondent has mainly considered two aspects of the matter as could be seen from paragraph-5 of the judgment, which reads thus:-
“5. There are mainly two aspects of the matter. One is the binding effect of the circular issued by the Commissioner dated 7.7.2008 and the interpretation thereof and the another is interpretation of the view taken by this Court in the decision which have been referred to as that of the learned Single Judge and of the Division Bench in the Order.”
8. In answering these two aspects, this Court observed at paragraph-15 as under:-
“15. If the matter is examined in the light of the aforesaid two aspects and the reasons recorded by the Revisional Authority are considered, we find that the order cannot be sustained in the eye of law. Broadly, there are two reasons. One is that the correct interpretation of the circular as observed by us hereinabove has not been made nor the Revisional Authority has properly considered the decisions of this Court even if the principles of law of binding nature of the precedent to be followed.”
9. Only on these two aspects of the matter, the decision of the revisional authority is held to be illegal and not appropriate. Accordingly, the order of the revisional authority was set aside and the proceedings were restored to the file of the revisional authority to decide the matter in the light of the observations made by this Court in the said appeal proceedings. The Hon’ble Apex Court having examined the same, reserved liberty to the State to urge the point before this Court by filing a review petition, in asmuchas application of the provisions of Section 35(4) of the Act, vis-a-vis non payment of tax discovered pursuant to an inspection.
10. To address the arguments advanced by the parties, it is apt to refer to Section 65(10)(a) of the Act which reads thus:-
“(10)(a) The High Court may, on the application of either party to the petition, review any order passed by it under sub-section (6) on the basis of facts which were not before it when it passed the order.”
11. It is not in dispute that ordinarily the High Court can review the order passed by it only on the basis of the facts which were not before it at the time of passing the order in terms of the aforesaid provision. The facts now urged no doubt forms part of the records, but no such facts were brought to the notice of this Court at the time of disposal of the appeal proceedings. Further, in the light of the judgment of Hon’ble Apex Court in the case of M.M.Thomas (supra), it has been held that this Court is empowered to review the order if the Court is satisfied that there is an error on the part of the Court. We are satisfied that mandate of Section 35(4) of the Act, in filing of the revised returns was not considered while examining the correctness of the order passed by the revisional authority with respect to the circular of the Commissioner dated 07.07.2008 which goes to the root of the matter. This is nothing but an error apparent on the face of the record.
12. We find it beneficial to refer to the relevant paragraphs of the judgment of the Hon’ble Apex Court in the case of M.M.Thomas (supra) and the same is extracted below:-
“13. In this case we are not concerned with the power of review of the Forest Tribunal. It was the High Court which reviewed its own judgment and so the question is whether the High Court has such power dehors Section 8- C(2) of the Act. Power of review conferred on the Supreme Court under Article 135 of the Constitution is not specifically made applicable to the High Courts. Does it mean that the High Court has no power to correct its own orders, even if the High Court is satisfied that there is error apparent on the face of the record?
xxxx xxx xxx xxx xxx xxx xxxx xxx xxx xxx xxx xxx 17. If such power of correcting its own record is denied to the High Court, when it notices the apparent errors its consequence is that the superior status of the High Court will - 10 -
dwindle down. Therefore, it is only proper to think that the plenary powers of the High Court would include the power of review relating to errors apparent on the face of the record.”
13. In the light of the aforesaid observations, we deem it proper to review the judgment of this Court dated 22.02.2016 in STA.No.2/2016 and allied matters.
Hence, review petitions are allowed. The judgment dated 22.02.2016 in STA No.2/2016 and allied matters is recalled and the proceedings are restored to the file.
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