IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF JANUARY 2017 BEFORE THE HON’BLE MR.JUSTICE RAGHVENDRA S. CHAUHAN WRIT PETITION Nos.60-62/2017 (T-EYT) BETWEEN :
M/s. VDB Projects Pvt. Ltd., A Company registered under the Companies Act, Registered office at No.842/A, 3rd Floor, 100 feet Road, Near Binnimangala, Indiranagar, Bengaluru-560 038 Represented by its Executive Director, Sri Abhinav Reddy S/o. Raja Gopala Reddy, Aged about 36 years. ... Petitioner (By Smt. Vani H., Advocate) AND :
1. Deputy Commissioner of Commercial Taxes, (Audit and Recovery) 5.7, DVO-V, 6th Floor, VTK-II, A Block, Koramangala, Bengaluru-560 047.
2. State of Karnataka Represented by its Secretary, Department of Finance, Ambedkar Veedhi, Vidhana Soudha, Bengaluru-560 001. ... Respondents (By Sri T. K. Vedamurthy, AGA) These Writ Petitions are filed Under Articles 226 & 227 of the Constitution of India praying to set aside the assessment order dated 27.08.2013 passed by the Respondent No.1 under section 5(4) of the KTEG Act for the year 2010-11 vide Annexure-G and etc.
These Writ Petitions coming on for preliminary hearing this day, the court made the following :
O R D E R The petitioner, M/s VDB Projects Pvt. Ltd., has challenged the Assessment Order, dated 27.08.2013, passed by the Deputy Commissioner, Commercial Tax (Audit & Recovery) for the assessment year 2010-11. The petitioner has also challenged the Assessment Order dated 20.01.2015, passed by the first respondent, for the assessment years 2011-12 and 2012-13. The petitioner has also sought the prayer that this Court should direct the first respondent to grant exemption to the petitioner from levy of entry tax on the purchase of bitumen and its causing entry into the local area in terms of the Notification dated 30.03.2002 issued by the State Government.
2. The brief facts of the case are that the petitioner happens be a dealer registered under the Karnataka Value Added Tax Act, 2003 (‘KVAT Act,’ for short). The petitioner is engaged in the execution of works contract such as laying of roads, and construction of other infrastructure projects. For the purpose of construction of roads, the petitioner requires tar to lay black top roads/bituminous concrete roads, which is available in the market at expensive rates. Therefore, in order to reduce the cost, the petitioner has set up a Hot Mix Plants having capacity of 160 TPH for the purpose of preparation of tar also known as bituminous macadam, which is laid on the road in single or multiple layers. In order to prepare the final product, the essential ingredients are bitumen, emulsion, various sizes of metals, binders and minerals.
3. Vide Notification dated 30.03.2002, the State of Karnataka specified the rate of entry tax to be levied and collected on the entry of goods into local area, but exempted the said levy goods brought into local areas for consumption or use as raw materials, component parts and inputs in the manufacture of intermediate, or finished product. According to the notification, no tax was payable on entry of goods which were used for manufacture of intermediate or finished products. The said notification was subsequently amended by a Notification dated 15.03.2003 and another Notification dated 03.07.2003.
4. By notification dated 15.03.2003, an explanation was inserted, which clearly stated that in case any of the goods specified in serial numbers 1 to 10 are brought into the local area for use or consumption as raw materials, the tax payable on such goods shall be at the rates specified therein. According to the petitioner, even the subsequent Notification dated 03.07.2003, if read in proper perspective would exempt bitumen from the levy of entry tax.
5. For the year 2010-11, the petitioner purchased bitumen, which is worth Rs.9,18,65,056/- from M/s. MRPL by paying the applicable VAT. Similarly, the petitioner purchased bitumen worth Rs.1,78,15,653/- from M/s. BPCL by paying the applicable VAT and entry tax.
6. Similarly, for the year 2011-12 the petitioner purchased bitumen worth Rs.7,18,76,910/- from the registered dealer M/s. MRPL, and bitumen worth Rs.3,96,88,953/- from M/s IOCL. Likewise, the petitioner purchased bitumen worth Rs.34,23,538/- from M/s. BPCL.
7. Even for the year 2012-13, the petitioner purchased bitumen worth Rs.7,49,75,630/- from M/s. IOCL by paying applicable VAT. According to the petitioner he had utilized the bitumen in the manufacture, and in processing of finished product.
8. While filing its declaration for the year 2010-11, 2011-12, and 2012-13, the petitioner did not declare the entry tax at 5% on the bitumen purchased from the IOCl and caused entry into the local area under the bonafide impression that it is eligible to claim exemption in terms of notification dated 13.03.2002.
9. However, the Deputy Commissioner, Commercial Taxes, respondent No.1, issued a notice on 27.05.2013 to the petitioner for imposing levy tax on the import of bitumen during the year 2010-11. The petitioner filed objections to the said notice. However, vide Assessment Order dated 27.08.2013 for the year 2010-11, vide Assessment Order dated 20.01.2015 for the year 2011-12 and 2012-13, the respondent No.1 has demanded a huge tax and interest from the petitioner.
10. Although, the petitioner ought to have filed appeals against the said Assessment Orders, under Section 13(2) of the KTEG Act, within 30 days from the date of receipt of Assessment Orders, it failed to do so. Hence, the present petition before this Court.
11. This Court has asked learned counsel for petitioner a pointed query as to why the alternative remedy provided under the KTEG Act was not pursued by the petitioner. The learned counsel submits that the petitioner was advised not to pursue the said remedy. Moreover, the remedy cannot be pursued presently as the competent authority cannot condone the delay of more than the period of 180 days. Hence, according to the learned counsel for petitioner, the petitioner has no other option, but to invoke the writ jurisdiction of this Court by filing the present writ petitions.
12. Heard the learned counsel.
13. The stand being taken by the learned counsel that since the petitioner was advised not to pursue the alternative remedy, therefore it failed to pursue the alternative remedy is clearly untenable and unacceptable. For, ignorance of law is not a valid defence. The petitioner would be well aware of the facts that assessment orders needs to be challenged by filing an appeal under the KTEG Act. In case the petitioner has chosen to not avail the alternative remedy, the choice has been made at its own peril. But, the petitioner cannot be permitted to ignore, and circumvent the alternative remedy provided by law. It cannot be allowed to rush to this Court after the limitation period is over, and to plead that the writ jurisdiction should be invoked by this Court. If such a conduct is permitted to a litigant, the litigant would be motivated to ignore the alternative remedy, to circumvent the law, and to rush to this Court after the limitation period provided for the remedy is over. Therefore, this Court cannot be a party to motivate the people to violate the law and to circumvent the scheme established under the KTEG Act. After all, a Court of law cannot be a party to the violation of law. Since the petitioner had an alternative remedy available to it, since it chose not to exercise the alternative remedy, it has done so at its own risk. Therefore, this Court is not inclined to invoke its writ jurisdiction in the peculiar facts and circumstances of these cases.
14. The writ petitions are hereby dismissed.
Np/-
Sd/- JUDGE