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2020 (11) TMI 553 - HC - VAT and Sales TaxPrinciples of Natural Justice - sufficient opportunity to show cause against the re-assessment not provided - levy of tax on interstate stock transfer and sales made locally in other States, which cannot be subjected to levy of tax in the State of Karnataka - levy of tax on subsidy received by the petitioner from the Central Government - Nutrients Based Subsidy Scheme (NBS Scheme) - HELD THAT:- The essential premise for the petitioner’s case, apart from the question whether there could be levy of tax on subsidy granted to the petitioner based on the aforesaid two schemes, is whether there could be a levy on interstate stock transfer and sales made locally in other States. This question incontrovertibly has not been examined and it would be imperative for the authorities to consider the same as it relates to the very jurisdiction to levy taxes on such stocks impacting the reassessment. Further, if the petitioner succeeds in this regard, the impugned order would have to be modified. As such, the impugned order will have to be set aside on this ground remanding the matter for reconsideration by the Deputy Commissioner of Commercial Taxes [the third respondent]. Furthermore, the other contention on behalf of the petitioner that there cannot be a levy of tax on subsidy availed by the petitioner will perforce have to be considered in the light of the dictum by the Hon’ble Supreme Court in the decision of NEYVELI LIGNITE CORPORATION LTD. VERSUS COMMERCIAL TAX OFFICER, CUDDALORE AND ANOTHER (AND OTHER APPEALS AND CASES) [2001 (9) TMI 926 - SUPREME COURT] and the other contentions of the petitioner. The distinction attempted on the ground that the provisions of the KVAT Act are different from the provisions of similar enactment in the State of Tamil Nadu and Kerala would not be permissible if the Hon’ble Supreme Court in similar set of circumstances has decided the question in favour of an entity that has received subsidy. The impugned order passed by the third respondent is set aside and the matter remanded to the third respondent for reconsideration - petition allowed in part by way of remand.
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