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2021 (7) TMI 304 - HC - VAT and Sales TaxReopening of assessment - Assessment of escaped turnover - tax assessed at lower rate - enhancement of tax liability by invoking Section 12A of the Karnataka Sales Tax Act, 1957 - Misclassification of taxable turnover - HELD THAT:- Admittedly, in the instant case, the Assessing Authority had formed an opinion that the tax has been assessed at a rate lower than the rate at which it is assessable. From the perusal of the order of the Assessing Officer, it is evident that the Assessing Officer was of the opinion that tax has been levied at the rate of 4% and 5% on certain items i.e., telephone instrument and at the rate of 14% on networking instruments, whereas, the networking equipments are taxable under Entry 4 of Part E of 2nd Schedule to the Act at the rate of 12% for the month of April and May and for a period of 13% from June to March. Thus, the condition precedent for invocation of power under Section 12A of the Act has been fulfilled. The Assessing Authority while passing an order of re-assessment has granted concession to the petitioner in the rate of tax. It is evident that on initiation of the re assessment, the assessment proceedings are re-opened and initial order of assessment does not survive and the effect of re-opening of the assessment is to vacate or set aside initial order of assessment and to substitute in its place the order made on re-assessment and the result of re-opening of the assessment is that a fresh order of assessment has to be made. Thus, the Assessing Authority has passed a fresh order of assessment after completion of the re-assessment proceeding, however, the aforesaid aspect of the matter has not been appreciated by Joint Commissioner of Commercial Taxes and the tribunal and it has been held that in recourse to Section 12A of the Act can only be taken for enhancement of the tax liability. The orders passed by the Joint Commissioner of Commercial Taxes and the tribunal have decided the question of law mainly with regard to scope and ambit of Section 12A of the Act erroneously, the same therefore, cannot be sustained in the eye of law - Petition allowed.
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