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2015 (5) TMI 63 - KARNATAKA HIGH COURT

2015 (5) TMI 63 - KARNATAKA HIGH COURT - [2015] 83 VST 345 (Kar) - Reopening of assessment - Cancellation of assessment orders - Held that:- Considering the language and the provisions of S.63 A of the KVAT Act, once the order of cancellation of the assessment order had been passed by the Revisional Authority, it could not proceed to pass a fresh assessment order but could only direct the Assessing Officer to pass a fresh assessment order. - With the coming into force of the amendment made with .....

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t and not proceed to pass an order of reassessment. Thus, we are of the firm opinion that this is a case where the Revisional Authority has clearly exceeded its jurisdiction in proceeding to reassess the case and to that extent, the order passed by the Revisional Authority is wholly unjustified in law and liable to be quashed - earlier part of the order which relates to the reasons for cancellation or setting aside the assessment order is affirmed and is not being interfered with. - Decided part .....

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te to the tax period for the years 2006-07, 2007-08 and 2008-09 in which the tax paid by the assessee appellant was at the rate of 4% on the sales of parts of UPS. On the basis of the return filed by the appellant for the aforesaid period, the assessment was deemed to have been accepted, however, the matter was reopened for reassessment under S.39(1) of the Karnataka Value Added Tax Act, 2003 (KVAT Act for short) and by order dated 5.4.2010, the Deputy Commissioner of Commercial Taxes, Bangalore .....

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es / Revisional Authority, after setting aside the assessment order, proceeded to pass reassessment order under S.63 A of the KVAT Act. Challenging the said order, the appellant filed WPs 5031-33 / 2015 and 5955-87/2015 which have been dismissed by the learned Single Judge by judgment and order dated 13.12.2015 on the ground of availability of alternate remedy to the petitioner/appellant of filing an appeal before the Tribunal under S.63 of the KVAT Act. Aggrieved by the same, these writ appeals .....

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nt that after having cancelled or setting aside the assessment orders, the Revisional Authority could not have proceeded to pass a fresh assessment order and the only option left under S.63 A of the KVAT Act for the Revisional Authority was to remand the matter to the Assessing Officer for fresh assessment. It is thus contended that to the extent of passing a fresh assessment order, the impugned order passed by the Revisional Authority was wholly without jurisdiction and as such, the availabilit .....

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of reassessment after the assessment orders had been set aside in revision. S.63 A of the KVAT Act provides for revisional powers for the Joint Commissioner. The relevant sub-section (1) of S.63 A is reproduced below: S:63-A: Revisional Powers of Joint Commissioner (1) The Joint Commissioner may on his own motion call for and examine the record or any order passed or proceeding recorded under this Act and if he considers that any order passed therein by any officer, who is not above the rank of .....

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esh assessment. It is contended by the learned counsel for the appellant that once the assessment order was cancelled by the Revisional Authority, it was not left with any other option but to direct for fresh assessment which could only be done by the Assessing Officer and not the Revisional Authority. In the later part of sub-section (1) of S.63 A of the KVAT Act, earlier the provision was for canceling the assessment order or directing for a fresh assessment. But, by amendment which came into .....

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his Court rendered in the case of Shankar Construction Co Vs Addl. Commissioner of Commercial Taxes - (2001) 124 STC 265 wherein while considering the provisions of S.22 A of the Karnataka Sales Tax Act which are para materia to S.63 A of the KVAT Act, 2003, it was held that once the order of the Assessing Officer was set aside, it would be impermissible for the Revisional Authority to re-do the assessment / fresh assessment. On the other hand, learned counsel for the respondents has submitted t .....

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een laid on the word 'including which, according to the learned counsel for the respondents, is only illustrative and not exhaustive. It is thus contended that merely because the Revisional Authority has power for directing a fresh assessment, it would not take away the power of the Revisional Authority in passing the fresh assessment order itself, if the circumstances of the case justify the same. It is submitted that in the present case, the facts justified passing of a fresh assessment or .....

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Act which was under consideration before the Division Bench of this Court in the case of Shankar Constructions Company (supra), is identical to the provisions of S.63 A of the KVAT Act as it existed prior to the amendment of 2013 and the word used in the last sentence was 'or and not 'and , which has been substituted in the KVAT Act, by amendment of 2013. The same would be significant as it would make it further clear that the option to reassess was not there with the Revisional Authorit .....

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e between the counsel before us and the subteleties of the arguments canvassed by them. We do consider that the point of law raised is one of importance because it touches the all important question as to whether the revisional authority is invested with unfettered omnipotent powers or whether there is a definite limitation to the exercise of that power and if so what. While we have no hesitation in accepting the greater part of the submissions canvassed by the learned Government Advocate that t .....

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ssible for the revisional authority to step into the shoes of the assessing officer and to redo the assessment or pass a fresh assessment order. In the first instance, it is necessary to highlight the fact that the statutory powers are necessarily circumscribed by the wording of S.22A and this section unequivocally indicates that if reassessment is necessary that the revisional authority can only direct reassessment. We do not need to re-emphasise the fact that the Legislature obviously and in o .....

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by way of appeal, revision, etc. If the revisional authority which is a highly placed authority of the department, is to exercise the powers of doing a fresh assessment, then the right of appeal, revision etc., is totally annihilated and this could never be the intention of the Legislature. It is therefore abundantly clear to us that the objection canvassed before us by the appellant s learned counsel is well-founded and that the same is liable to be upheld. We see no reason to disagree with th .....

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