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2016 (5) TMI 826 - KARNATAKA HIGH COURT

2016 (5) TMI 826 - KARNATAKA HIGH COURT - [2016] 92 VST 214 (Kar) - Binding effect of circular dated 7.7.2008 vide No.VAT/CR-31/2008-09 and interpretation thereof - Return filed beyond the period of six months showing the additional tax liability - Levying of penalty and interest - Held that:- circular transpires that whenever the word is ‘ any additional tax liability’ it would mean ‘additional net tax liability’ because the moment there is use of the word ‘additional’, it would mean that eithe .....

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et off to be made of the tax already paid and the consequential amount of tax by way of additional tax liability. - Therefore, if the credit or adjustment is to be given to the amount of tax already paid, there is no reason why the credit of input tax should not be adjusted against the tax liability and thereafter to arrive at the additional tax liability. In our view, the interpretation put forward on behalf of the Revenue to the circular dated 7.7.2008 cannot be accepted. - Interpret .....

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ferred decision of this Court in State of Karnataka Vs. Centum Industries Private Limited, Bangalore [2015 (10) TMI 47 - KARNATAKA HIGH COURT]. - If the matter is examined in the light of the aforesaid two aspects and the reasons recorded by the Revisional Authority are considered, it is found that the order cannot be sustained in the eye of law. Therefore, it would be appropriate to refer the matter to the Revisional Authority for reconsideration thereof in the light of the observations mad .....

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sponde nt and with the consent of learned Counsel for the par ties the matters are taken up for final disposal. 2. As in all appeals, common questions arise for consideration, they are being considered simultaneously. We may record that since the respective assessment period differ, separate matters are numbered. Otherwise, the issues involved are common and can be considered by common decision. 3. The short facts of the case appears to be that the appellant herein filed .....

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to as Revisional Authority for short] in suo motu revision by issuance of notice under Section 64[1] of the KVAT Act. The appellant herein filed reply by way of objections to the notices issued by the Revisional Authority on 2.12.2015. The Revisional Authority passed the order under Section 64[1] of the Act, revising the Order dated 23.07.20 13 passed by the Assessing Authority - Assessing Officer. On 21.01.2016, the Prescribed Authority passed the consequential Order under Section .....

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nd 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. 6. On the first aspect, one may record that the Circular dated 7.7.2008 vide No.VAT/CR-31/2008-09 i t has been provided as under: Any revised return filed by a dealer beyond six months from the end of the relevant tax period is liable to be rejected. However, if such revised return indicate .....

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pires that the Revisional Authority considered that the circular refers to the additional tax liability of tax and it does not ref er to any credit of input tax. Learned Additional Government Advocate appearing for the Revenue also supported the said say of the Revisional Authority in the impugned order. 9. On the plain and simple reading of the circular, it transpires that whenever the word is any additional tax liability it would mean additional net tax liability because the moment .....

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to payment of addition al tax liability, it would always mean the credit or set off to be made of the tax already paid and the consequential amount of tax by way of additional tax liability. If the credit or adjustment is to be given to the amount of tax already paid, there is no reason why the credit of input tax should not be adjusted against the tax liability and thereafter to arrive at the additional tax liability. In our view, the interpretation put forward on behalf of the Reve .....

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t ax cannot be accepted when the revised return is filed beyond the period of six months. 11. We may first refer to the decision of the learned Single Judge of this Court in the case of FEDERAL MOGUL GOETZE [INDIA] LIMITED Vs. ADDITIONAL COMMISSIONER OF COMMERCIAL TAX [AUDIT] 52, BANGALORE AND OTHERS reported in [(2011) 42 VST 439 (KARN)]. It was observed by the learned Single Judge that the Commissioner s circular is absolutely sustainable. Further, the learned Single J .....

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in Writ Appeal No.4900/2011 and allied matters and vide Judgment dated 22.04.2015, the Division Bench of this Court did not interfere with the view taken by the learned Single Judge. 13. In another decision of the Division Bench of this Court in the case of STATE OF KARNATAKA Vs. CENTUM INDUSTRIES PRIVATE LIMITED, BANGALORE reported in [(2014) (80) KLJ 65 [HC] [DB], it was a case where no claim of input tax credit was ever made. In the appeal before the Tribunal, the input tax credit .....

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said return was not related to the tax period during which the input tax was paid. 14. This Court further found that the Tribunal did not consider the said aspect and ultimately set aside the Order of the Tribunal. The distinguishing aspect which deserves to be taken note of is that it was n ot matter of input credit to be reflected in the return of the tax period during which input tax was paid. Since the amount relating to input tax was to be decided in the respective period, the .....

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a]. 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 .....

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