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2016 (9) TMI 1222 - KARNATAKA HIGH COURT

2016 (9) TMI 1222 - KARNATAKA HIGH COURT - [2016] 96 VST 193 (Kar) - Rectification of re-assessment order under Section 69(2) of the VAT Act - fabrication of iron and steel gates and windows etc - Entry Sl.No.4 of the Sixth Schedule taxable at 4% and at 5.5% after issuance of clarification on 26.3.2015 - Entry Sl.No.23 of Sixth Schedule taxable at 12% - Whether the re-assessment was permissible under the head of “Rectification of the order in purported exercise of the power under Section 69 of K .....

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sioner which in any case has come into existence after the order of re-assessment, the power of rectification was unavailable. Further, it is not the case of respondent-revenue that any other clarification like 21.2.2012 was already in existence prior to 28.6.2010 i.e. date on which the order of re-assessment was passed. - No material which has come into existence after the order/re-assessment is passed can be made as the basis for exercise of power under Section 69 of the Act - question is .....

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allowed the appeal by directing the matter to be considered in light of the observations made in the order of the Tribunal for the assessment of tax. 2. The petitioner-assessee has raised several questions of law. In our view, only substantial law which arises for consideration is: Whether the re-assessment was permissible under the head of Rectification of the order in purported exercise of the power under Section 69 of Karnataka Value Added Tax Act, 2003 (hereinafter referred to as the Act ) o .....

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mmissioner of Commercial Taxes issued clarification in purported exercise of his power whereby, he observed that, for the fabrication and erection of gates and windows etc., duty at the rate of 14% under Entry Sl.No.23 of Sixth Schedule shall be payable. Based on the aforesaid clarification, on 18.2.2013, the notice was issued by the Assessing Authority in purported exercise of power under Section 69(2) of the Act for rectification of the re- assessment order. On 22.2.2013, the petitioner filed .....

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rate will be 5.5% as per Entry No.4 of Sixth Schedule. The petitioner challenged the order of the first appellate Authority dated 20.10.2014 before the Tribunal and the Tribunal ultimately vide order dated 30.12.2015 allowed the appeal partly and remanded the matter to the Assessing Authority as per the observations made to find out as to whether the raw material of the fabrication work is MS or other iron and steel and further directed for collection of tax as per the observations made. Under t .....

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ithin five years from the date of an order passed by it, amend such order. (2) Any amendment which has the effect of enhancing an assessment or otherwise increasing the liability of the person concerned shall not be made unless the prescribed authority, appellate authority or revising authority, as the case may be, has given notice to the person concerned of its intention to do so and has allowed the person concerned the opportunity of showing cause in writing against such amendment. [(2-A) xxxx .....

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sion of law under which the original order, the mistake in which was rectified, has been passed. 6. The aforesaid shows that with a view to rectify the mistake apparent on the record, the power may be exercised within a period of five years from the date of passing of the order for amendment and that too after giving opportunity to the party concerned. What is relevant is, mistake apparent from record . Therefore, neither the record which did not exist at the time when the order of assessment wa .....

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1.2.2012 did not exist at all when the re-assessment order was passed on 28.6.2010. If any material which has come into existence after the order of re-assessment, apart from the aspects that the same was not the part of the record, even otherwise also could not be considered since the material has come into existence on 21.02.2012 after the order of re-assessment dated 28.06.2010 and if considered, the same in our view can be said to be on the extraneous ground beyond the scope of power of rect .....

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ake any observation since as per the observations made by us hereinabove, the exercise of power for rectification under Section 69 was unwarranted. At this stage, we may refer to the decision of this Court in case of Mysore Cements Limited vs. Deputy Commissioner of Commercial Taxes (Assessment-V), City Division-II, Bangalore reported at 1994 STC 464 (Vol.93), this Court for the scope and ambit of power of rectification observed at paras.26 and 27 it was observed thus: 26. Therefore in the final .....

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be a mistake apparent from the record. A point on which there is no decision of the Supreme Court or of the concerned High Court, and in regard to which two or more views are possible, is a debatable point of law. A point of law on which there is divergent views of other High Courts, is a debatable point of law. Hence there cannot be a rectification of an order, merely on the ground that a contrary decision was rendered on the point involved by a High Court other than the High Court of the conc .....

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a binding decision of the Supreme Court or the concerned High Court rendered prior to the date of such order; and/or (ii) a relevant provision of existing law; (b) An order, found to be erroneous: (i) by applying a subsequent enactment given retrospective effect; and/or (ii) by applying a subsequent decision of the Supreme Court or concerned High Court. 27. It should however be borne in mind that orders which have become final, cannot be rectified. This is not because a mistake apparent on the r .....

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eported at 2008(64) KAR LJ.195 (SC), the Apex Court while considering the scope and ambit of jurisdiction for rectification observed at para.11 which reads as under: Mistake is an ordinary word but in taxation laws, it has a special significance. It is not an arithmetical error which, after a judicious probe into the record from which it is supposed to emanate is discerned. The word mistake is inherently indefinite in scope, as to what may be a mistake for one may not be one for another. It is m .....

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e plain meaning of the word apparent is that it must be something which appears to be so ex facie and it is incapable of argument or debate. It, therefore, follows that a decision on a debatable point of law or fact or failure to apply the law to a set of facts which remains to be investigated cannot be corrected by way of rectifications. 8. In our view, in any case, the material which did not exist at all at the time of order of re-assessment was passed on 28.6.2010 would not form basis for rec .....

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