TMI Blog2018 (4) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... n of composition scheme facility has been passed on 22.07.2015 with immediate effect. It is also made clear that VAT option is enabled to file VAT-100 returns with effect from 1.8.2015. Even in the notice, for cancellation of composition scheme, it was proposed to cancel the COT facility with immediate effect. No reassessment can be made under Section 39[1] of the VAT Act subjecting the petitioner to tax under VAT Scheme. It is not in dispute that the petitioner is filing VAT 100 returns and paying the tax under the VAT Scheme subsequent to cancellation of the composition certificate with effect from 22.07.2015 - the reassessment order impugned herein deserves to be quashed without adverting to the other arguments canvassed. Re-assessment order as well as demand notice quashed - Petition allowed. - W. P. Nos. 57182-57193/2016 (T – RES) - - - Dated:- 2-4-2018 - S. Sujatha, J. For the Petitioner : Smt. Radhika Shriranjini. M. D, Adv For the Respondent : Sri Vedamurthy, AGA ORDER The petitioner has challenged the Re-assessment order as well as demand notices dated 04.10.2016 issued by the prescribed Authority respondent relating to the tax periods April 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing the input tax credit and enhancing the tax liability with penalty and interest. Being aggrieved by the Re-assessment order passed under Section 39(1) of the KVAT Act and the demand notices issued, these petitions are filed. 5. Learned counsel for the petitioner mainly submitted that the re-assessment order is illegal and void as the composition scheme opted by the petitioner was cancelled with effect from 22.07.2015; as long as the certificate of composite issued by the authorities is in operation, no re-assessment can be made under the VAT Scheme unless the composite certificate is cancelled. It was argued that the respondent has made a general observation without looking into the details and submissions to the effect that the petitioner is not serving liquor in the restaurant for which composition scheme has been opted and the stock transfer items have not been used in these restaurants. The petitioner acted on good faith based on the permission granted by the respondent and dispatched its obligation under the law/KVAT Act. It was further submitted that when KVAT Act and Rules do not provide any restriction on the part of any registered dealer to opt for payment of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings. 7. Having heard the learned counsel appearing for the parties and perusing the material on record, the question that arises for consideration in these writ petitions is: Whether the respondent-authorities can re- assess the assessee under VAT Scheme for the tax periods 2014-15, the composition scheme being cancelled with effect from 22.07.2015, directing the assessee to submit returns in VAT 100 with effect from 01.08.2015? 8. To answer this question, it is beneficial to refer to Section 15 (1) to 15 (4) of the KVAT Act which reads thus: 15. Composition of tax (1) Subject to such conditions and in such circumstances as may be prescribed, any dealer other than a dealer who purchases or obtains goods from outside the State or from outside the territory of India, liable to pay tax as specified in Section 4 and. (a) whose total turnover [in a year] does not exceed an amount as may be notified by the State Government which shall not exceed fifty lakhs rupees, and who is not a dealer falling under clause (b) or (c) or (d) below;] (b) who is a dealer executing works contracts; or (c) who is a hotelier, restaurateur, caterer [or dealer runn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... } ORIENTAL CUISINES PVT. LTD. No.4, 2ND STAGE, 1ST PHASE, BTM LAYOUT, BANGALORE {01/04/2013} ORIENTAL CUISINES PVT. LTD. No.305, ANAND ONYX, 15TH CROSS, 5TH PHASE EXTN., SARAKKI, BANGALORE {01/08/2013} ORIENTAL CUISINES PVT. LTD. No.1, NEW BEL ROAD, OPP. RAMAIAH HOSPITAL, BANGALORE {25/11/2013} ORIENTAL CUISINES PVT. LTD. No.75/11, 2ND MAIN ROAD,VYALIKAVAL, SADASHIV NAGAR, BANGALORE {25/11/2013} ORIENTAL CUISINES PVT. LTD. No.2317, 27TH MAIN ROAD, H.S.R. LAYOUT, 1ST SECTOR, SARJAPUR ROAD EXTENSION, HOSUR ROAD, BANGALORE {20/11/2010} ORIENTAL CUISINES PVT. LTD. No.1/3, OLD No.12, ULSOOR ROAD BANGALORE {15/09/2008} ORIENTAL CUISINES PVT. LTD. No.754, 80 FEET ROAD, 4TH BLOCK, KORAMANGALA, BANGALORE {23/04/2010} 10. Pursuant to the inspection conducted by the enforcement wing on 16.12.2015, whereby it was noticed that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... office notice T.No.276/2015-16 dated 22/06/2015. * * * * * M/s Oriented Cuisines Pvt. Ltd., TIN 29120705136, Bengaluru-05, being a registered dealer as Hotelier, opted both VAT COT tax payment scheme. Since the dealer is a Pvt. Ltd. Company dealing in Liquor in either at the principle place of business or at one or more branches, not eligible to opt for payment of tax under composition scheme as per Section 15(1)(c) of KVAT Act. Accordingly this office notice dated 22-06-2015 served upon the dealer proposing to cancel COT facility with immediate effect and also called upon to file objections if any. Till date objections not filed. In view of the above facts the COT facility granted is hereby cancelled and VAT option is enabled to file VAT-100 returns with effect from 01-08-2015. [Emphasis supplied] 13. The proposition notice issued under Section 39[1] of the KVAT Act was issued on 7.9.2016 to which detailed reply was filed by the Assessee. On consideration of the objections and rejecting the same, reassessment proceedings were concluded, assessing the petitioner under VAT Scheme for the tax period 1.4.2014 to 31.3.2015 subjecting the taxable turnover to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication within the prescribed period, the jurisdictional local VAT Officer or the VAT Sub-Officer, if he is satisfied that the form of VAT submitted under Rule 136 is correct and complete, then within the time prescribed, he shall issue certificate in Form VAT-8 to the dealer. In the present case, such certificate has been issued and therefore, it would presuppose that the VAT Officer at the relevant point of time when the certificate was issued was satisfied about the correct and complete details submitted in the form under Rule 136. 10. Rule 145 of the Rules, which is relevant for the present case reads as under:- 145. Cancellation of certificate:- The jurisdictional Local VAT officer or VAT sub- officer shall, on receipt of a final return filed by the dealer under Rule 143 and in the case of a dealer falling under Rule 142 or 144 on receipt of the dealer s final return or on his own motion, cancel such dealer s certificate and inform the dealer in Form VAT 11. The aforesaid shows that the jurisdictional Local VAT Officer or Vat Sub- Officer upon receipt of reply of the dealers, finally return or on his own motion may cancel such dealer s certificate and ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice purported to be under Section 38(6) of the KVAT Act to initiate suo motu revision proceedings informing the assessee that the permission granted was illegal and hence the proposal was made to withdraw the same and also to impose the tax as if there was no permission granted under Section 38(6) of the KVAT Act, held that on an application filed by the assessee exercising the powers under Section 38(6) of the KVAT Act, permission was granted to treat each of the places of business as a separate unit for the purpose of levy assessment and collection of tax and thereupon all the provisions of the Act regarding registration, filing of returns, assessment and collection of tax was made applicable. However, aforesaid provisions made it very clear that where a dealer is a body corporate and has more than one place of business and if it so desires, the Commissioner may on an application from it and on being satisfied that the provisions are likely to cause hardship, by a special order, grant such permission subject to the condition as may be prescribed by him in terms of the Act and its Rules. In the said case, in the principal place of business where the appellant was carrying on bu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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