2018 (8) TMI 2065 - HC - VAT and Sales Tax

Court validates Karnataka VAT Act amendments, dismisses challenges to Section 40 provisos, and upholds assessment orders.

M/s Yeshwanth Laxman Sable Versus The Government of Karnataka Commissioner of Commercial Taxes, The Assistant Commissioner of Commercial Taxes, The Assistant Commissioner of Commercial Taxes And M/s Yeshwanth Laxman Sable Versus State of Karnataka, Commissioner of Commercial Taxes, The Assistant Commissioner of Commercial Taxes, The Assistant Commissioner of Commercial Taxes (AUDIT)

The court upheld the validity of the amendments to the Karnataka Value Added Tax Act, 2003, and dismissed the writ petitions challenging the provisos to ... Vires of first and second provisos to sub-section (1) of Section 40 of the Karnataka Value Added Tax Act, 2003 - enlarging the period of limitation substituted by Act No.17 of 2012 only with prospective effect from 01.04.2012 - HELD THAT:- The issue involved in the present writ petitions have already been considered and decided by this Court in the case of M/S CIFTECH SOLUTIONS PVT. LTD., M/S. SREE SHEELE PRIVATE LIMITED, M/S. STEEL AUTHORITY OF INDIA LIMITED, M/S. SRI NIDHI GRANITES PRIVATE LIMITED, M/S. NARAYANA DEVADIGA, WIPRO LIMITED, M/S SRIDEVI AGENCIES, M/S INTERNATIONAL FLAVORS & FRAGRANCES INDIA PVT. LTD., M/S. ALCOATS, SRI M.S. SRINIVAS PROPRIETOR, M/S S.V. INDUSTRIES M/S. RAMACHANDRA PHARMA CHEM M/S BINDU PROMOTERS AND DEVELOPERS M/S AYYAPPA INDUSTRIES VERSUS STATE OF KARNATAKA & OTHERS [2015 (8) TMI 1389 - KARNATAKA HIGH COURT]. The said order passed by the Co-ordinate Bench has reached finality. Petition dismissed. Issues:1. Validity of provisos to sub-section (1) of Section 40 of the Karnataka Value Added Tax Act, 2003.2. Effect of amendment on tax periods with expired limitation under old law.3. Legality of amendment by Karnataka Act No.54 of 2013.4. Validity of assessment orders passed earlier to legislation or amendment Act No. 54/2013.5. Quashing reassessment order dated 03.03.2014 under Sec. 9(2) CST Act, 1956 for tax periods in 2006-07.Analysis:1. The petitioner sought a writ of certiorari or a declaration challenging the provisos to sub-section (1) of Section 40 of the Karnataka Value Added Tax Act, 2003, which extended the period of limitation. The petitioner argued that the amendment with prospective effect from 01.04.2012 could not revive tax periods where the limitation under the old law had already expired. Additionally, the petitioner contended that the amendment by Karnataka Act No.54 of 2013 was arbitrary, irrational, invalid, beyond legislative competence, and ultra vires the Constitution of India.2. The issue of the validity of the provisos and the impact of the amendment on expired limitation periods had been previously addressed by the High Court in the case of M/s Ciftech Solutions Pvt. Ltd., Vs. State of Karnataka. The court noted that the order in the mentioned case had attained finality. Consequently, the present writ petitions were dismissed in line with the terms of the earlier order dated 12.08.2015 in W.P. No. 51802/2014 and related matters.3. The court upheld the decision reached in the prior case, thereby dismissing the present writ petitions. The legality of the provisos and the subsequent amendment by Karnataka Act No.54 of 2013 were considered, leading to the conclusion that the amendment was valid and enforceable. As a result, the assessment orders passed before the legislation or amendment Act No. 54/2013 were deemed legal and not subject to being set aside.4. Furthermore, the court addressed the issue of quashing the reassessment order dated 03.03.2014 under Sec. 9(2) CST Act, 1956 for the tax periods in 2006-07. The court's decision to dismiss the present writ petitions implied that the reassessment order was upheld, and the petitioner's challenge against it was not successful.5. In conclusion, the court's ruling maintained the validity of the amendments to the Karnataka Value Added Tax Act, 2003, and affirmed the legality of assessment orders passed before the relevant legislation. The dismissal of the writ petitions signified the court's decision to uphold the previous judgment and reject the petitioner's claims regarding the provisos, amendments, and reassessment order.