2021 (6) TMI 1167 - HC - VAT and Sales Tax

Court Waives 30% Tax Pre-Deposit for Public Sector Undertaking, Grants Interim Relief for Specific IT Products.

M/s Bharat Electronics Limited Versus The Deputy Commissioner of Commercial Taxes, Bangalore And The Joint Commissioner of Commercial Taxes, Bangalore

The HC ruled in favor of the petitioner, a Public Sector Undertaking, by waiving the requirement for a 30% pre-deposit of tax under Section 62(4)(c)(i) of ... Seeking waiver of the requirement of pre-deposit of 30% of tax as required under Section 62(4)(c)(i) of the Karnataka Value Added Tax Act, 2003 - HELD THAT:- Taking note of the order in STA Nos. 749 & 750/2016, which remains in force and not having been stayed, taking note the peculiar facts of the case including that the petitioner is a Public Sector Undertaking, that for the same products in the assessment proceedings for the year April, 2014 to March, 2015 the Tribunal had ruled that the products are leviable with tax at 5.5.%, it would be appropriate that the deposit for the purpose of consideration of his application for stay under Section 62(4)(c)(i) be waived considering the order in STA Nos. 749 & 750/2016. However, it is clarified that in the event the order in STA Nos. 749 & 750/2016, is set aside in S.T.R.P.No.102/2018, the petitioner would be relegated to the same stage of his interim relief being subject to deposit as contemplated under Section 62(4)(c)(i) of the Act. Accordingly, petition is disposed off while clarifying that the petition is being disposed off only as regards to the limited aspect of deposit to be made for seeking stay under Section 62(4)(c)(i) of the Act. Issues:Validity of order dated 20.04.2021 and waiver of pre-deposit of 30% tax under Section 62(4)(c)(i) of the Karnataka Value Added Tax Act, 2003.Analysis:The petitioner challenged the validity of the order dated 20.04.2021 and sought waiver of the pre-deposit requirement of 30% tax for consideration of interim relief. The petitioner argued that the Tribunal had directed a tax rate of 5.5% for certain items, treating them as IT products for assessment years 2014-2015 and 2016-2017. However, the Assessing Officer passed an order divergent to the Tribunal's direction for the previous assessment year. The petitioner contended that the deposit should be waived based on the Tribunal's order in STA Nos. 749 & 750/2016 to be eligible for interim relief under Section 62(4)(c)(i) of the Act.The State's counsel argued that the Tribunal's order in STA Nos. 749 & 750/2016 was under revision proceedings in S.T.R.P. No. 102/2018, which was pending consideration. The court noted the discrepancy between the Assessing Officer's order and the Tribunal's direction regarding the tax rate for the same products and assessee. Despite the pending revision proceedings, there was no stay on the Tribunal's order till date.The court acknowledged the petitioner's claim for parity based on the Tribunal's order in STA Nos. 749 & 750/2016, which upheld the tax rate of 5.5% for the products. Considering the petitioner's status as a Public Sector Undertaking and the benefit of the Tribunal's order for assessment year 2014-2015, the court deemed it appropriate to waive the deposit for the interim relief application under Section 62(4)(c)(i) based on the Tribunal's order. However, the court clarified that if the Tribunal's order in STA Nos. 749 & 750/2016 was set aside in S.T.R.P. No. 102/2018, the petitioner would be required to make the deposit as per the Act.The petition was disposed of, clarifying that the decision was limited to the deposit for seeking stay under Section 62(4)(c)(i) and should not be considered a precedent for other assesses due to the petitioner being a Public Sector Undertaking.