Declared law on input tax rebate supports rectification despite no original full-rebate claim under the return.

A later Karnataka HC decision declaring that, on the facts of this class of cases, assessees were entitled to full input tax rebate under the KVAT Act required the authorities to give effect to that legal position. Where reassessment orders had proceeded on a partial rebate basis, rectification could not be denied merely because the original return did not claim the full rebate, since the entitlement flowed from the subsequently declared law and there was no stay of that judgment. The assessee was therefore entitled to rectification and the benefit of full input tax rebate.

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Issues: Whether the assessee was entitled to rectification of the reassessment orders and grant of full input tax rebate on the basis of the later decision declaring the law, notwithstanding that the original claim for full rebate had not been made in the return.

Analysis: The returns for the relevant tax period had been accepted and the reassessment orders had proceeded on the basis of partial input rebate under the KVAT Act. A later decision of the Court had declared that, on the facts of this class of cases, the assessee was entitled to full input tax rebate and that the earlier understanding of partial rebate was not correct. Since the legal position stood declared and there was no stay against that judgment, the authorities were bound to give effect to it. The objection that the claim was not made in the first instance was not accepted as a ground to deny rectification where the entitlement flowed from the subsequently declared legal position.

Conclusion: The assessee was entitled to rectification and to the benefit of full input tax rebate.

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