2019 (11) TMI 1127 - HC - VAT and Sales Tax

Court dismisses petition seeking tax adjustment/refund under KVAT Act; rectification request rejected as untimely.

M/s. Furtado Food Products Versus Deputy Commissioner of Commercial Taxes [Audit], Udupi

The court dismissed the writ petition seeking adjustment or refund of unallowed tax exemption amount under the KVAT Act. The petitioner's request for ... Rectification of order - Adjustment of balance unallowed amount of tax exemption, as against the petitioner’s tax liability - Karnataka VAT Act - Time limitation - HELD THAT:- The petitioner has not raised any objections/claims regarding the entitlement certificate with respect to the KST regime and the assessment orders were passed for the assessment years 2000-01 to 2004-05. It is only in the year 2018, the rectification of the assessment orders has been sought. The assessment orders having reached finality, the Assessing Authority has rightly observed that the clarification of tax exemption under the KST Act cannot be considered. In view of the assessment orders relating to the tax periods herein having reached finality and the revised entitlement exemption certificate as well as the revised tax exemption certificate being unchallenged, the order of this Court in W.P.No.47236/2013 having duly complied by the respondent – authority, no request made by the petitioner to adjust the unallowed amount can be considered by the respondent – authority at this stage. Moreover, such claim is barred by limitation. Petition dismissed. Issues:1. Adjustment of unallowed tax exemption amount under KVAT Act.2. Refund of unallowed tax exemption amount under KVAT Act.3. Consideration of tax entitlement under KST regime.4. Rectification application based on original certificate dated 21.03.2001.5. Compliance with court order in W.P.No.47236/2013.6. Barred claim by limitation.Analysis:The petitioner, a dealer registered under KST Act and KVAT Act, sought adjustment or refund of unallowed tax exemption amount of Rs. 7,46,354/- under KVAT Act for tax periods from June 2007 onwards. The petitioner had received a certificate in 2001 for exemption based on being classified as a Tiny Industry. Subsequently, under the VAT regime, revisions were made to the entitlement certificate, leading to a fresh certificate in 2014. The petitioner's request for rectification of assessment orders was considered, and the exemption amount was determined for both VAT and KST regimes. However, the endorsement dated 31.08.2019 rejected the adjustment sought by the petitioner, leading to the writ petition.The petitioner argued that the original certificate dated 21.03.2001 entitled them to tax exemption beyond the limited amount granted by the authorities under the KST regime. The petitioner contended that the rectification application should have been considered in light of the original certificate, and the tax exemption should have been allowed, adjusted, or refunded accordingly. On the other hand, the Additional Government Advocate supported the order issued by the authorities.The court noted that the petitioner did not raise objections regarding the entitlement certificate under the KST regime when assessment orders were passed earlier. It was observed that the rectification sought in 2018, after the assessment orders had attained finality, could not be considered for clarifications on tax exemption under the KST Act. The court further highlighted that the revised entitlement and tax exemption certificates remained unchallenged, and the compliance with the court order from a previous case had been duly met by the authorities. Therefore, the court concluded that the petitioner's request to adjust the unallowed amount was not feasible at this stage and was also barred by limitation.In conclusion, the court found no error in the impugned endorsement and dismissed the writ petition, deeming it devoid of merit.