International Flavour and Fragrances India Private Limited vs State of Karnataka

B.V. Nagarathna, J.—Petitioner has assailed the order of reassessment dated 24-2-2014 (Annexure-D) passed under Section 9(2) of the Central Sales Tax Act, 1956 read with Sections 39(1), 36(1) and 72(2) of the Karnataka Value Added Tax Act, 2003 and also the endorsement dated 23-6-2014 (Annexure-G). Briefly stated the facts are that the petitioner filed its returns under the provisions of the Central Sales Tax Act, 1956. Reassessment proceedings in respect of those returns for the year 2012-2013 were taken up by the 3rd respondent-authority and notice dated 12-2-2014 was issued to the petitioner. In response to which petitioner appeared before the authority on 20-2-2014 and sought for four weeks time to produce all the documents. That request was turned down. However, on that date, three days time upto 22-2-2014 was granted to the petitioner to file all the documents. On 22-2-2014, the authorised representative of the petitioner did not appear before the 3rd respondent-authority and consequently, no documents were produced on 22-2-2014. Thereafter, the impugned order of reassessment was passed two days later i.e., on 24-2-2014. Subsequently, petitioner filed an application for rectification of the mistakes in the said order under Section 69 of the Karnataka Value Added Tax Act. On that application, the impugned endorsement dated 23-6-2014 has been issued directing the petitioner to pay the full tax dues as stated in the Circular dated 20-6-1996 issued by the Commissioner of Commercial Taxes, Bangalore, failing which the rectification proceedings would not be initiated. The impugned reassessment order and the endorsement dated 23-6-2014 are impugned in this writ petition.

I have heard the learned Counsel for the petitioner and learned AGA who appears for the respondents and perused the material on record.

The main grievance of the petitioner is that the 3rd respondent did not grant sufficient time to produce the ''C'' Forms and ''F'' Forms for the purpose of passing of the reassessment order and that only three days time was granted which was wholly insufficient to produce those documents. It was contended that in the absence of those documents, the reassessment order is erroneous and that an opportunity may be given to the petitioner to file the documents i.e., 17 ''F'' Forms and 23 ''C'' Forms, so that the 3rd respondent-authority could consider those documents and pass a fresh order of reassessment. In this context, it was also submitted by the learned Counsel for the petitioner that if an opportunity is given to the petitioner to appear before the 3rd respondent in order to produce the documents, then the petitioner would not press the application seeking rectification of the impugned order of reassessment.

Per contra, learned AGA however, objected to the submissions of the learned Counsel for the petitioner by contending that the petitioner has not submitted the documents in time though the 3rd respondent-authority had granted time and the attempt of the petitioner is only to delay the recovery of taxes. He also stated that the filing of the rectification application would imply that the order of reassessment has been understood by the petitioner and therefore, the condition precedent for considering the application for rectification has to be complied with by the petitioner. Having heard the learned Counsel on both sides and on perusal of the material on record, it is noted that the notice for commencement of the rectification proceedings was issued on 12-2-2014 directing the petitioner to appear before the authority on 19-2-2014. Petitioner sought for time to produce the necessary documents. However, on 20-2-2014, only two days time upto 22-2-2014 was granted. In those two days time the petitioner has not submitted the forms and in the next two days, impugned reassessment order dated 24-2-2014 has been passed. Obviously, the impugned reassessment order has been passed without considering the documents that were to be submitted by the petitioner. Petitioner may have had various reasons for not submitting the documents but the undue haste with which the impugned order of reassessment has been passed is noted. Commencement of the proceedings was on 12-2-2014 and on 24-2-2014, the reassessment order was passed. Had the 3rd respondent-authority granted reasonable time instead of only two days time, possibly the petitioner would have submitted the documents that were necessary for conducting the reassessment proceedings. In not granting sufficient time to the petitioner to produce the requisite documents in my view, there has been violation of principles of natural justice and the impugned order which has been passed is virtually an ex parte order and on that ground alone it ought to be quashed. In that view of the matter and having regard to the fact that the petitioner would not press its application for rectification of the order of reassessment, the only relief that can be granted to the petitioner is to appear before the 3rd respondent-authority and to produce the requisite documents. If it is so done, then the 3rd respondent-authority to consider those documents and dispose of the reassessment proceedings in accordance with law.

In the result, the writ petition is disposed of in the following terms:

Annexure-D, dated 24-2-2014 is quashed. In view of the withdrawal of the application for rectification, Annexure-G, dated 23-6-2014 becomes inconsequential. The petitioner to appear before the 3rd respondent on 28-7-2014 and produce the requisite documents on the said date. If the petitioner appears before the 3rd respondent-authority on the said date and produces the requisite documents namely ''C'' Forms, ''F'' Forms and any other document on which the petitioner relies upon, the 3rd respondent-authority to consider them in accordance with law and to pass a fresh reassessment order. In case the petitioner does not appear on the said date with the requisite documents, then the impugned order dated 24-2-2014 shall be given effect to.

With the aforesaid observations and directions, writ petitions stand disposed of.