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Judgment
B.V. Nagarathna, J.—The petitioner is stated to be a dealer registered under the provisions of the Karnataka Value Added Tax Act, 2003 (hereinafter referred to as ''the Act'') and is engaged in the hotel business, more specifically, preparation and sales of foodstuff through its various outlets. The petitioner had opted for payment of tax under the Scheme of Composition provided u/s 15 of the Act and had accordingly made an application in Form VAT 1 before the first respondent. A certificate was issued in Form VAT 8, certifying that the petitioner was permitted to pay tax by way of composition u/s 15 of the Act with effect from 27.3.2012. It is stated that for the period from October 2012 to August 2013, the petitioner had effected certain purchases of goods like tray sealer machinery, dish washing machine, misting fan, furniture, sign boards and uniforms etc., during the course of interstate trade. The business premises of the petitioner was inspected by the 2nd respondent Officer attached to the Enforcement Wing of the Department of Commercial Taxes on. 21.8.2013 in order to verify the books of accounts and also the nature of activity of business carried on by the petitioner. During the course of verification, it was found that the petitioner had effected purchase of the aforementioned goods during the course of inter-state trade. The stand of the department was that the petitioner was liable to pay tax at the rate of 14.5% in respect of sale from October 2012 and not at the rate of 4% as prescribed under the Composition scheme.
The petitioner made representations with regard to the stand taken by the department and also sought for personal hearing in the matter. However, based on the Circular dated 5.10.2013 (Circular No. ADCOM (I & C)/DC (A3) - CR:94/2013-14), the second respondent had issued notice of cancellation of registration under Rule 145 of the Rules made under the Act calling upon the petitioner to return the composition of tax certificate within seven days from the date of receipt of notice. That notice is assailed in this writ petition.
I have heard the learned counsel appearing for the petitioner and the learned AGA, who appears for respondents and perused the material on record.
At the outset, learned AGA has stated that he has instructions from the department to the effect that no precipitative action has been taken by the department till date, pursuant to the issuance of notice of cancellation of registration dated 6.12.2013.
However, learned counsel for the petitioner contends that the petitioner has not been granted an opportunity of putting forth its case before the department. It was therefore stated that the petitioner may be granted an opportunity to put forth its case before the 2nd respondent before any precipitative action is taken in the matter. In the aforesaid context of the case, the petitioner is at liberty to file its objections to the impugned notice dated 6.12.2013 within 15 days from today. If objections are filed to the impugned notice, the 2nd respondent or the competent authority is directed to consider the same, in the light of the relevant provisions of the Act and Rules and having regard to the nature of business carried on by the petitioner and thereafter to pass a speaking order. Till then, the respondents are directed not to take any precipitative action pursuant to the impugned notice. Writ petition is disposed of with the aforesaid observations and directions.