SBEE Cables (India) Limited vs The Joint Commissioner of Commercial Taxes (Admn.)

B.V. Nagarathna, J.—The order of the first respondent dated 21-4-2014 (Annexure-V) passed under Section 21(2) of the Karnataka Sales Tax Act, 1957 (hereinafter referred to as ''the Act'') is assailed. In addition the demand notice dated 20-5-2014 is also assailed. Briefly stated the facts are that the petitioner who is a registered dealer had filed his returns for the assessment year 2004-2005 in the prescribed format with regard to its total and taxable turn over under the Act as well as under the Central Sales Tax Act, 1956. The Deputy Commissioner of Commercial Taxes, Bangalore, accepted the returns and passed an order on 17-7-2006. He also issued a demand notice on the said date raising additional demand. The petitioner by his application dated 25-9-2006 sought rectification of the above assessment order and demand notice dated 17-7-2006 under Section 25-A of the Act. The Assessing Authority did not pass any order on the application for rectification within a period of four months from the date of receipt of the said application. The petitioner contends that he was under a bona fide impression that the assessment order as well as the demand notice had stood rectified and that there was no liability on his part to pay any additional tax.

When the matter stood thus, petitioner received notice dated 27-6-2007 issued by the Assessing Authority under Section 13 of the Act calling upon him to pay tax demanded vide notice dated 17-7-2006. The petitioner by his letter dated 7-7-2007 informed the Assessing Authority that he had sought for rectification on 25-9-2006 and that as no orders has been passed on the application seeking rectification, he was under the impression that there was deemed rectification of the assessment order. There afterwards, another notice was issued on 29-11-2007 calling upon the petitioner to pay additional tax. That notice was assailed by the petitioner in W.P. No. 20026 of 2007. This Court by order dated 28-11-2008 disposed the matter by setting aside the notice dated 29-11-2007.

Thereafter, the first respondent issued notice dated 19-3-2010 under Section 21(4) of the Act stating that deemed order of rectification was illegal and that the petitioner was liable to pay additional taxes. That notice was issued by exercising revisional jurisdiction by the first respondent. Various officers of the first respondent-office were posted and transferred and ultimately, as is noticed from the memo filed by the learned AGA, the new incumbent issued notice under Section 3-C of the Act on 21-8-2013 with an intention to hold proceedings on 23-8-2013. The petitioner responded to this notice on 2-9-2013 by filing interim objections assailing the proposed suo motu proceedings by placing reliance on the order passed by this Court in W.P. No. 20026 of 2007. The petitioner also sought time to file final objections as well as personal hearing. On 9-1-2014 a final notice was issued under Section 21(2) of the Act requesting the petitioner to appear. This was responded to by the petitioner on 18-1-2014 seeking four weeks time to appear and for a personal hearing. Then the matter was posted to 7-3-2014. Then a letter was issued on behalf of the petitioner asking for personal hearing in the first week of April 2014. But an endorsement was issued on 12-3-2014 requesting the petitioner to file objections on or before 21-3-2014 and to appear before the Authority on that date at 12.00 p.m. for personal hearing. On 21-3-2014 the Advocate did not appear on that date and a letter was sent on 18-3-2014 for grant of time till 3-4-2014. Accordingly the matter was posted to 3-4-2014. On that date, neither the petitioner nor his Advocate appeared. Under these circumstances, the first respondent after considering the objections filed by the petitioner on 7-3-2014 has passed the impugned order. That order is assailed in this writ petition by contending that it is in violation of the directions and observations passed by this Court in W.P. No. 20026 of 2007, disposed on 28-1-2008 and also that the impugned order which has been passed on 21-4-2014 is time barred and beyond the prescribed period of limitation and hence is illegal.

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

At the outset the learned AGA stated that as against the impugned order, which has been passed under Section 21(2) of the Act, petitioner has a remedy by way of an appeal under Section 22 of the Act. Be that as it may, Counsel for the petitioner submitted that the impugned order has been passed without appreciating the objections raised by the petitioner on 7-3-2014. It is noted from the impugned order that on that day the petitioner''s Counsel appeared and had filed objections. But it was the petitioner who had sought for a personal hearing in the matter. After filing objections on 7-3-2014 neither the petitioner nor his Counsel had appeared before the first respondent-authority, but the impugned order has been assailed on various grounds including on the ground of limitation. If only the petitioner or his Advocate had appeared on the dates before the first respondent and explained the position of law, possibly the first respondent would have appreciated the case of the petitioner in a better perspective. Be that as it may, the only relief that can be granted to the petitioner at this stage is, he is given an opportunity to appear before the first respondent as he had sought for a personal hearing in the matter.

In that view of the matter, the impugned order is quashed. The petitioner or his representative is directed to appear before the first respondent on 21-7-2014 at 11.00 a.m. without insisting on any fresh notice from the first respondent-authority. It is needless to observe that the petitioner would appear on 21-7-2014 or on any other date to be ordered by the first respondent so as to enable the first respondent to dispose of the proceedings in accordance with law and after giving the petitioner an opportunity of being heard. The petitioner or his representative to be heard personally and thereafter the first respondent to pass fresh orders in accordance with law. In view of the aforesaid direction Annexure-V, dated 21-4-2014 stands quashed. Annexure-W which is a consequential demand notice is kept in abeyance till the disposal of the proceeding by the first respondent. With the aforesaid observations and directions the writ petition stand disposed.