Allowed

M/S. Bb Jewellers and Finance Pvt. Ltd. v. the Deputy Commissioner of Commercial Taxes

Karnataka HC6 Jan 2016WP/56186/2015

Case brief

AI extract

What is this about?

Writ petitions filed under Articles 226 and 227 of the Constitution of India challenging a re-assessment order and consequent demand notice under the Karnataka Value Added Tax Act, 2003. The court allowed the petitions and quashed the impugned orders, directing the Government Advocate to ensure the respondents furnish a complete stock statement to facilitate further action.

What did the court decide?

The impugned Annexures (re-assessment order and demand notice) are quashed. The Government Advocate is directed to instruct respondents to furnish a complete stock statement.

M/S. Bb Jewellers and Finance Pvt. Ltd. Vs the Deputy… — GST and Indirect Tax | Karnataka HC (2016)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 6^TH DAY OF JANUARY 2016

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BEFORE

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THE HON’BLE MR.JUSTICE ANAND BYRAREDDY

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WRIT PETITION NOS.56186/2015 & 624-634/2016 (T-RES)

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Between: M/s.BB Jewellers and Finance Pvt. Ltd., A Company incorporated under the Companies Act, 1956 Having its office at: No.815, 80 feet Road, Opp. Police Station, Koramangala, Bangalore-560 095. Represented by its Director Mr. Deepak Bethala, S/o Prakash Bethala, Aged about 43 years. …PETITIONER

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(By Shri Harish V.S., Advocate)

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And :

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The Deputy Commissioner of Commercial Taxes (enforcement)-2, South Zone, V.T.K-2 Koramangala, Bangalore-560047.

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The Deputy Commissioner of Commercial

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Taxes, (Audit)-4.2, VAT Division-4, ‘A’ Block, V.T.K-2 Koramangala, Bangalore-560 047. …RESPONDENTS

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(By Shri S.V.Girikumar, Additional Government Advocate)

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These Writ Petitions are filed under Articles 226 and 227 of the Constitution of India praying to quash the impugned order of re-assessment passed by the 2^nd respondent under Sections 39(1), 72(2) and 36(1) of the Karnataka Value Added Tax Act, 2003, dated 30.10.2015 in bearing No.DC-4.2/DVO4/15-16 for the period April 2014 to March 2015 i.e., Annexure ‘J’, and the consequential Demand Notice issued by the 2^nd respondent in Form VAT 180, dated 30.10.2015, for the tax period 2014-15 i.e., Annexure ‘K’.

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These Writ Petitions coming on for preliminary hearing this day, the Court made the following:

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ORDER

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These petitions coming on for preliminary hearing, the Government Advocate is directed to take notice for the respondents and the petitions are heard and disposed of having regard to the facts and circumstances.

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The petitioner is said to be engaged in the business

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of sale of gold and silver and is a registered dealer under the

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Karnataka Value Added Tax Act, 2003 (hereinafter referred to as the ‘KVAT Act’ for the purpose of brevity). It is the case of the petitioner that the petitioner’s business premises was inspected by the first respondent on 21.04.2014 and in the course of inspection, a statement of physical stock held by the petitioner in its business was drawn up by way of a separate statement duly attested with the seal and signature of the Director of the petitioner.

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The 1^st respondent had issued an endorsement on

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5^th July 2015 stating that he had already obtained statement of physical stock from the petitioner on the date of inspection and directed the petitioner to furnish the stock value as on the date of inspection once again. Although the physical stock details were already there with the 1^st respondent, the petitioner was compelled to furnish the value of stock at Rs.22,20,62,023/-.

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The 1^st respondent had issued a notice under Section 74(1) of the KVAT Act dated 19.07.2014 proposing to

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levy penalty on the ground of alleged stock difference. The petitioner had replied to state that the statement of physical stock that was drawn at the time of inspection was never furnished and he failed to understand as to how there could be difference in stock and without the statement, the petitioner being unable to explain the difference in stock was pointed out. The 1^st respondent failed to furnish a copy of the stock statement as requested.

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As the matter stood thus, the 2^nd respondent had

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issued a similar notice under Sections 39(1), 72(2) and 36(1) of the KVAT Act for the year 2014-15 dated 24.07.2015 proposing to levy additional tax, interest and penalty on the ground of alleged stock difference. The petitioner had again reiterated his stand and sought for a copy of the stock statement while narrating the entire facts as already stated.

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It is the petitioner’s grievance that the 2^nd respondent even then failed to furnish the stock statement and

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concluded the proposals in what the petitioner terms as nonspeaking order of re-assessment levying additional tax, interest and penalty on the alleged stock difference. The petitioner has therefore, filed this writ petition.

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The learned Government Advocate at the first

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instance would submit that there is a rectification of the application filed by the petitioner and during the pendency of these petitions, a stock statement has indeed been handed over to the petitioner and that would enable him to submit his reply

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and it will be considered along with the rectification order.

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The learned counsel for the petitioner further

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would point out that the so called statement that has been furnished is an incomplete statement in that at the point of inspection, a statement was sought to be drawn up when servant of the petitioner was present in the business premises. Thereafter, the Director of business having given his statement, it is seen that the earlier statement which was abandoned is

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what has been furnished to the petitioner. However, there is a subsequent statement of the Director duly attested by his seal and signature and the same has not been furnished. If that statement is furnished, the petitioner would be in a position to address the notice issued to him and appropriate orders could be passed thereafter.

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The learned Government Advocate is, therefore, directed to instruct the respondents to furnish a complete stock statement as claimed by the petitioner and the petitioner shall be given an opportunity of addressing the notice issued to him and thereafter, appropriate orders would be passed in accordance with law.

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Accordingly, the petitions are allowed. The impugned Annexures ‘J’ and ‘K’ are quashed with liberty to the respondents to take further action in terms as aforesaid.

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The petitioner shall appear before the 2^nd respondent

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within four weeks from the date of issuance of the inspection statement.

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Government Advocate is permitted to file memo of appearance within two weeks.

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Sd/JUDGE

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sma

M/S. Bb Jewellers and Finance Pvt. Ltd. v. the Deputy Commissioner of Commercial Taxes

Case brief

What is this about?

What did the court decide?

M/S. Bb Jewellers and Finance Pvt. Ltd. v. the Deputy Commissioner of Commercial Taxes

Case brief

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What did the court decide?

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