Pepsico India Holdings Pvt. Ltd. v. the Deputy Commissioner of Commercial Taxes

Karnataka HC3 Mar 2021WP/906/2019

Case brief

AI extract

What is this about?

Writ petition filing under Article 226 challenging the validity of an order and demand notice issued under KVAT Act. Court set aside the impugned order and demand notice for violation of principles of natural justice due to insufficient time for reply.

What did the court decide?

Impugned order at Annexure-E set aside; consequential demand notice at Annexure-E1 set aside; respondent to afford opportunity for personal hearing.

Pepsico India Holdings Pvt. Ltd. Vs the Deputy… — GST and Indirect Tax | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 3^RD DAY OF MARCH 2021

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BEFORE

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THE HON'BLE MR.JUSTICE S. SUNIL DUTT YADAV

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WRIT PETITION No.906/2019 (T-RES)

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Between:

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PepsiCo India Holdings Pvt. Ltd. 302, 3^rd Floor, Embassy Square, Infantry Road Opposite Police Commissioner's Office Bengaluru - 560 001 Represented herein by its Territory Development Manager Mr.Sathish.K (aged 46 years). … Petitioner

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(By Sri T.Suryanarayana, Advocate)

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And:

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The Deputy Commissioner of Commercial Taxes (Audit)-6.4 VAT Dvn-6 DGSTO-6, Bengaluru KIADB Building 3^rd Floor, 14^th Cross 2^nd Stage, Peenya Bengaluru 560 058. … Respondent

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(By Sri K.Hema Kumar, HCGP)

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This Writ Petition is filed under Articles 226 of the Constitution of India, praying to quash the impugned order dated 07.12.2018 and CAS passed by the respondent under Section 69 read with Section 39(1) of the Karnataka Value Added Tax Act,

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2003, for the tax periods April 2010 to March 2011 (Annexure-E) and quash the impugned demand notice 07.12.2018 bearing demand No.122180458.01 and CAS order No.20912953.03 issued by the respondent in Form VAT 180 for the tax periods April 2010 to March 2011 (Annexure-E1) and etc.

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This Writ Petition coming on for preliminary hearing in 'B' Group this day, the Court made the following:

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ORDER

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The petitioner has called in question the validity of the order dated 07.12.2018 at Annexure-E dated bearing No. DCCT(A)6.4/18-19, T.No.947/18-19 and CAS No. 20912953.03 passed by the respondent under Section 69 read with Section 39(1) of the Karnataka Value Added Act, 2003 ['KVAT Act'] for the tax period April 2010 to March 2011. The petitioner has also sought for quashing of the impugned demand notice dated 07.12.2018 bearing Demand No.122180458.01 and CAS Order No.20912953.03 issued by the respondent in VAT 180 for the tax period April 2010 to March 2011 at Annexure-E1.

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The petitioner submits that the notice came to be issued on 01.12.2018 under Section 69 read with subsection (1) of Section 39 of the KVAT Act, 2003. It is stated

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that as per the notice at Annexure-C, the petitioner was granted time of seven days from the date of receipt of notice to file the objections, if any.

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The petitioner submits that the reply came to be made out on 10.12.2018 at Annexure-D while, specifically asserting at the time of hearing of the matter that notice was received on 03.12.2018. The pleading as regards the said assertion is found in para-(ii)(5) of the petition. It is pointed out that the order at Annexure-E dated 07.12.2018 has been passed without considering the reply at Annexure-D dated 10.12.2018, as the said reply was filed within a period of seven days from the date of receipt of notice. Hence, it is submitted that the impugned order is liable to be set aside as being in violation of principles of natural justice.

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It is also contended that the order that is passed is clearly beyond the power conferred under Section 69 of KVAT Act, which provides for rectification of mistakes. Various contentions have been raised in effort to point out

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that the impugned order passed is in the nature of re-assessment which is beyond the power conferred under Section 69 of the KVAT Act.

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Insofar as the contention that the order has been passed in violation of principles of natural justice, clearly, the learned counsel for the Revenue is not in a position to contravert such assertion, as notice is issued on 01.12.2018 and the order is passed on 07.12.2018. Even if the notice was served on 01.12.2018, seven days' clear days ought to have been provided for filing of the reply and if that were to be so, the first date, i.e. 01.12.2018 ought to have been excluded while calculating the period of seven days.

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Hence, the impugned order at Annexure-E is liable to be set aside and is accordingly set aside while directing an opportunity to be afforded to the respondent of personal hearing before arriving at a decision, after considering the reply furnished. The consequential demand notice at Annexure-E1 is set aside.

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Needless to state that the reply already made by

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the petitioner at Annexure-D is to be taken note of and the scope of power under Section 69 of the KVAT Act needs to be kept in mind while passing the order afresh.

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The petitioner to appear before the respondent on 09.04.2021 without waiting for fresh notice.

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This petition is accordingly disposed off.

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Sd/JUDGE

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VGR

Pepsico India Holdings Pvt. Ltd. v. the Deputy Commissioner of Commercial Taxes

Case brief

What is this about?

What did the court decide?

Pepsico India Holdings Pvt. Ltd. v. the Deputy Commissioner of Commercial Taxes

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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