Disposed

Sri. Ramdas M v. the State of Karnataka

Karnataka HC23 Nov 2023WP/24137/2023

Case brief

AI extract

What is this about?

In this preliminary hearing on a writ petition seeking to quash an endorsement directing payment of VAT arrears under the KVAT Act, the Karnataka High Court directed the authorities to issue a notice to the petitioner before recovering amounts from garnishees, affording him an opportunity to demonstrate deductions made on his bills.

What did the court decide?

Directing the authorities to issue a notice to the petitioner before initiating recovery measures from garnishees to afford an opportunity to demonstrate bill deductions.

Sri. Ramdas M Vs the State of Karnataka — Cheque Dishonour | Karnataka HC (2023)

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NC: 2023:KHC:42161 WP No. 24137 of 2023

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 23^RD DAY OF NOVEMBER, 2023 BEFORE

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THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 24137 OF 2023 (T-RES)

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BETWEEN:

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SRI. RAMDAS M S/O SRI CHIKKA MUNIYAPPA AGED ABOUT 52 YERS, R/AT CHOKKADODDI VILLAGE TAYALUR HOBLI, MULBAGAL TALUK, KOLAR DISTRICT - 563131.

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…PETITIONER

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(BY SRI. MUNIRAJA M.,ADVOCATE)

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AND:

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Digitally signed by NARASIMHA MURTHY VANAMALA Location: HIGH COURT OF KARNATAKA

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THE STATE OF KARNATAKA DEPARTMENT OF FINANCE VIDHANA SOUDHA AMBEDKAR VEEDHI BENGALURU 560001 REPRESENTED BY ITS SECRETARY.

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THE COMMISSIONER COMMERCIAL TAX DEPARTMENT VANIJYA THERIGE KARYALAYA 1^ST MAIN ROAD KALIDASA MARG GANDHI NAGAR, BENGALURU- 560027.

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THE COMMERCIAL TAX OFFICER AUDIT AND RECOVERY BINDU NEW EXTENSION

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2^ND CROSS NEAR DOME LIGHT CIRCLE, BANGARPETE – 563101.

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NC: 2023:KHC:42161 WP No. 24137 of 2023

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THE COMMISSIONER DEPARTMENT OF RURAL DEVELOPMENT AND PANCHAYATH RAJ NO 1234, 5^TH FLOOR KSSIDC, IT PARK, SOUTH BLOCK, RAJAJINAGAR INDUSTRIAL ESTATE BENGALURU 560010.

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THE CHIEF EXECUTIVE OFFICER ZILLA PANCHAYATH KOLAR, KOLAR DISTRICT 563101.

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PICHHGUNTALAHALLI GRAM PANCHAYATH PICHHAGUNTALAHALLI VILLAGE, MULABAGAL TALUK KOLAR DISTRICT - 563131. REP BY ITS PANCHAYATH DEVELOPMENT OFFICER.

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BALLA GRAM PANCHAYATH BALLA VILLAGE, MULABAGAL TALUK KOLAR DISTRICT - 563101 REP BY ITS PANCHAYATH DEVELOPMENT OFFICER.

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MUDIGENNUR GRAM PANCHAYATH MUDIGENUR VILLAGE, MULABAGAL TALUK KOLAR DISTRICT - 563131 REP BY ITS PANCHAYATH DEVELOPMENT OFFICER.

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UTTANURU GRAM PANCHAYATH UTTANURU VILLAGE, MULABAGAL TALUK KOLAR DISTRICT - 563127

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NC: 2023:KHC:42161 WP No. 24137 of 2023

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REP BY ITS PANCHAYATH DEVELOPMENT OFFICER.

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…RESPONDENTS

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(BY SRI.SHAMANTH NAIK., HCGP FOR R1 TO R4)

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THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ENDORSEMENT DATED 05/08/2023 VIDE NO. CTO(AUDIT)KOLAR/T265/2023-24 ISSUED BY THE R3 FOR PAYMENT OF ARREARS OF TAX/VAT UNDER PROVISIONS OF THE KARNATAKA VALUE ADDED TAX ACT, 2003 (KVAT) AS PER ANNEXURE-A.

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The petitioner has impugned the Endorsement dated 05.08.2022 [ Annexure – A ] issued by the third respondent informing the petitioner that he could avail the benefits of ‘ Karsamadhana Scheme 2023’ to discharge the liabilities under the Karnataka Value Added Tax Act, 2003 [ KVAT Act ] as this Scheme provides 100% of waiver of interest and penalty. The petition is also informed that he could avail the benefit of this Scheme for the assessment years 2015-16 and 2016-17.

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NC: 2023:KHC:42161 WP No. 24137 of 2023

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The petitioner is a registered dealer and he

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has extended certain supplies to various Gram Panchayaths under the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 during the aforesaid period. According to the petitioner, the concerned have settled his Bills after deducting the appropriate amount towards VAT, and there is also communication by the second respondent with the concerned department of the State Government as regards the VAT deducted from his Bills but without further remittances. There are also others who are similarly placed, and the Communication relates to all the affected.

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The learned counsel for the petitioner argues that if the VAT payable is already deducted and there is communication inter se the departments about the same as not being credited, it will have to be sorted out by the concerned and the petitioner cannot be called upon to avail the benefit of the

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5 - NC: 2023:KHC:42161 WP No. 24137 of 2023

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aforesaid Scheme on the ground that there is outstanding towards VAT payable for the assessment years 2015-16 and 2016-17. The learned counsel further submits that in the case of some of similarly placed registered dealers, notices as contemplated under Section 45(1) of the KVAT Act are issued, and this Court has disposed of the writ petitions filed impugning such notices directing the concerned to extend an opportunity before any coercive measure is taken.

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Sri Shamanth Naik, the learned High Court Government Pleader, submits that if indeed the VAT payable has been deducted by the concerned and liability duly ascertained under the provisions of the KVAT Act, the petitioner should avail statutory remedy against the corresponding assessment orders and he cannot approach this Court impugning the Endorsement dated 05.08.2023. Sri Shamanth Naik also submits that even if the petitioner can rely upon

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6 - NC: 2023:KHC:42161 WP No. 24137 of 2023

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the present annexures to assert that there is deduction of VAT, the deduction is not according to the notified rate and therefore, the petition must be disposed of directing the petitioner to avail alternative remedy subject to all just exceptions.

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The rival submissions are considered and it is seen that the respondents cannot seriously contest that certain deductions have been made from the petitioner’s Bills towards VAT and that there is no reference to the same in the impugned Endorsement. Further, it is seen from the Communication dated 31.01.2023 addressed by the Commissioner to the concerned Additional Chief Secretary that there is a reference to the deductions made towards VAT but without further remittances. In the peculiarities of this case, this Court must opine that if the concerned proposed to initiate proceedings against the petitioner for recovery of any VAT, the concerned must extend an opportunity to the petitioner to demonstrate the

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NC: 2023:KHC:42161 WP No. 24137 of 2023

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deductions made and the consequential

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repercussions before such proceedings are initiated.

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Therefore, it would be appropriate to dispose of this petition observing that, though the petitioner may not have filed necessary appeals, the concerned must issue notice to the petitioner before measures are initiated to recover the amounts from the garnishees so that the petitioner will have a reasonable opportunity to demonstrate the deduction from the Bills and the repercussions thereof.

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The petition stands disposed of accordingly.

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Sd/JUDGE

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SA ct:sr

Sri. Ramdas M v. the State of Karnataka

Case brief

What is this about?

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Sri. Ramdas M v. the State of Karnataka

Case brief

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