Allowed

Ald Automotive Private Limited v. Assistant Commissioner of

Karnataka HC20 Mar 2024WP/3685/2024

Case brief

AI extract

What is this about?

Writ petitions challenging reassessment orders and demand notices under the KVAT Act for tax periods 2006-09 concerning availment of input tax credit on belated returns. The court, following the Division Bench judgment in the BEML case confirmed by the Supreme Court, quashed the appellate orders, reassessment orders and demand notices and directed respondents to drop further proceedings.

What did the court decide?

Appellate orders, reassessment orders and demand notices quashed/set aside; respondents directed to drop all further proceedings; WP 15057/2021 disposed of as not surviving.

Ald Automotive Private Limited Vs Assistant Commissioner of — Income Tax | Karnataka HC (2024)

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NC: 2024:KHC:11752 WP No. 3685 of 2024 C/W WP No. 15057 of 2021

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20^TH DAY OF MARCH, 2024

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BEFORE

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THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR

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WRIT PETITION NO.3685 OF 2024 (T-RES)

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C/W

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WRIT PETITION NO.15057 OF 2021(T-RES)

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IN WP NO.3685/2024:

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BETWEEN:

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Digitally signed by H K HEMA Location: High Court of Karnataka

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ALD AUTOMOTIVE PRIVATE LIMITED A COMPANY REGISTERED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT UNIT NO.1802, TOWER-A OF PENINSULA BUSINESS PARK,GANAPTRAO KADAM MARG LOWER PAREL, MUMBAI-400 013 ALSO HAVING OFFICE AT: P.B. NO.11635, NARIMAN POINT 13TH FLOOR, MAKER CHAMBER-IV MUMBAI-400 021 REPRESENTED HEREIN BY ITS ASSISTANT MANAGER-TAXATION BABU B.R.

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…PETITIONER

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(BY SRI T. SURYANARAYANA, SENIOR COUNSEL FOR SRI TANMAYEE RAJKUMAR, ADVOCATE)

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AND:

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ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT-1.5)

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NC: 2024:KHC:11752 WP No. 3685 of 2024 C/W WP No. 15057 of 2021

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DGSTO-1, 3RD FLOOR, TTMC, BMTC YESHWANTHAPURA

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BANGALORE-560 022.

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JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS )-3, TTMC 'B' BLOCK BMTC BUILDING, SHANTHINAGAR BENGALURU-560 027.

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STATE OF KARNATAKA REPRESENTED HEREIN BY THE PRINCIPAL SECRETARY-FINANCE DEPARTMENT MINISTRY OF FINANCE GOVERNMENT OF KARNATAKA VIDHANA SOUDHA BENGALURU-560 001.

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…RESPONDENTS

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(BY SRI HEMAKUMAR K., AGA)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ORDERS DATED 30.10.2023 BEARING CAS ORDER NO.875/2023-24 FOR THE TAX PERIOD 2008-09 (ANNEXUREP3) AND 31.10.2023 BEARING CAS ORDER NOS. 890/2023-24 AND 891/2023-24 FOR THE TAX PERIODS 2007-08 AND 200607 RESPECTIVELY (ANNEXURES-P1 AND P2) PASSED BY THE RESPONDENT NO.2 UNDER SECTION 62(6) OF THE KVAT ACT AND ETC.

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IN WP NO.15057/2021:

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BETWEEN:

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ALD AUTOMOTIVE PRIVATE LIMITED A COMPANY REGISTERED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT UNIT NO.1802, TOWER-A OF PENINSULA BUSINESS PARK,GANAPTRAO KADAM MARG LOWER PAREL, MUMBAI - 400 013

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NC: 2024:KHC:11752 WP No. 3685 of 2024 C/W WP No. 15057 of 2021

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ALSO HAVING OFFICE AT: P.B. NO.11635, NARIMAN POINT 13TH FLOOR, MAKER CHAMBER-IV MUMBAI-400 021 REPRESENTED HEREIN BY ITS ASSISTANT MANAGER-TAXATION BABU B.R.

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…PETITIONER

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(BY SRI T. SURYANARAYANA, SENIOR COUNSEL)

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AND:

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ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT-1.5) DGSTO-1, 3RD FLOOR, TTMC, BMTC YESHWANTHAPURA BANGALORE-560 022.

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…RESPONDENT

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(BY SRI HEMA KUMAR K., AGA)

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THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ORDER DATED 20.07.2021 (ANNEXURE-A) PASSED BY THE RESPONDENT FOR THE TAX PERIODS 2006-07 TO 2008-09 UNDER SECTION 69(1) OF THE KVAT ACT AND ALLOWING THE RECTIFICATION APPLICATIONS DATED 09.12.2020 (ANNEXURE-N-1 TO N-3) FILED BY THE PETITIONER FOR THE TAX PERIODS 2006-07 TO 2008-09 UNDER SECTION 69(1) OF THE KVAT ACT AND DIRECTING THE RESPONDENT TO ISSUE REVISED DEMAND NOTICES FOR THE SAID TAX PERIODS THEREOF AND ETC.

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THESE PETITIONS COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:

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4 - NC: 2024:KHC:11752 WP No. 3685 of 2024 C/W WP No. 15057 of 2021

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ORDER

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In WP No.3685/2024, the petitioner seeks for the following reliefs:

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"(i) quashing the orders dated 30.10.2023 bearing CAS Order No.875/2023-24 for the tax period 2008-09 (Annexure - P3) , and 31.10.2023 bearing CAS Order Nos.890/2023-24 and 891/2023-24 for the tax periods 2007-08 and 2006-07 respectively (Annexures - P1 and P2) passed by the 2nd Respondent under section 62(6) of the KVAT Act;

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(ii) quashing the orders dated 26.11.2020 bearing CAS Order Nos.305364296 and 331364321 for the tax periods 2006-07 and 2007-08 respectively (Annexure - H1 and H2) and 27.11.2020 bearing CAS Order No.376364562 for the tax period 2008-09 (Annexure - H3) , passed by the 1^st Respondent under section 39(2) r.w.s 36(1) and 72(2) of the KVAT Act;

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(iii) quashing the demand notices dated 26.11.2020 bearing reference Nos.197788206 and 188788316 for the tax period 2006-07 and 2007-08 respectively (Annexure - J1 to J2) and 27.11.2020 bearing reference No.191788442 for the tax period 2008-09 (Annexure - J3) , issued by the 1^st Respondent under Rule 180(1) of the KVAT Rules; and

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(iv) passing such other or further orders as this Hon'ble Court may deem fit in the facts and circumstances of the case, in the interests of justice and equity.”

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NC: 2024:KHC:11752 WP No. 3685 of 2024 C/W WP No. 15057 of 2021

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In WP No.15057/2021, the petitioner seeks for the

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following reliefs:

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"(i) quashing the order dated 20.07.2021 (Annexure-A) passed by the Respondent for the tax periods 2006-07 to 2008-09 under section 69(1) of the KVAT Act;

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(ii) allowing the rectification applications dated 09.12.2020 (Annexure-N-1 to N-3) filed by the Petitioner for the tax periods 2006-07 to 2008-09 under section 69(1) of the KVAT Act and directing the Respondent to issue revised demand notices for the said tax periods thereof.

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in the alternative,

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(iii) directing the Respondent not to enforce the demands pursuant to the notices of demand bearing demand no.197788306 dated 26.11.2020 issued for the tax period 2006-07 (Annexure - M1), demand no.188788316 dated 26.11.2020 issued for the tax period 2007-08 (AnnexureM2) and demand no.191788442 dated 27.11.2020 issued for the tax period 2008-09 (Annexure - M3) until disposal of the appeals against the orders dated 26.11.2020 and 27.11.2020 by the JCCT(Appeals)

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(iv) passing such other or further orders as this Hon'ble Court may deem fit in the facts and circumstances of the case, in the interests of justice and equity."

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6 - NC: 2024:KHC:11752 WP No. 3685 of 2024 C/W WP No. 15057 of 2021

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Heard learned Senior Counsel for the petitioner and learned Additional Government Advocate for respondents and perused the material on record.

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In addition to reiterating the various contentions urged

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in the petitions and referring to the material on record, learned Senior counsel for the petitioner invited my attention to the re-assessment orders both dated 26.11.2020 at Annexures-'H1' and 'H2' and re-assessment order dated 27.11.2020 at Annexure-'H3' and demand notices both dated 26.11.2020 at Annexures-'J1' and 'J2' and demand notice dated 27.11.2020 at Annexure-'J3' in order to contend that the petitioner has challenged the same before the Joint Commissioner of Commercial Taxes (Appeals) which are pending adjudication. It is submitted that earlier in W.P.No.15057/2021, the petitioner has challenged the demand notices before the Joint Commissioner of Commercial Taxes (Appeals).

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It is contended that the said appeals were dismissed

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by the Joint Commissioner of Commercial Taxes (Appeals) - second respondent on 30.10.2023 and 31.10.2023 on the ground

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7 - NC: 2024:KHC:11752 WP No. 3685 of 2024 C/W WP No. 15057 of 2021

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that W.P.No.15057/2021 was pending adjudication before this Court. It is submitted that the issue involved in the appeals before the Joint Commissioner of Commercial Taxes (Appeals) is as regards availment of Input Tax Credit by filing belated returns and the said issue stands directly and squarely covered by the judgment of the Division Bench of this Court in S.T.R.P. No.234/2016 (M/s.Bharat Earth Movers Limited vs. The State of Karnataka, disposed of on 22.12.2022 at Bengaluru Bench) which was confirmed by the Apex Court in the case of The State of

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Karnataka Vs .M/s.Bharat Earth Movers Limited - SLP (C) No.53320/2023 dated 12.01.2024. It is therefore, submitted that in addition to setting aside the impugned orders of the Joint Commissioner of Commercial Taxes (Appeals), the impugned reassessment orders at Annexures-'H1' to 'H3' and consequent demand notices at Annexures - 'J1' to 'J3' also deserves to be set aside. It is submitted that as a consequence of setting aside the assessment orders and demand notices, W.P.No.15057/2021 may also be disposed of.

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Per contra, learned Additional Government Advocate appearing for the respondents does not dispute that the issue as

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8 - NC: 2024:KHC:11752 WP No. 3685 of 2024 C/W WP No. 15057 of 2021

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regards availment of Input Tax Credit is squarely covered by the judgment of this Court in BEML's case (supra) and appropriate orders may be passed in the present petitions also.

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As rightly contended by the learned Senior counsel appearing for the petitioner, in BEML's case (supra), the Division Bench held as under:-

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"31. Thus, in view of the above recorded findings, we respectfully agree with the opinion of the Hon'ble Single Judge. The law laid down in Collector of Central Excise, Pune v. Dai Ichi Karkaria Ltd (stated supra), has been time and again followed by the Hon'ble Supreme Court in several cases. Thus, it is settled that the input tax credit is an indefeasible right.

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32.The main issue is whether the assesses who have filed the returns belatedly are entitled for input credit or not. A plain reading of provision of Section 10(3) of the KVAT Act, 2003, shows that no time limit or restriction is prescribed for availing the input tax credit. In Dai Ichli Karkaria Ltd. (stated supra), the Apex Court has held that credit is indefeasible. The Modvat credit is similar to the Input Tax Credit in this case. Therefore, no exception can be taken to the view taken by the Hon'ble Single Judge that the Input Tax Credit cannot be denied on the anvil of the machinery provisions or the provisions relating to the time frame. Hence, in our considered view, the assesses shall be eligible to avail the

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NC: 2024:KHC:11752 WP No. 3685 of 2024 C/W WP No. 15057 of 2021

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input tax credit as and when the tax is paid by them, without any limitation of time.

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33. Hence, the following:

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ORDER

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(a) STRP No.234/2016 is allowed.

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(b) The questions are answered in favour of the assessee and against the Revenue."

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No costs."

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It is an undisputed fact that the aforesaid judgment of

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the Division Bench of this Court is confirmed by the Hon'ble Supreme Court in SLP (C) No.53320/2023.

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Under these circumstances, I am of the view that apart from setting aside the impugned orders passed by the Joint Commissioner of Commercial Taxes, the impugned reassessment orders at Annexures-'H1' to 'H3' and consequent demand notices at Annexures- 'J1' to 'J3' also deserves to be set aside.

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In the result, I pass the following:

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ORDER

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i. W.P.No.3685/2024 is hereby allowed .

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10 -

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NC: 2024:KHC:11752 WP No. 3685 of 2024 C/W WP No. 15057 of 2021

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ii. Annexures-'P1' and 'P2' both dated 31.10.2023 and Annexure-'P3' dated 30.10.2023 are hereby set aside.

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iii. So also Annexures-'H1' and 'H2' both dated 26.11.2020 and Annexure-'H3' dated 27.11.2020 and also Annexures-'J1' and 'J2' both dated 26.11.2020 and Annexure-'J3' dated 27.11.2020 are hereby quashed.

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iv. In view of disposal of W.P.No.3685/2024, W.P.No.15057/2021 does not survive for consideration any longer and the same is accordingly disposed of.

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v. The respondents are directed to drop all further proceedings against the petitioner pursuant to this order.

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vi. Pending interlocutory applications, if any, stand disposed of.

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Sd/JUDGE

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VMB

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List No.: 1 Sl No.: 21

Ald Automotive Private Limited v. Assistant Commissioner of

Case brief

What is this about?

What did the court decide?

Ald Automotive Private Limited v. Assistant Commissioner of

Case brief

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