THE COMMISSIONER OF INCOME-TAX vs. M/S ENDEKA CERAMICS PVT. LTD.

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 07TH DAY OF DECEMBER 2020 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’BLE MR. JUSTICE H.T.NARENDRA PRASAD S.T.R.P. NO.71 OF 2014 C/W S.T.R.P.NO.68/2014, S.T.R.P.NO.69/2014, S.T.R.P.NO 70/2014 & S.T.R.P.NO.72/2014 S.T.R.P.NO.71/2014: BETWEEN: WIPRO LIMITED INFOTECH GROUP 146, BELAGOLA INDUSTRIAL AREA METAGALLI, MYSORE - 560 016 REPRESENTED BY ITS REGIONAL FINANCE AND ACCOUNTS MANAGER SRI. B.C. SHASHIDHARA. ... PETITIONER (BY SRI. VENKATESH S ARBATTI, ADV.,) AND: THE STATE OF KARNATAKA REPRESENTED BY THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES(TRANSITION-I) MYSORE - 560 016. ... RESPONDENT (BY SRI. VIKRAM HUILGOL, AGA) - - - THIS STRP IS FILED UNDER SECTION 23(1) OF KARNATAKA SALES TAX ACT, AGAINST THE JUDGMENT AND ORDER DATED: 17.07.2013 PASSED IN 1235 TO 1239/2008 ON THE FILED OF THE

2 KARNATAKA APPELLATE TRIBUNAL, BENGALURU, DISMISSING THE APPEALS AND ETC. S.T.R.P.NO.68/2014: BETWEEN: WIPRO LIMITED INFOTECH GROUP 146, BELAGOLA INDUSTRIAL AREA METAGALLIM, MYSORE - 560 016, REPRESENTED BY ITS, REGIONAL FINANCE AND ACCOUNTS MANAGER, SRI.B.C.SHASHIDHARA. ... PETITIONER (BY SRI. VENKATESH S ARBATTI, ADV.,) AND: THE STATE OF KARNATAKA REPRESENTED BY THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES (TRANSITION-I), MYSORE - 560 016 ... RESPONDENT (BY SRI. VIKRAM HUILGOL, AGA) - - - THIS STRP IS FILED UNDER SECTION 23(1) OF KARNATAKA SALES TAX ACT, AGAINST THE JUDGMENT AND ORDER DATED: 17.07.2013 PASSED IN 1235 TO 1239/2008 (THIS STRP PERTAINS TO STA NO.1235/08 ONLY) ON THE FILED OF THE KARNATAKA APPELLATE TRIBUNAL, BENGALURU, DISMISSING THE APPEALS FILED UNDER SECTION 22(1) KARNATAKA SALES TAX ACT 1957. S.T.R.P.NO.69/2014: BETWEEN: WIPRO LIMITED INFOTECH GROUP 146, BELAGOLA INDUSTRIAL AREA METAGALLIM, MYSORE - 560 016, REPRESENTED BY ITS, REGIONAL FINANCE AND ACCOUNTS MANAGER,

3 SRI.B.C.SHASHIDHARA. ... PETITIONER (BY SRI. VENKATESH S ARBATTI, ADV.,) AND: THE STATE OF KARNATAKA REPRESENTED BY THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES (TRANSITION-I), MYSORE - 560 016 ... RESPONDENT (BY SRI. VIKRAM HUILGOL, AGA) - - - THIS STRP IS FILED UNDER SECTION 23(1) OF KARNATAKA SALES TAX ACT, AGAINST THE JUDGMENT AND ORDER DATED: 17.07.2013 PASSED IN 1235 TO 1239/2008 THE ABOVE STRP PERTAINS TO STA 1237/2008 ON THE FILED OF THE KARNATAKA APPELLATE TRIBUNAL, BENGALURU, DISMISSING THE APPEALS FILED UNDER SECTION 22(1) KARNATAKA SALES TAX ACT. S.T.R.P.NO.70/2014: BETWEEN: WIPRO LIMITED INFOTECH GROUP 146, BELAGOLA INDUSTRIAL AREA METAGALLIM, MYSORE - 560 016, REPRESENTED BY ITS, REGIONAL FINANCE AND ACCOUNTS MANAGER, SRI.B.C.SHASHIDHARA. ... PETITIONER (BY SRI. VENKATESH S ARBATTI, ADV.,) AND: THE STATE OF KARNATAKA REPRESENTED BY THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES (TRANSITION-I), MYSORE - 560 016 ... RESPONDENT (BY SRI. VIKRAM HUILGOL, AGA)

4 THIS STRP IS FILED UNDER SECTION 23(1) OF KARNATAKA SALES TAX ACT, AGAINST THE JUDGMENT AND ORDER DATED: 17.07.2013 PASSED IN 1235 TO 1239/2008 ON THE FILED OF THE KARNATAKA APPELLATE TRIBUNAL, BENGALURU, DISMISSING THE APPEALS AND ETC. S.T.R.P.NO.72/2014: BETWEEN: WIPRO LIMITED INFOTECH GROUP 146, BELAGOLA INDUSTRIAL AREA METAGALLIM, MYSORE - 560 016, REPRESENTED BY ITS, REGIONAL FINANCE AND ACCOUNTS MANAGER, SRI.B.C.SHASHIDHARA. ... PETITIONER (BY SRI. VENKATESH S ARBATTI, ADV.,) AND: THE STATE OF KARNATAKA REPRESENTED BY THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES (TRANSITION-I), MYSORE - 560 016 ... RESPONDENT (BY SRI. VIKRAM HUILGOL, AGA) - - - THIS STRP IS FILED UNDER SECTION 23(1) OF KARNATAKA SALES TAX ACT, AGAINST THE JUDGMENT AND ORDER DATED: 17.07.2013 PASSED IN 1235 TO 1239/2008 ON THE FILED OF THE KARNATAKA APPELLATE TRIBUNAL, BENGALURU, DISMISSING THE APPEALS. THESE STRPs COMING ON FOR FURTHER HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING: COMMON ORDER These revision petitions have been filed under Section 23(1) of the Karnataka Sales Tax Act, 1957

5 (hereinafter referred to as the Act for short) by the petitioner against the judgment dated 17.07.2013 passed by the Karnataka Appellate Tribunal (KAT) (hereinafter referred to as 'the tribunal' for short). Since, all the revision petitions arise out of the same judgment passed by the tribunal and similar issues arise for consideration in all the petitions, they were heard analogously and are being decided by this common judgment. 2. Facts leading to filing of these revision petitions briefly stated are that the petitioner is a dealer registered under the Act as well as Central Sales Tax Act, 1956 and is engaged in the business of manufacture and sales of computer and computer peripherals. The subject matter of STRP No.62/2014 is Assessment Year 2002-03, whereas, subject matter of the STRP No.69/2014 & 70/2014 is Assessment Year 2003-04. The subject matter of STRP No.71/2014 and 72/2014 is Assessment Year 2004-05. The petitioner

6 had filed the return in Form No.4 under the Act for the Assessment Years. Since, there were mistakes in the annual returns in Form No.4, therefore, petitioner filed revised returns in Form No.4. The particulars of which are reproduced below for the facility of reference: Assessment Year Date of Filing Form 4 Date of filing Revised Form 4 2002-03 30.05.2003 12.04.2006 2003-04 30.05.2004 19.08.2006 2004-05 30.05.2005 30.05.2006 3. The assessing authority passed deemed assessment order under Section 12C(8) of the Act in terms of Notification No.FD 116 CSL 2006(3) dated 31.03.2006 without considering the revised return filed by the petitioner which was filed before the deemed acceptance of the annual returns. Since, the order passed by the Assessing Officer suffered from an error apparent on the face of the record, the petitioner filed an application for rectification under Section 25A of the Act seeking to rectify the deemed assessment order passed under Section 12C(8) of the Act, in which prayer

7 was made to accept the revised returns filed before the deemed assessment orders. However, the assessing authority rejected the applications for the Assessment Years 2002-03, 2003-04 and 2004-05, by orders dated 31.10.2007, 21.01.2008 and 05.01.2008 respectively. 4. The petitioner thereupon filed an appeal before the first appellate authority. The first appellate authority by orders dated 09.07.2008, 10.07.2008 and 11.07.2008 passed in respect of Assessment Years 2002-03, 2003-04 and 2004-05 partly allowed the appeal in relation to a very small question of statutory forms and dismissed the appeals filed by the petitioner in relation to all other grounds including the ground of deemed acceptance of the applications for rectification. The petitioner thereupon filed an appeal before the tribunal. The tribunal by an order dated 17.07.2013 dismissed the appeals preferred by the petitioner and maintained the orders passed by the assessing authority as well as the first appellate authority. In the aforesaid

8 factual background, the petitioner has filed these revisions under Section 23(1) of the Act. 5. Learned counsel for the petitioner submitted that the order rejecting the applications for rectification preferred by the petitioner is per se without jurisdiction in terms of Section 25A of the Act as the same has been filed beyond a period of 60 days from the date of filing of the application. It is also submitted that if an order is not passed within a period of 60 days, the application for rectification is deemed to have accepted. It is also submitted that the assessing authority grossly erred in taking into account the original return, whereas, it ought to have taken into account the revised returns filed by the petitioner. In support of aforesaid submissions, reliance has been placed on Notification dated 31.03.2006 issued under Section 12C(8) of the Act as well as decision of this court in 'SBEE CABLES (INIDA) LIMITED, BANGALORE VS. THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES,

9 TRANSITION-33 AND RECOVERY DIVISIONS I AND III, BANGALORE,L (2008) 65 KAR. L.J. 161(HC), and 'DHAMPUR SUGAR MILLS LTD. VS. COMMISSIONER OF INCOME TAX', 90 ITR 236 (All). 6. On the other hand, learned Additional Government Advocate has submitted that the Act as stood then did not have a provision for filing revised return and therefore, the applications for rectifications filed by the petitioner could not have been entertained as the same would amount to indirectly revising the return in the absence of any provision in the Act. It is further submitted that the petitions do not involve any questions of law and the same stands concluded against the petitioner by findings of fact. It is also pointed out that none of the issues raised by the petitioner can be termed as questions of law and the tribunal by a reasoned and detailed order has decided against the

10 petitioner and therefore, the petitions are liable to be dismissed. 7. We have considered the submissions made by learned counsel for the parties and have perused the record. Admittedly, in the case of the petitioner, the orders have been passed under Section 12C(8) of the Act. Section 12-C(2) of the Act provides that where before completion of self assessment,

returns submitted or any compliance furnished under sub- Section (1) is found to involve mistake apparent on record, the assessing authority shall afford an opportunity to the dealer to submit revised return or to rectify such mistake. Thus, it is evident that the provision for filing the revised return was in existence in the statute. It is trite law that once a revised return is filed, the original return must be taken to have been withdrawn and to have been substituted by a fresh return for the purposes of assessment. Section 25-A of the Act deals with rectification of the mistake. The

11 second proviso to Section 25-A of the Act, which is relevant for the purposes of controversy involved in the instant petition, is reproduced below for facility of reference: Provided further that where an application is made by an assessee for rectification of any mistake in an order, as being apparent from the record and such application has not been rejected by the assessing authority within sixty days from the date of receipt of the application, the order shall be deemed to have been amended rectifying such mistake. 8. Admittedly, in the instant case, it is not in dispute that the assessing authority passed an order taking into account the original return instead of revised return on 31.05.2006, 28.08.2006 and 31.08.2006. The petitioner had filed the revised returns in Form No.4 on 12.04.2006, 19.08.2006 and 30.05.2006. Therefore, in view of second proviso to Section 25A of the Act, on expiry of sixty days, the revised return should have

12 been deemed to have been accepted. However, after a period of sixty days, the adjudicating authority passed an order on 31.10.2007, 21.01.2008, and 05.01.2008, which were per se without jurisdiction. The aforesaid aspect of the matter was neither considered by first appellate authority nor by the tribunal. The tribunal has decided the question of law erroneously, which arose for its consideration. In view of preceding analysis, the orders of rectification dated 31.10.2007, 21.01.2008 and 05.01.2008 passed by the adjudicating authority, orders dated 09.07.2008, 10.07.2008 and 11.07.2008 passed by the first appellate authority and order dated 17.07.2013 passed by the tribunal are hereby quashed. In the result, the revisions are allowed. Sd/- JUDGE Sd/- JUDGE ss