M/S SRI RAMANJANEYA AGENCIES vs. STATE OF KARNATAKA

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 19TH DAY OF FEBRUARY, 2016 BEFORE THE HON’BLE MR. JUSTICE ANAND BYRAREDDY WRIT PETITION Nos.30149 OF 2015 AND 1924-1925 OF 2016 AND 9154-9186 OF 2016 (T-RES) BETWEEN: M/s. Sri Ramanjaneya Agencies, Represented by its Proprietor, Sri. T.H.Ramanjaneya, Aged about 48 years, Residing at Ballari Road, Pavagada 572 102, Tumakuru District. …PETITIONER

(By Shri P.N.Nanja Reddy, Advocate)

AND:

Represented by the Commissioner,

Department of Commercial Taxes,

Gandhinagar,

Bengaluru 560 009.

Department of Commercial Taxes,

BMTC Complex,

Shanthinagar,

Bengaluru 560 027.

(Audit and Recovery),

Department of Commercial Taxes,

Madhugiri 572 103,

Tumakuru District. …RESPONDENTS

(By Shri S.V.Giri Kumar, Additional Government Advocate for Respondents) *****

These Writ Petitions filed under Article 226 of the Constitution of India praying to quash the order dated 31.12.2014 (Annexure-D) order dated 9.1.2015 (Annexure-F) and the order dated 9.1.2015 (Annexure-H) passed by third respondent as the same are illegal, arbitrary and contrary to the Karnataka Value Added Tax Act, 2003 and in violation of principles of natural justice and etc;

These Writ Petitions coming on for Preliminary Hearing, this day, the court made the following:

O R D E R

Heard the learned counsel for the petitioner. Having regard to the circumstances of the case, the petitions are considered for final disposal.

3 The learned Government Advocate is directed to take notice for the respondents. 2. The petitioner is said to have enrolled as a dealer for trading of cement at Pavagada, Tumkur District. He had supplied building materials to the Grama Panchayath, Y.N. Hosakote and other Panchayaths in Pavagada Taluk to execute the work under the Mahatma Gandhi National Rural Employment Guaranteed Scheme for the projects conducted by Roppa and Y.N. Hosakote Grama Panchayaths, Pavagada Taluk for construction work. Payment made to the petitioner was through Banks. He had received only part payments from the Panchayaths for having supplied the building materials and for having provided labour services to the project work. The Panchayaths had deducted the sales tax, income tax and royalty from the payments due to the petitioner as well, and in turn it had also paid the tax amount so deducted from the account of the petitioner, to the Department. Therefore, the petitioner claims that he was not liable for any tax.

4 It is stated that the petitioner had filed a writ petition before this Court seeking a direction to the Panchayath to release the payments due to him, in W.P.No.28142/2013, which is said to be pending. In the meanwhile, Respondent No.3 is said to have passed an exparte order of assessment for the assessment year 2008-09 as on 31.12.2014, levying tax at Rs.76,625/- along with penalty of Rs.7,661/- and interest of Rs.79,929/-, totaling to a sum of Rs.1,64,215/-. Thereafter, yet another exparte order for the years 2009- 10 was passed demanding a total sum of Rs.16,89,533/- towards tax, penalty and interest put together. Further, on 9.1.2015, an exparte order for the assessment year 2010-11 also has been passed demanding a total amount of Rs.7,89,859/- towards tax, penalty and interest. The petitioner had also filed writ petitions in W.P.No.22899/2015 and W.P.No.22900/2015 seeking release of payments due from the Panchayath. Those writ petitions are pending.

5 It is the petitioner’s case that these payments which were due from the Panchayath have not been released even after a lapse of four years and therefore, the part payment made by the Panchayath after deducting sales tax, income tax and royalty in respect of the payments due to the petitioner as well and in spite of the same, the assessment orders for the years 2008-09, 2009- 10 and 2010-11 levying exorbitant tax though there was no turnover, is illegal. The order passed by the respondent is therefore without reference to the said glaring circumstance, and hence, the present petitions. The petitioner has not been given an opportunity of hearing and therefore, seeks that the impugned orders be quashed. 3. The learned Government Advocate would refute the allegation that no notice was served on the petitioner. The petitioner has been duly served and the records maintained by the Department would indicate that it has been acknowledged, in spite of which the petitioner alleges that they are exparte

6 orders. However, insofar as the contention that the petitioner had not received payments and that writ petitions are pending as regards release of such payments, is a circumstance which requires to be addressed. Therefore, the present writ petitions are allowed and remanded. But however, since it would certainly cause some inconvenience and hardship to the respondents, the petitioner shall pay a sum of Rs.5,000/- as costs. The impugned orders are quashed subject to the condition of the petitioner paying a sum of Rs.5,000/- to the Commercial Tax Department on the first date of hearing and the petitioner shall appear before the third respondent without any further notice, on 5.3.2016.

Sd/-

JUDGE