M/S Krita Engineering PVT.LTD vs. The Union Of INDIA
Held
The Court held that the recovery notices (Annexures-L and P) and the consequent garnishee notice were issued prima facie ignoring the fact that the petitioner had paid the tax liability. The Court found merit in the petitioner's submission that the tax liability was paid in December 2013, and its omission from the returns filed on April 25, 2014, was an inadvertent error. Consequently, the Court set aside Annexures-L and P. The Court directed the concerned authority to examine the petitioner's grievance stated in Annexure-F dated December 22, 2018, and pass a speaking order within two months. The ratio decidendi is that recovery actions should not be initiated without proper verification of tax payment, especially when a plausible explanation for non-reflection in returns is provided.
Facts
The petitioner, M/s Krita Engineering Pvt. Ltd., filed a writ petition challenging two recovery notices (Annexures-L and P) and a garnishee notice issued by the Assistant Commissioner of Central Tax (Respondent No. 3). The petitioner contended that while a tax liability for the year 2013-14 was paid in December 2013, it was inadvertently not reflected in the returns filed on April 25, 2014. The revenue authorities issued recovery notices despite this payment, leading to the present petition seeking to quash these notices and for adjudication proceedings to be conducted in accordance with natural justice.
Key Issues
1. Whether the recovery notices (Annexures-L and P) and the consequent garnishee notice issued by the Assistant Commissioner of Central Tax are illegal and untenable in law, considering the petitioner's claim of having paid the tax liability for the year 2013-14, despite it not being reflected in the returns filed on April 25, 2014? Petitioner's contention: The tax liability for the year 2013-14 was paid in December 2013, and its non-reflection in the returns filed on April 25, 2014, was an inadvertent error. Therefore, the subsequent recovery and garnishee notices are illegal. Revenue's contention: The judgment does not record any specific arguments made by the revenue or state respondents regarding the validity of the recovery notices or the petitioner's claim of payment.
Sections Cited
Articles 226, 227
AI-generated summary — verify with the full judgment below
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5TH DAY OF AUGUST, 2019 BEFORE THE HON’BLE MR. JUSTICE P.B.BAJANTHRI WRIT PETITION NO. 27339/2019 (T-RES) BETWEEN:
M/S KRITA ENGINEERING PVT. LTD., 430/431, 12TH CROSS, 4TH PHASE, PEENYA INDUSTRIAL ESTATE, BANGALORE - 560 058, KARNATAKA. (REPRESENTED BY SHRI MAINAK BISWAS GENERAL MANAGER-FINANCE) ... PETITIONER
(BY SRI R. DAKSHINA MURTHY AND SRI K.S. NAVEEN KUMAR, ADVOCATES)
AND:
THE UNION OF INDIA, MINISTRY OF FINANCE, NORTH BLOCK, NEW DELHI-110 001, (REPRESENTED BY ITS SECRETARY).
THE COMMISSIONER OF CENTRAL TAX, BANGALORE NORTH WEST GST COMMISSIONERATE, 2ND FLOOR, BMTC BUS STAND COMPLEX, SHIVAJINAGAR, BENGALURU - 560 051. 2
THE ASSISTANT COMMISSIONER OF CENTRAL TAX DIVISION-1, BANGALORE NORTH WEST GST COMMISSIONERATE, 2ND FLOOR, BMTC BUS STAND COMPLEX, SHIVAJINAGAR, BENGALURU - 560 051. 4. THE ASSISTANT COMMISSIONER OF CENTRAL TAX CIRCLE-IV, OFFICE OF THE COMMISSIONER OF CENTRAL TAX, AUDIT II COMMISSIONERATE, JSS TOWERS, 100 FEET RING ROAD, BANASHANKARI III STAGE, BENGALURU - 560 085. 5. THE STATE BA
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