M/S Suma Oil Agencies vs. The Commissioner Of Commercial Taxes

Held

The Court held that the ex-parte reassessment order dated February 20, 2018, and the consequential demand notice dated October 3, 2018, passed by respondent No.2 for the tax period 2012-2013 were liable to be set aside. The reasoning was that the petitioner had appeared before DCCT (Audit)-5.2 pursuant to a reassessment notice for the same period. If the jurisdiction lay with DCCT (Audit)-5.2, that authority ought to have transferred the proceedings to the competent authority assigned with the jurisdiction. Since this was not done, and the petitioner was made to suffer, the ex-parte order was unsustainable. The Court found that the assignment of jurisdiction was not clear amongst the concerned authorities. The Court set aside the impugned orders and remitted the proceedings to respondent No.2 to redo the assessment after providing an opportunity of hearing to the petitioner. The petitioner was directed to appear before respondent No.2 on August 5, 2019, with their reply/objections, and respondent No.2 was ordered to conclude the reassessment expeditiously.

Facts

The petitioner, M/s. Suma Oil Agencies, a registered dealer under the Karnataka Value Added Tax (KVAT) Act, 2003, challenged an ex-parte reassessment order dated February 20, 2018, and a consequential demand notice dated October 3, 2018, passed by the Deputy Commissioner of Commercial Taxes (Audit)-5.5 (respondent No.2). These orders pertained to the tax period 2012-2013. The petitioner had previously responded to a reassessment notice issued by Deputy Commissioner of Commercial Taxes (Audit)-5.2 for the same period and produced books of accounts. Subsequently, respondent No.2 issued another reassessment notice. The petitioner brought the prior notice from respondent No.2's counterpart to the attention of respondent No.2. Despite this, respondent No.2 proceeded to pass an ex-parte order.

Key Issues

1. Whether the reassessment order dated 20.02.2018 and demand notice dated 03.10.2018 passed by respondent No.2 under the KVAT Act for the tax period 2012-2013 are liable to be quashed on the grounds of being ex-parte and passed without proper jurisdiction or opportunity to the petitioner? Petitioner's arguments: The petitioner contended that the reassessment order was passed ex-parte despite their appearance before another authority (DCCT Audit-5.2) for the same tax period. They argued that the assignment of jurisdiction for the tax period 2012-2013 was unclear amongst the concerned authorities, leading to the petitioner being made to suffer. They relied on the fact that they had responded to the earlier notice and produced documents. Revenue's arguments: The judgment does not record any specific arguments made by the revenue or state.