M/S Dhruva Enterprises vs. State Of Karnataka

The petitioner is claiming to be a partnership concern engaged in trading of Iron Ore Fines and coffee beans being registered as a dealer under the provisions of the Karnataka Value Added Tax Act, 2003 ['Act' for short]. It appears that during the tax periods 2008-09 onwards, the petitioners has purchased Iron Ore Fines from the parties at the rate ranging from Rs.1425/- to Rs.2650/- per metric ton and filed the return of turnover in VAT-100 and paid the applicable taxes thereon and also claimed input tax credit on the purchases made thereto. The respondent No.3 concluded the re-assessment proceedings under Section 39[1] of the Act after issuing notice to the petitioner and restricted the input tax credit availed by the petitioner on the alleged ground that the input tax availed requires to be worked out as provided under Section 19[1] of the Act. Against which the petitioner filed an appeal pursuant to the directions issued by this Court in W.P.No.57213/2016 [D.D. 24.03.2017] which came to be dismissed though observing that Section 11[9][d] of the Act would come into effect from 01.04.2015 where it is specified that any dealer has sold goods at lesser price than the price of such goods purchased by him the amount of input tax credit shall be restricted to the amount of output tax of such goods.

However, the petitioner’s case being of the year 2014-15, on further representation made before the authorities, the same has been rejected in as much as the input tax credit claimed under Section 19[1] of the Act, observing that the appellate Authority has dismissed the appeal filed by the assessee/petitioner. Being aggrieved by the same, the petitioner is before this Court.

Learned counsel Sri.K.M.Shivayogiswamy appearing for the petitioner reiterating the grounds urged in the writ petition submitted that interpretation given by the assessing officer passed by the first appellate authority is ex-facie erroneous and requires interference by this Court.

Learned counsel Sri.T.K.Vedamurthy, appearing for the Revenue supports the impugned order and would submit that without availing the alternative remedy available under the Act, the petitioner has rushed to this Court and hence the writ petition deserves to be dismissed.

Having heard the learned counsel for the respective parties and perusing the material on record, this court is of the considered view that the grievance of the petitioner can be very well considered by the Tribunal exercising the appellate juri iction under the provisions of the Act; ordinarily, the writ petition filed by the petitioner circumventing the appellate remedy is not maintainable. However, considering the peculiar facts of the case relating to the interpretation of the order of the first appellate authority by the Assessing Officer, the same requires a clarification by the first appellate authority.