M/S Ideal Construction Company vs. The Commissioner Of Commercial Taxes In Karnataka - Karnataka High Court, 20 June 2019

Cause title — parties, addresses and appearances

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF JUNE 2019 BEFORE THE HON’BLE MRS. JUSTICE S. SUJATHA WRIT PETITION NO.25306/2019 (T-RES) BETWEEN: M/S. IDEAL CONSTRUCTION COMPANY NO.303, II BLOCK VIVEK PARADISE, II CROSS CHOWDESWARI TEMPLE STREET SIR C.V.RAMAN NAGAR BAIRASANDRA BANGALORE-560 093 REP. BY ITS MANAGING PARTNER SRI R.SARAVANA KUMAR AGED ABOUT 47 YEARS …PETITIONER (BY SRI K.M.SHIVAYOGISWAMY, ADVOCATE) AND: 1. THE COMMISSIONER OF COMMERCIAL TAXES IN KARNATAKA COMMERCIAL TAXES BUILDINGS GANDHINAGAR BANGALORE-560 009 2. THE COMMERCIAL TAX OFFICER (AUDIT)-5.5, VTK-II NEAR NGV, KORAMANGALA BANGALORE-560 047 …RESPONDENTS (BY SRI T.K.VEDAMURTHY, AGA) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE REASSESSMENT ORDER DATED 27.04.2019 (ANNEXURE-E) PASSED BY THE SECOND RESPONDENT AUTHORITY UNDER SECTION 39(1) OF THE KVAT ACT IN RELATION TO THE 2 ASSESSMENT PERIOD 2013-14 AND THE CONSEQUENTIAL DEMAND NOTICE DATED 27.04.2019 (ANNEXURE-F) ISSUED IN FORM-VAT-180 THERETO ETC. THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

O R D E R

Learned AGA accepts notice for the respondents.

The petitioner has challenged the re-assessment order passed by respondent No.2-Authority under Section 39(1) of the Karnataka Value Added Tax Act, 2003 relating to assessment period 2013-14 as well as the endorsement dated 27.04.2019 rejecting the request of the petitioner for rectification of the re-assessment proceedings.

The petitioner is a partnership concern engaged in execution of civil works contract and registered as a dealer under the provisions of the Karnataka Value Added Tax Act, 2003 ( ‘Act’ for short) and borne on the file of LVO-35. The main grievance of the petitioner is that the prescribed Authority has restricted the labour charges to 30% as per Rule 3(2)(m) of the Karnataka Value Added Tax Rules, 2005 despite accepting the books of accounts which clearly

discloses the total labour and like charges expended to the extent of 81% of the total receipts. Sri K.M.Shivayogiswamy, learned counsel for the petitioner placing reliance on the judgment of the Hon’ble High Court of Allahabad in the case of National Project Construction Corporation v. Commissioner of Trade Tax reported in [2019] 64 GSTR 171 would submit that once books of accounts were accepted, there was no room to invoke the other provisions of the Act and the Rules to restrict the labour charges to 30%.

Learned AGA appearing for the respondents justifies the order impugned.

At the outset, it is evident that the petitioner has rushed to this Court without availing the alternative and efficacious remedy of appeal available under the Act. As could be seen from the re-assessment order, no books of accounts of the dealer more particularly, relating to the labour charges claimed has been accepted by the prescribed authority. If so, invoking of the writ juri iction to adjudicate upon the question of facts requires to be negated.

Hence, the writ petition stands disposed of, relegating the assessee to avail the alternative remedy of appeal available under the Act. If such an appeal is filed by the petitioner within a period of four weeks from the date of receipt of certified copy of the order, the same shall be considered by the Appellate Authority on merits in accordance with law without objecting to the period of limitation.

Writ petition stands disposed of, in terms of the above. JUDGE

hkh.