KALEESUWARI REFINERY (P) LTD. REPRESENTED BY ITS DIRECTOR M. ARUN Vs. THE ASSISTANT COMMISSIONER (CT), ENFORCEMENT

JUDGEMENT

(1.) PETITIONER has sought for to issue writ of certiorari to quash the notice issued under Section 79 of the Karnataka Value Added Tax Act of 2003 dated 6.12.2010 issued by the Asst. Commissioner of Commercial Taxes for Enforcement, Tumkur at Annexure 'D' and to direct the Respondent to take up re -assessment proceedings under Section 39 of the Act and to pass appropriate orders in accordance with law.

(2.) ACCORDING to the Petitioner, it is a Private Limited Company and a registered dealer under the Karnataka VAT Act of 2003 engaged in the business of manufacture of edible oils having its head office at Bangalore and factory premises at Tumkur. Petitioner purchases crude sunflower oil from local registered dealers upon sufferance of tax and also obtains crude sunflower oil as stock transfer from Chennai and the crude oil so obtained is refined at the factory at Tumkur and it is thereafter sold locally in the State of Karnataka to their distributors through C and F agents. For the assessment years 2007 -2008, 2008 -2009, 2009 -2010 and 2010 -2011, the Petitioner filed monthly returns duly reporting their total and taxable turn over and claimed eligible deduction input tax credited towards the input tax paid on the purchases of crude sunflower oil from local registered dealers upon sufferance of tax. As per the mandate under Section 31(4) of the KVAT Act, if the turnover exceeds Rs. 25 lakhs in a year, the audit statement of accounts and prescribed documents has to be submitted to the local VAT Officer. Section 38 of the KVAT Act provides for a deemed assessment based on the returns filed under Section 35 of the Act while reserving the power to the Commissioner to notify any dealer to produce books of accounts before the prescribed authority who shall thereafter, pass regular assessment orders based on the returns and pass a best judgment assessment.

(3.) IN the case on hand, according to the Petitioner, notice was issued on 30.11.2009 about the proposed audit visit on 17.12.2009 requesting the Petitioner to produce the entire books of accounts and other related documents for the period from 1.4.2005 to 31.3.2009. According to the Petitioner, while conceding for such explanation and auditing for the period from 1.4.2005 to 31.3.2007 i.e., for the period 2005 -2006 and 2006 -2007, as per Section 39(2) of the Act, re -assessment proceedings have been completed as against which, Writ Petitions Nos. 27357 -550 have been filed before this Court and since the Petitioner had informed the officer concerned regarding the pendency of those writ petitions, no action has been taken. Subsequently, the Assistant Commissioner passed a consolidated order for the period 1.4.2007 to 31.3.2009 stating that assessment filed towards the liability is in order and also concluded that re -assessment proceedings is not required. Accordingly, he has dropped the same. Thereafter, on 20.09.2010, the Asst. Commissioner for Enforcement, conducted inspection of the premises of the Petitioner at Tumkur and sought for production of documents and accounts and also having recorded the statement of the Petitioner, also called to produce the local purchase register and also VAT returns for the period 2007 -2008 and 2008 -2009. Thereafter, the Enforcement Officer (Asst. Commissioner) issued notice on 08.10.2010 and in response to the same, Petitioner is said to have produced the related documents and also the balance sheets for the period from 2007 -2008 to 2009 -2010 and also tiled freight outward details from 1.4.2004 to September 2010. After production of all the documents, the Asst. Commissioner (Audit -22) has passed an order on 28.8.2010 dropping the re -assessment proceedings under Section 39(1) of the KVAT Act. Thereafter, the Respondent issued a notice dated 6.12.2010 under Section 79 of the KVAT Act stating that Petitioner is intentionally evading payment of tax and that he has received lesser quantity of crude oil as compared to the quantity mentioned in the invoice and has claimed VAT input tax credit and also has collected freight charges from the customers on which the Petitioner has not paid the tax.