R.C. INDIA Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) THESE appeals are by the very same assessee challenging the order passed by the revisional authority who has passed an order of reassessment disallowing the input -tax credit which is granted to the assessee. These four appeals pertaining to four different periods but the questions involved are the same. Therefore, all these appeals are taken up together for consideration and disposed of by this common order. The assessee is a holder of quarrying licence with effect from October 12, 1999 under quarrying lease deed at the areas in Kanakapura Taluk in its capacity as a partnership firm. He has also paid the royalty in accordance with law. After verifying the details, the assessee was given mineral dispatch permits. The assessee after extracting the granites has dispatched the granite blocks with the permit so granted to him. However, the assessee was liable to pay tax for sale of rough granites. The investigation wing of the Department had launched investigation in case of tax evasions committed by various quarrying licence holders who have extracted and sold the rough granites in areas under Kanakapura Taluk. During the course of such investigation, the assessee was also found to be one among the persons who have not declared the taxable sales of granites. On the basis of the information secured from the investigation, the investigation authority concluded the assessment under section 38(7) of the Karnataka Value Added Tax Act, 2003 (for short, hereinafter referred to as the "Act"). He levied penalty and interest. The assessments were concluded and a demand notice was issued. The matter was taken to the appellate forum under section 62 of the Act. The appellate authority allowed the appeals by way of annulling the audit orders without the authority of law. Therefore the proceedings were initiated under section 64(1) of the Act. The revisional authority found that both the audit authorities under section 39(1) and appellate authority have not actually verified as to whether the respective turnovers in regard to input -tax rebate allowed are actually relating to inputs used in business resulting sale of taxable goods. Without ascertaining the said facts and recording the finding as per the books of accounts, the input -tax rebate is allowed. Further it also held that it is a case of improper allowance of the input -tax credit in case of certain tax invoices which are invalid. They have referred to the invoices, which are invalid, which are found in the records. Therefore, it was observed that such instances are available in case of certain other invoices available on the appeal records. The commodities are not examined for admission of the above legal reasons. Therefore, he concluded that the claim on input -tax rebate is allowed without proper verification. Therefore, a show -cause notice came to be issued. After hearing the assessee, the revision was allowed. The order passed in appeal was set aside and the order passed by the assessing authority was restored. Further, the assessing authority was granted liberty to reopen the assessment on the ground of further information or evidence covering the matters other than the matters covered in this revision order. Aggrieved by the same, the assessee is before court.

(2.) THE learned counsel for the assessee raised two grounds. Firstly, he contended that in the absence of the allocation of the area by issue of a direction under section 61(1) of the Act, the revisional authority had no jurisdiction to make the reassessment. Secondly, he contended that in the absence of any fresh evidence being available, the question of passing a second reassessment order as contemplated under section 39(2) of the Act is without jurisdiction. Therefore, the impugned order requires to be set aside.

(3.) SECTION 64 confers revisional powers on Additional Commissioner and Commissioner. In other words, this power is conferred under the authority by statute. Therefore, no direction or notification needs to be issued for conferring such powers. But for the revisional authority to exercise its jurisdiction over an assessee, it has to be specifically provided under section 61(1) of the Act. The argument is that there is no such direction and the information obtained under the right to information shows that such an arrangement is made only under the order dated February 22, 2002 which was issued by the Commissioner of Commercial Taxes. Therefore, the order is one without jurisdiction.