ABHAY SOLVENTS PRIVATE LIMITED Vs. ASSISTANT COMM

JUDGEMENT

(1.) These petitions are filed challenging the correctness and legality of the order of the respondent dated 28.12.2017 as per Annexures-A1 to A18, inter alia, seeking for a direction to the respondent to furnish to the petitioner all the details, documents and information as sought for by the petitioner vide its letter dated 27.12.2017 as per Annexure-H and grant an opportunity of being heard to the petitioner.

(2.) The petitioner is a company engaged in the business of manufacturing of refined rice bran oil. The petitioner while in the process of manufacturing the refined rice bran oil obtained de-oiled rice bran as a by- product. While the rice bran oil was a taxable commodity under the Karnataka Value Added Tax Act, 2003 ['KVAT Act', for short], the de-oiled rice bran was an exempted product. The petitioner applied for partial rebate under Section 17 of the KVAT Act and accordingly restricted its claim of input tax credit to the extent of the inputs utilized towards the de-oiled rice bran. This court in the case of 'M/S. M.K. AGRO TECH PRIVATE LIMITED v. STATE OF KARNATAKA' in STRP Nos.774-794/2013 held that principles of partial rebate under Section 17 of the KVAT Act cannot be applied in cases where there is an exempted by-product as opposed to an exempted final or end product. Based on the said Judgment, the petitioner approached this Court in Writ Petition Nos.110509-525/2015 seeking for a direction to the concerned Authority to refund the input tax credit in respect of the tax period, March 2014 to July 2015. This Court following the decision of the Division Bench in M.K. AGRO TECH's case supra, allowed the writ petitions and a direction was issued to Respondent No.1 to process the application filed by the petitioner for refund of input tax paid in excess, refund the same, if not otherwise found disentitled. It was observed that in case the tax is refunded as ordered, the respondents are at liberty to obtain indemnity bond from the petitioner to the extent of amount refunded. Further refund shall be subject to result of special leave petitions pending in SLP [Civil] Nos.576-596/2014. Pursuant to the order passed by this Court, the respondent refunded the excess input tax credit in respect of tax period April 2015 to January 2017 after the indemnity bond executed by the petitioner. The Hon'ble Apex Court in its order dated 209.2017, in 'THE STATE OF KARNATAKA v. M/s. M.K. AGRO TECH PVT. LTD.,' set aside the decision of this Court in STRP Nos.774-794/2013 and held that the assessee was not entitled to claim full input tax credit and provisions of Section 17 of the KVAT Act, partial rebate was applicable. Subsequently, the respondent issued notice and sought to recover the refunded amount with interest placing reliance on the decision of the Hon'ble Apex Court in the case of M.K. AGRO TECH supra, on the premise that the refund was subject to the result of the Hon'ble Supreme Court Judgment and sought for recovery on the basis of a circular issued by the Commissioner of Commercial Taxes ['CCT', for short] dated 9.10.2017.

(3.) It is the contention of the petitioner that the petitioner submitted a letter dated 9.12.2017 to the respondent, requesting to furnish a copy of the circular of the CCT on the basis of which recovery was sought to be made from the petitioner, which was refused by the respondent and directed the petitioner to obtain the same from the CCT directly. It is based on the CCT's circular, which was issued pursuant to the Judgment of the Hon'ble Apex Court in the case of M.K. AGRO TECH supra, demand notices were issued and orders were passed under section 10[5] read with section 69[1] of the KVAT Act, directing the petitioner to make payment of refund amount with interest from the date of the refund till the date of passing of the order. Being aggrieved by the same, petitioner is before this Court.