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Judgment
Dr. Jawad Rahim, J.—The petitioner-Company is a Private Limited Company registered under Companies Act, 1956 and also a registered dealer under Central Sales Tax Act, 1956. In this writ action has brought in question the order dated 5-3-2014 Annexure-A passed by respondent 1 rejecting appeal preferred by it against the assessment order of the 2nd respondent vide Annexure-B1, dated 22-6-2011, for the year 2001-2002, Annexure-B2, dated 23-6-2011 for the year 2002-2003, Annexure-B3, dated 24-6-2011 for the year 2003-2004 and Annexure-B4, dated 30-6-2011 for the assessment year 2004-2005 and also to quash the endorsement No. DCCT/A and R-6.9), dated 14-3-2014 issued by the third respondent vide Annexure-J. Dr. Girikumar appears for respondents 1 to 3.
From what the learned Counsel for the petitioner and learned Standing Counsel for the respondent-revenue has urged to and on perusal of the records in supplementation thereto, it is seen the petitioner-company was subjected to assessment by the first respondent for the financial years 2001-2002, 2003-2004, 2004-2005 and while assessing the tax liability, first respondent declined to consider the original assessment order passed by the 2nd respondent under Section 9(2) of the Central Sales Tax Act, 1956 read with Section 12(3) of the Karnataka Sales Tax Act, 1957 for the said years.
It is seen the petitioner had applied for exemption provided under Notification Nos. FD 32 CSL 96(I) and FD 32 CSL 96 (II) read with G.O. No. CI 30 SPC 96, dated 15-3-1996, on the basis that the petitioner was originally issued Certificate No. IDF/EI/FAVC/PEPCO/BLR/130/97-98, dated 12-11-1997 and amendment Certificate No. IDF/EI/FAVC/PEPCO/BLR/130/97-98, entitling it, it is entitled to 100% sales tax exemption subject to ceiling of tax amount of Rs. 33,43,17,727/- on inter-State sales as well as sales within the State of Karnataka of finished goods manufactured from its unit situate at Nelamangala, within the State.
The petitioner claims it undertook expansion of the'' unit at Nelamangala in 1999 and applied for exemption under notification referred to above. The original certificate of exemption was issued on 10-12-1999 and later amendment certificate was issued on 11-1-2000 which entitles exemption of tax inter-state sales as well as sales within the State of Karnataka of finished goods manufactured from its expanded unit at Nelamangala. The maximum ceiling upto which exemption can be availed is Rs. 15,19,24,590/- i.e., 80% of value of the value of investment of Rs. 18,99,05,738/-.
The petitioner claims it undertook further diversification of unit at Nelamangala and again applied for certificate as referred to above on 7-11-2001 and 23-6-2004. The maximum ceiling upto which exemption can be claimed is Rs. 8,63,83,680/-.
It is alleged, petitioners'' unit was inspected by the Deputy Commissioner of Commercial Taxes (Int.-III) and copy of inspection report was issued to the petitioner evasion of tax provisional assessment order is passed for the years 1997-1998 to 2001-2002. The petitioner challenged the provisional assessment orders in this Court. But the Writ Petition Nos. 45079 to 45086 of 2002 was disposed of permitting it to prefer appeal. It preferred writ appeal against the order of the learned Single Judge which was disposed of in the terms of Annexure-D.
Thereafter joint Commissioner of Commercial Taxes (Administration) vide Order No. BDN/JCCT(A)/DAFR/CR/-2/2004-05, dated 31-5-2005 deferred the assessment for the year 2001-2002 on the ground that the petitioner has preferred writ petition vide W.P. No. 45079 to 45086 of 2002. The Joint Commissioner of Commercial Taxes by his order dated 11-3-2008 deferred the assessment for the assessment year 2004-2005 referring to the said writ petition and no opportunity was given to the petitioner before deferring the assessment and writ petition was disposed of on 12-12-2013 itself. Therefore, there is no justification for deferring the assessment for the relevant years. It is also averred the writ appeal filed by the revenue against the said order in the writ petition was disposed of on 21-10-2008 since no other further action is pending. Thereafter the 2nd respondent issued a notice on 15-3-2011 for the years 2000-2001, 2001-2002 and 2004-2005 calling upon the books of accounts. The second respondent further issued notice on 26-3-2011 proposing to make ex parte assessment. The petitioner filed reply dated 23-4-2011 stating that the records were filed before the Deputy Commissioner of Commercial Taxes (Audit) on 4-6-2009. The authority is proceeded to consider the assessment under Section 9(2) of the CST Act read with Section 12(7) of the KST Act was completed on deemed acceptance basis for the year 2003-2004. It was followed by notice under Section 9(2) of the CST Act read with Section 12-A of the KST Act.
The 2nd respondent has passed another order dated 26-5-2011 under Section 9(2) of CST Act read with Section 12(3) of KST Act vide Annexure-B1. The petitioner has mentioned the validity of the dates on which the order of 2nd respondent has passed order vide Annexures-B, B1, B2, B3 and B4. Against it the petitioner filed application on 9-8-2011 under Section 9(2) of the CST Act read with Section 25-A of the KST Act to take on record the Form ''C'' and Form ''F'' vide Annexures-E1 to E5.
In the same application the petitioner sought rectification towards claim of intra-State stock transfer of Rs. 1,06,16,575/- for the year 2000-2001. The Deputy Commissioner of Commercial Taxes passed separate orders on 26-9-2011 under Section 9(2) of the CST Act read with Section 25-A of the KST Act for the years 2000-2001, 2001-2002, 2003-2004 and 2004-2005 giving effect to C Forms and F Forms filed along with application dated 9-8-2011 vide Annexures-F1 to F4. It is alleged the Deputy Commissioner of Commercial Taxes refused the grant deduction to the intra-State stock transfer and also rejected the petitioners request to grant for time to file the balance C/F Forms. On the said adverse orders, the petitioner filed appeal dated 28-10-2011 to the first respondent for the assessment year 2000-2001 requesting the authority based on the ground the assessment order dated 26-5-2011 as rectified by the order dated 26-9-2011 insofar as the above grounds are concerned.
Similar appeals were filed subsequent thereto also. But the first respondent by common order under Section 9(2) of the CST Act read with Section 25-A of the KST Act for the financial years 2000-2001 to 2004-2005 has declined to consider the grounds urged against the original assessment order for the relevant years mentioned above on the ground that the petitioner has only challenged the order dated 26-9-2011 passed under Section 9(2) of the CST Act and Section 12(3) of the KST Act. The petitioner further contended that the first respondent has not considered the issue raised by the petitioners on merit and dismissing the grounds urged by the petitioners'' against the original assessment order and consequently, passed orders on the rectification application.
It is further contended the impugned order at Annexure-A has been passed by the first respondent being of the opinion that what was the questioned before it is the order against the rectification application and not against the original order dated 26-9-2011. Thus being of that opinion the grounds raised against the original order has not been considered.
It is further urged that the first respondent has himself applied the decision in the case of Allahabad High Court v. Commissioner of Sales Tax, 1-254. It is further averred that the first respondent had considered all the grounds, the petitioner would have resorted to remedy of further appeal which he could not as there is no time.
Dr. Giri Kumar submits that the writ petition must be dismissed as the petitioner has alternative efficacious remedy to appeal against the order in question wherein all grounds urged by the petitioners would be taken into consideration. The moot question that needs answer in this writ petition is the order at Annexure-A can be sustained or whether the order suffered failure to exercise with appellate jurisdiction conferred on the first respondent?
Needless to record that the petitioner-assessee has preferred appeal under the provisions of CST and KST Acts. What the petitioner did was to question also the order on its rectification application on the plea that the doctrine of merger would apply and it is necessary the first appellant should have considered this plea as preliminary before taking final decision of rejection or allowing the appeal.
From the narration of very reference made by the first respondent to the grounds of appeal before it, it could be seen the first respondent was conscious of the fact that several grounds urged against the original order of assessment and it failed to get the said order revised by way of rectification through its application questioned it in an appeal. In the appeal it has questioned not only the order of the assessment order passed on the rectification application.
The decision relied on by the first respondent is the decision rendered on different facts and circumstances, where it was opined that in some other decisions that if the assessee has preferred an appeal against the rectification order and seeks to assail even the original order, it will be construed as attempt to over come lapses. In the instant case, it is not in dispute the petitioner had the benefit of period of limitation available to prefer an appeal when it moved an application for rectification. Therefore, no malice could be attributed to the petitioner.
Now the point for consideration in these appeals is whether the Appellate Authority has the jurisdiction to answer the aforesaid issues on the basis, of the present petitions filed against the rectification orders passed under Section 9(2) of the CST Act, 1956 read with Section 25-A of the KST Act, 1957?
In the impugned rectification orders, the respondent has enlisted the grounds on which the appellant has sought for rectification and the ground on which the respondent has passed the impugned rectification orders are reproduced hereunder:
The dealer vide letter dated 9-8-2011 has sought rectification of assessment passed under the CST Act, 1956 by enclosing ''C'' Forms and Form ''T'' amounting to Rs. 35,31,619.00 and Rs. 44,34,22,516.00 respectively and requested further 3-4 and Form ''T'' of Rs. 1,17,93,784/-. They have also informed that they have stock transferred a turnover of Rs. 1,06,16,575.00 within the State of Karnataka.
The rectification application filed is examined on verification of assessment records, it is observed that the dealer has claimed concessional rate of tax at 4% on the inter-State sale of aerated water against C Forms and claimed exemption on stock transfers or aerated water to its branches situated outside the State against Form ''F''. The dealer has sown sufficient cause for not getting of ''C'' Forms and Form ''F'' within the time. Following the judgment rendered by the Hon''ble High Court of Tamil Nadu in case of State of Tamil Nadu Vs. Arulmurugan and Company, , the ''C'' Forms and Form ''F'' filed are considered and concessional rate of at 4% to the extent of ''C'' Forms and exemption is allowed to the extent of Form ''F'' filed. However, further extension of time sought to file remaining ''C'' Forms and Form ''T'' is rejected as the dealer has already been provided sufficient opportunity to file statutory forms.
Further the request of the dealer to allow branch transfers locally cannot be considered at this stage as the dealer has failed to file objections against the proposed notice issued before concluding the original assessment.
From the above reasoning of the respondent for rectifying the relevant assessment/reassessment orders for relevant assessment years, it is clear that only on the basis of relevant declaration forms for inter-State sales and stock transfers, the original assessment orders/reassessment orders have been passed. I do not find any reference to the grounds urged by the petitioner against the original assessment order or ground urged as main grounds against the original order or order of assessment or rectification order. I am satisfied the first respondent has not considered the grounds urged by the petitioner and all other things that no other grounds could be considered as appeal against the order of the rectification order. It is a clear case of appeal, jurisdiction conferred on the authority and as the petitioner had opportunity of suppressing all the grounds against the order of original assessment order. It is argued that the impugned order be set aside and appeal be remanded to the first respondent to record its finding on all the grounds and pass appropriate orders in accordance with law.
Being of this view, the writ petition is allowed. The order at Annexure-A vide CST. AP. Nos. 92, 93, 95 and 96/11-12, dated 5-3-2014 is set aside with a direction to the first respondent to be heard on merit and in accordance with law after giving opportunity to the petitioner. The first respondent-Appellate Authority to dispose of the appeal within the outer limit of three months from the date of receipt of copy of this order.