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Karnataka High Court
Judges : P.Vishwanatha Shetty
SHAW WALLACE AND COMPANY LTD. - Appellant
Versus
DEPUTY COMMISSIONER OF COMMERCIAL TAXES (ASSESSMENTS-2), CITY DIVISION-III - Respondent
Writ Petition 24777 Of 1996
Decided On : 07/14/1997
Karnataka Sales Tax Act, 1957-Section 12(6)(b)-Natural justice-the basic requirement for making a valid assessment is to make it with a notice to the assessee-an order to extend the period of limitation has also to with notice-such requirements under principles of natural justice must be done.
Karnataka Sales Tax Act, 1957-Section 12-A(1)-(as amended by Act 10 of 1983 w.e.f. 1.4.1993)-Escaped turnover-By virtue of amendment made by Act 10 of 1983 of Section 12-A, Scape and ambit of assessment and re-assessment has been enlarged-by the impugned amendment, power is conferred on the Assessing Authority to assess or re-assess all the assessments which have been accepted, even without holding that the amendment is retrospective in operation.
Karnataka Sales Tax Act, 1957-Section 12-A(1)-(as amended by Act 27 of 1985 w.e.f. 1.8.1985)-Escaped turnover-period of limitation extended from five years to ten years by the amending Act of 1985-period of limitation only bars the enforcement of claim but it does not extinguish the claim-instantly, period of five years from the expiry of the year to which the tax relates even in respect of the year 1980 assessment would have expired on 31.12.1985-but the period from five years to ten years was extended from 1.8.1985-hence bar created by statute removed-as such no merit in the contention that notices were issued after expiry of the period of limitation.
Karnataka Sales Tax Act, 1957-Section 12-A(1)-Escaped turnover-on the ground of delay in concluding the proceeding claim of the State to recover the tax due cannot be nullified-instantly, petitioner was knowing fully well that proceeding was initiated against him for recovery of the dues to the State-petitioner cannot be allowed to come forward with a plea that though the proceeding was initiated within the prescribed period but was not concluded within the time.
Karnataka Sales Tax Act, 1957-Section 12(6)(b)-Assessment-Limitation for-order of deferment has to be passed by the Commissioner and preceded by a notice within statutory period of three years-assessment made after expiry of statutory period of limitation on the plea of the order of deferment passed by the Commissioner cannot be sustained in law.
Karnataka Sales Tax Act, 1957-Section 12(6)(b)-Natural justice-the basic requirement for making a valid assessment is to make it with a notice to the assessee-an order to extend the period of limitation has also to with notice-such requirements under principles of natural justice must be done.
Karnataka Sales Tax Act, 1957-Section 12-A(1)-(as amended by Act 10 of 1983 w.e.f. 1.4.1993)-Escaped turnover-By virtue of amendment made by Act 10 of 1983 of Section 12-A, Scape and ambit of assessment and re-assessment has been enlarged-by the impugned amendment, power is conferred on the Assessing Authority to assess or re-assess all the assessments which have been accepted, even without holding that the amendment is retrospective in operation.
Karnataka Sales Tax Act, 1957-Section 12-A(1)-(as amended by Act 27 of 1985 w.e.f. 1.8.1985)-Escaped turnover-period of limitation extended from five years to ten years by the amending Act of 1985-period of limitation only bars the enforcement of claim but it does not extinguish the claim-instantly, period of five years from the expiry of the year to which the tax relates even in respect of the year 1980 assessment would have expired on 31.12.1985-but the period from five years to ten years was extended from 1.8.1985-hence bar created by statute removed-as such no merit in the contention that notices were issued after expiry of the period of limitation.
Karnataka Sales Tax Act, 1957-Section 12-A(1)-Escaped turnover-on the ground of delay in concluding the proceeding claim of the State to recover the tax due cannot be nullified-instantly, petitioner was knowing fully well that proceeding was initiated against him for recovery of the dues to the State-petitioner cannot be allowed to come forward with a plea that though the proceeding was initiated within the prescribed period but was not concluded within the time.
( 1 ) IN these petitions, the petitioner has prayed for quashing three notices dated November 7, 1987, copies of which have been produced as annexures A1 to A3 and notice dated December 30, 1992, a copy of which has been produced as annexure A4, and three notices dated August 19, 1996, copies of which have been produced as annexures F1 to F3 and notice dated August 16, 1996, a copy of which has been produced as annexure F4.
( 2 ) BRIEF facts that may be relevant for disposal of these petitions may be set out as hereunder : the petitioner, in these petitions, is a public limited company engaged, inter alia, in the manufacture and sale of Indian-made foreign liquor (hereinafter referred to as "the IMFL"); chemical fertilisers and fertiliser mixtures and consumer products, etc. It is the case of the petitioner that it has its own distilleries in some of the States of Union of India; and for the assessment years 1981-82 to 1983-84, it did not have a distillery of its own in the State of karnataka and, therefore, it had entered into an agreement dated October 13, 1980 with the indian Brewery and Distillery (Private) Ltd. , (hereinafter referred to as "the IBD"), which had a distillery at Hallikhed, Bidar District, for the purpose of sale of IMFL to the petitioner under the petitioner's brand name. It is the further case of the petitioner that during the calendar years 1980 to 1982 and 1984, is respect of which the dispute has arisen in these portions, the IMFL was exigible to sales tax at the point of first sale in the State of Karnataka as provided under section 5 (3) of the Karnataka Sales Tax Act, 1957 (hereinafter referred to as "the Act") and since the ibd manufactured and sold IMFL to the petitioner, the IBD was liable to sales tax and, therefore, the petitioner paid the sales tax for the years in question to IBD, that is, for the assessment years 1980, 1981, 1982 and 1984; (which are the subject-matters of dispute in these petitions) and the assessment orders were passed by the respondent on December 16, 1983; december 31, 1983; December 23, 1983 and January 18, 1985 for the years 1980, 1981, 1982 and 1984 respectively; and in the said assessment orders, the subsequent sale of IMFL made by the petitioner in the State of Karnataka were exempted from sales tax. It is the case of the petitioner that since the petitioner was aggrieved by the said assessment orders in regard to determination of taxable turnover in respect of chemical fertiliser mixtures and in regard to liquor pertaining to the question whether the bottles were liable to be taxed at the same rate at which liquor was liable, the petitioner preferred appeals under the Act to the Deputy commissioner (Appeals) and later to the Tribunal and before this Court; and this Court, by its order dated November 4, 1992 [shaw Wallace and Co. Ltd. v. State of Karnataka [1993 ]91 STC45 (Kar )], disposed of the revision petitions and remitted the matter for fresh consideration to the assessing authority. According to the petitioner, the point that was remitted for consideration was an to whether the bottles were to be taxed at the rate different from their contents being liquor or not. It is also the case of the petitioner that on an inspection of the petitioner's premises by the Intelligence Wing of the Commercial Taxes department on May 3, 1986, a number of documents were seized and taken away by them and on the basis of the documents seized, the Intelligence authorities appear to have formed an opinion that the petitioner's sales of IMFL, which were claimed to be second sales by the petitioner in its return filed for the years referred to above and also for the assessment year 1983 and accepted by the respondent in the assessment orders, were incorrect and that the petitioner's sales were required to be construed as first sales in the State of Karnataka and as such, liable for payment of tax. Even in respect of the inter-State sales, the same view ap
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