ORDER : As the appeals arise from the common order passed by the Additional Commissioner of Commercial Taxes (hereinafter referred to as ‘Revisional Authority’ for the sake of convenience), they have been considered simultaneously. 2. The short facts of the case are that the appellant-assessee filed the returns for the assessment year 2005-2006 and a particular amount of tax payable was shown in the returns. The assessee did not file revised return within the prescribed period of six months, but filed the revised return after the expiry of a period of six months. In the revised return, the net effect was not the liability to pay any additional tax, but was the refund claimed of a substantial amount by showing that the input tax credit was higher than the tax payable. The assessing authority assessed the returns, but did not accept the revised return since it was outside the period of six months and hence, the assessment orders were issued, demands were made and the interest and penalty were also imposed. 3. The assessee carried the matter in an appeal before the first appellate authority, namely the Deputy Commissioner of Commercial Taxes. The first appellate authority found that even if the revised return was after the expiry of a period of six months for the claim of input tax credit, the same was acceptable and hence set aside the order of the assessing authority and directed to make recalculation of tax amount with proportionate interest and penalty. 4. As per the appellant, against the order of the first appellate authority so far as it related to levying of interest and penalty the appeals were preferred before the Tribunal in STA Nos. 809-820/2009 on 17.9.2008. When the appeals were pending before the Tribunal, as per the appellant-assessee, suo moto revisional powers were exercised by the Revisional Authority by issuance of a notice on 30.12.2009 on the ground that the revised return could not have been accepted and resultantly it is prejudicial to the interest of revenue, since in the revised return instead of additional liability of tax the refund is claimed by showing more input tax credit. 5. It appears that when the matters were before the Revisional Authority, sufficient opportunity was given to the assessee to produce the documents of appeals pending before the Tribunal however, no such documents were produced. 5. It appears that when the matters were before the Revisional Authority, sufficient opportunity was given to the assessee to produce the documents of appeals pending before the Tribunal however, no such documents were produced. Ultimately, vide order dated 24.3.2010 the Revisional Authority found that the revised return after the expiry of a period of six months could not have been accepted by the first appellate authority and hence, set aside the order of first appellate authority and directed that the orders for reassessment be restored. 6. It appears that, thereafter, the appeals before the Tribunal were heard and the Tribunal vide order dated 14.10.2015 found that the order of first appellate authority is already set aside. The Tribunal further expressed its view on the question of acceptance of revised return after the expiry of a period of six months and ultimately, the appeals were dismissed. 7. The appellant being aggrieved by the order of the Tribunal preferred revision petition in STRP Nos. 117/2016 and 119/2016 to 129/2016 before this Court. The appellant has also simultaneously preferred the present appeals before this Court against the order of the Revisional Authority dated 24.3.2010 roughly after a period of about more than five years. 8. It may be recorded that this Court in STRP No. 117/2016 and allied matters vide order dated 28.4.2016, since the Tribunal in the impugned order had travelled beyond the scope of main appeal itself before it, set aside the order of the Tribunal with a further direction that the appeals before the Tribunal shall stand restored to the file of the Tribunal. However, it was also directed that the Tribunal shall await the final conclusion of the present appeals, which are filed against the order dated 24.3.2010. It was further directed that after the conclusion of the present appeals, the Tribunal shall pass appropriate order in accordance with law, after giving opportunity of hearing to both the sides. 9. Under these circumstances, at this stage, we have to consider the present appeals. 10. We have heard Mr. Mallahar Rao, learned counsel appearing for the appellant and Mr. Veda Murthy, learned Government Advocate appearing for the respondents revenue. 11. 9. Under these circumstances, at this stage, we have to consider the present appeals. 10. We have heard Mr. Mallahar Rao, learned counsel appearing for the appellant and Mr. Veda Murthy, learned Government Advocate appearing for the respondents revenue. 11. The first contention raised by the learned counsel appearing for the appellant was that the revised return could be accepted even after the expiry of a period of six months, which is otherwise an outer limit as per Section 35(4) of the KVAT Act, whereas the learned Government Advocate appearing for the respondents submitted that the revised return is required to be filed within a period of six months from the end of the relevant tax period unless it is so permitted by the prescribed authority. He submitted that as per the circular issued by the Commissioner, the revised return after the expiry of a period of six months can be accepted only, if the revised return is resulting into additional tax liability, otherwise, such revised return is unacceptable. He, therefore, submitted that in the present case, as the revised return was not resulting into additional tax liability, the revised return could not have been accepted and the order passed by the Revisional Authority is in accordance with law. 12. In order to appreciate the contentions, we may reproduce Section 35(4) of the Karnataka Value Added Tax Act, 2003 (hereinafter referred to as the ‘KVAT Act’ for convenience) for ready reference;- “35. (4) If any dealer having furnished a return under this Act, other than a return furnished under subsection (3) of Section 38, discovers any omission or incorrect statement therein, other than as a result of an inspection or receipt of any other information or evidence by the prescribed authority, (a) he shall furnish a revised return within the time prescribed for filing the return for the succeeding tax period; and (b) he shall furnish a revised return any time thereafter but within six months from the end of the relevant tax period, if so permitted by the prescribed authority.” The aforesaid shows that as per clause (b) of sub-section (4), the revised return has to be filed within the outer limit of six months, if so permitted by the prescribed authority. 13. 13. At this stage, we may usefully refer to the decision of this Court in STA No. 2/2016 and allied matters, decided on 22.2.2016 in the case of M/s Jones Lang Lasalle Property Consultant India (P) Ltd., vs. State of Karnataka. In the said decision, it was brought to our notice that the Commissioner has issued a circular dated 7.7.2008, whereby the revised return could be accepted after the expiry of six months, if it was to result in additional tax liability. In said case to revised tax return was partly accepted so far as additional tax liability was concerned, but was not accepted for the credit of input tax. In the said case, the revised return, ultimately, even after the additional input tax credit was resulting into the net additional tax liability, this Court at paragraphs 5 to 15 observed thus;- “5. There are mainly two aspects of the matter. One is the binding effect of the circular issued by the Commissioner dated 7.7.2008 and the interpretation thereof and the another is interpretation of the view taken by this Court in the decision which have been referred to as that of the learned Single Judge and of the Division Bench in the Order. 6. On the first aspect, one may record that the Circular dated 7.7.2008 vide No. VAT/CR31/2008-09 it has been provided as under:- “Any revised return filed by a dealer beyond six months from the end of the relevant tax period is liable to be rejected. However, if such revised return indicates any additional tax liability, then in such a case, the return filed should be accepted with any payment made and reassessment proceedings should be got initiated through the jurisdictional JCDVO.” 7. We may, at the outset, record that so far as binding effect of the Circular is concerned, learned Counsel for the Appellant did assert and the learned Government Advocate for the Revenue has not been able to dispute the binding effect of the circular. 8. It further transpires that the Revisional Authority considered that the circular refers to the additional tax liability of tax and it does not refer to any credit of input tax. Learned Additional Government Advocate appearing for the Revenue also supported the said say of the Revisional Authority in the impugned order. 9. 8. It further transpires that the Revisional Authority considered that the circular refers to the additional tax liability of tax and it does not refer to any credit of input tax. Learned Additional Government Advocate appearing for the Revenue also supported the said say of the Revisional Authority in the impugned order. 9. On the plain and simple reading of the circular, it transpires that whenever the word is ‘any additional tax liability’ it would mean ‘additional net tax liability’ because the moment there is use of the word ‘additional’, it would mean that either the tax is already paid, but shortly paid or even after the credit of input tax, the further liability of the tax remains which is required to be paid by the return. The attempt to contend that it should be revised return only for the purpose of absolute additional tax liability and not to include the adjustments thereof with input credit, cannot be countenanced for the simple reason that whenever the matter pertains to payment of additional tax liability, it would always mean the credit or set off to be made of the tax already paid and the consequential amount of tax by way of additional tax liability. If the credit or adjustment is to be given to the amount of tax already paid, there is no reason why the credit of input tax should not be adjusted against the tax liability and thereafter to arrive at the additional tax liability. In our view, the interpretation put forward on behalf of the Revenue to the circular dated 7.7.2008 cannot be accepted. 10. On the second aspect, while dealing with the decision of this Court, the observations are made by the Revisional Authority in the impugned order that in the case of ‘M/s. Infinite Builders & Developers and Centum Industries Bangalore Vs. Additional Commissioner of Commercial Taxes, Zone-II, Bangalore’, the observations were made otherwise for the credit of the input tax and therefore the claim made by the assessee of input tax cannot be accepted when the revised return is filed beyond the period of six months. 11. We may first refer to the decision of the learned Single Judge of this Court in the case of ‘Federal Mogul Goetze [India] Limited Vs. Additional Commissioner of Commercial Tax [Audit] 52, Bangalore and Others’ reported in [ (2011) 42 VST 439 (KARN)]. 11. We may first refer to the decision of the learned Single Judge of this Court in the case of ‘Federal Mogul Goetze [India] Limited Vs. Additional Commissioner of Commercial Tax [Audit] 52, Bangalore and Others’ reported in [ (2011) 42 VST 439 (KARN)]. It was observed by the learned Single Judge that the Commissioner’s circular is absolutely sustainable. Further, the learned Single Judge did observe that filing of the belated revised returns and their acceptance by the concerned Officer would not put the exchequer to any prejudice and ultimately it was found that the revised return for the additional tax was permissible. 12. It is also brought to our notice during the course of the hearing that the above referred decision of the learned Single judge in the case of ‘FEDERAL MOGUL GOETZE [INDIA] LIMITED [supra] was carried before the Division Bench of this Court in Writ Appeal No. 4900/2011 and allied matters and vide Judgment dated 22.04.2015, the Division Bench of this Court did not interfere with the view taken by the learned Single Judge. 13. In another decision of the Division Bench of this Court in the case of ‘State of Karnataka Vs. Centum Industries Private Limited, Bangalore’ reported in [(2014) (80) KLJ 65 [HC] [DB], it was a case where no claim of input tax credit was ever made. In the appeal before the Tribunal, the input tax credit was granted. When the matter came up for further revision before this Court, this Court found at paragraph14 as under:- “If the assessee is not putting forth a claim for input tax deduction in the returns filed in July 2006 nor as he put forth such a claim in a revised claim which he could have filed within 6 months there from his right to claim input deduction is lost. He cannot for the first time in the returns filed in February 2007 put forth a claim for input tax deduction as the said return was not related to the tax period during which the input tax was paid.” 14. This Court further found that the Tribunal did not consider the said aspect and ultimately set aside the Order of the Tribunal. The distinguishing aspect which deserves to be taken note of is that it was not matter of input credit to be reflected in the return of the tax period during which input tax was paid. This Court further found that the Tribunal did not consider the said aspect and ultimately set aside the Order of the Tribunal. The distinguishing aspect which deserves to be taken note of is that it was not matter of input credit to be reflected in the return of the tax period during which input tax was paid. Since the amount relating to input tax was to be decided in the respective period, the Court made observation thereto. As such, in the said decision, this Court did not find that even if the input tax credit is claimed for the respective tax period for which the return has been filed resulting into additional tax liability, then also input tax credit cannot be given adjustment thereof or would be unavailable. We are of the view that the Revisional Authority has not properly considered the above referred decision of this Court in Centum Industries Private Limited [supra]. 15. If the matter is examined in the light of the aforesaid two aspects and the reasons recorded by the Revisional Authority are considered, we find that the order cannot be sustained in the eye of law. Broadly, there are two reasons. One is that the correct interpretation of the circular as observed by us hereinabove has not been made nor the Revisional Authority has properly considered the decisions of this Court even if the principles of law of binding nature of the precedent to be followed.” 14. If the provision of Section 35(4) of the KVAT Act is read and considered with the above referred decision of this Court, it may be said that if the revised return is filed after the expiry of a period of six months, but is to be ultimately resulting into net additional tax liability even for a single rupee, the same can be accepted irrespective of the fact that the input tax credit claimed is of the higher amount or not. 15. It is an admitted position that in the present case, the revised tax return was for claiming higher input tax credit, but the net effect was not for additional tax liability and it was for refund of the amount. 15. It is an admitted position that in the present case, the revised tax return was for claiming higher input tax credit, but the net effect was not for additional tax liability and it was for refund of the amount. Therefore, even if the interpretation is considered as was made by this Court in the above referred decision read with the above referred circular issued by the Commissioner, the same would be of no help to the learned counsel appearing for the appellant. 16. However, the learned counsel appearing for the appellant attempted to rely upon the decision of the learned Single Judge of this Court dated 29.3.2016 passed in W.P. Nos. 22483-22494/2015 and allied matters in the case of Sonal Apparel Private Limited vs. The State of Karnataka for contending that, as per the aforesaid decision of the learned Single Judge, Section 10(3) of the KVAT Act has been read down to enable the assessee to calculate the net tax liability by deducting the input tax credit paid on its purchase from its output tax liability, irrespective of the month in which the selling dealer raises invoices. He, therefore, submitted that the time limit is no bar for claiming of the input tax credit. 17. The learned Government Advocate appearing for the respondents did submit that the State has already filed an appeal against the above decision of the learned Single Judge and therefore, this Court may not rely upon the observations made by the learned Single Judge in the above referred decision. 18. In our view, even if principally it is accepted that the input tax credit can be claimed irrespective of the month in which the selling dealer raises the invoices, then also there is no express reading down of Section 35(4) of the KVAT Act providing for the outer limit to file the revised return coupled with the power with the prescribed authority to accept, at a late stage, if it is so decided by way of a policy. 19. In any case, since the State has not accepted the order of the learned Single Judge and the order is further carried before the higher forum, we refrain from making any further observation in this regard. 19. In any case, since the State has not accepted the order of the learned Single Judge and the order is further carried before the higher forum, we refrain from making any further observation in this regard. Under these circumstances, the said decision, in our view, would be of no help to the appellant to convince the Court that even if the revised return filed beyond the period of six months is not resulting into any net additional tax liability, should be accepted by the authority. 20. The learned counsel appearing for the appellant next contended that when the appeal was pending before the Tribunal preferred by the assessee under Section 63 of the KVAT Act, if the department was aggrieved of the order of the first appellate authority, they ought to have filed a cross-objections and having not filed the cross-objections, suo moto the revisional powers are exercised and as per him, the resultant effect is that the appeal proceedings before the Tribunal are nullified, which can never be the purpose or intent of the Scheme of the Act. 21. The learned Counsel appearing for the appellant also submitted that in the Appellate Tribunal, one of the member is having a judicial background of the Cadre of Former District Judge, whereas suo moto revisional powers are available with the Revisional Authority, who is an officer of the rank of Commissioner or Additional Commissioner in the department. He submitted that if such a course is permitted to be adopted by the Revisional authority, it would have unsafe atmosphere for the assessee for proper adjudication of the matter. 22. Whereas Mr. Veda Murthy, learned Government Advocate appearing for the respondents submitted that as per the provisions of Section 63A of the KVAT Act, the power under Section 64 cannot be exercised, if the very subject matter was pending in an appeal before the Tribunal under Section 63. He submitted that enough opportunity was given to the appellant to produce the document, but he did not avail of. Further, the subject matter of the appeal before the Tribunal was only on the question of the interest and penalty and not in considering the aspects as to whether revised return filed after the expiry of a period of six months can be accepted or not. Further, the subject matter of the appeal before the Tribunal was only on the question of the interest and penalty and not in considering the aspects as to whether revised return filed after the expiry of a period of six months can be accepted or not. He, therefore, submitted that there was nothing wrong on the part of the Revisional Authority in exercising the suo moto jurisdiction, more particularly when this Court on merits may not be satisfied with the contentions of the appellant for acceptability of the revised return. 23. Section 63(1) of the KVAT Act does provide for preferring of an appeal by any officer or any person aggrieved by the order of the first appellate authority. Section 63(3) does provide for a cross objection in the appeal already preferred until the appeal is finally heard. Therefore, one of the option available to the aggrieved party, though may be respondent in the appeal is, to prefer cross-objection in the appeal already preferred by the another party before the Tribunal. Whereas Section 64(1) of the Act provides for the revisional power only to the limited extent that the order is erroneous so far as it is prejudicial to the interest of the revenue. Hence, unless the condition prejudicial to the interest of the revenue is satisfied, the revisional power is unavailable. Further, subsection (3) of Section 64 also provides that the Revisional Authority shall not exercise any power under subsection (1) or subsection (2) if the matter has been subject to an appeal under Section 63 or a revision in the High Court. As the other contingencies are not applicable for the facts of the present case, they are not required to be discussed. 24. If Section 63 is read with Section 64 conjointly, the effect is that if any party has preferred the appeal against the order of the first appellate authority before the Tribunal and in respect of the same subject matter, the other party is also aggrieved, the proper course would be to prefer cross-objection in the said appeal, more particularly because the outer time limit is until the appeal is finally heard. However, if the subject matter of the revisional power is altogether different, then in such circumstances, the cross-objection may not be filed, but if the said aspect is coupled with the circumstances of prejudicial to the interest of the revenue, then only the revisional power may be exercised. 25. At this stage, we may also record that the adjudication by the Appellate Tribunal comprising one of the members as judicial officer as against the only officer of the rank of Commissioner or Additional Commissioner may be better and in the larger interest of the system of administration of justice and there cannot be any second opinion on the said aspect. But at the same time, when the express provision of the statute is made by the legislature, it may not be given effect to, unless the constitutional validity of any the provision of the statute is under consideration and the Section or the statute is read down or strike down. As such contingencies do not call for consideration in the present matter, we leave it at that without making any further observation. But suffice it to observe that no revisional power would be available to the Additional Commissioner or the Commissioner, as the case may be, under Section 64 of the KVAT Act in respect of the subject matter of an appeal which is already pending before the Tribunal under Section 63 of the KVAT Act. 26. After having made the aforesaid observations, if we further considered the facts of the present case, we find that the appeal before the Tribunal by the assessee was only for levying of the interest and penalty and not on the point as to whether on merits the revised return filed after the expiry of a period of six months, that too, not resulting into any additional tax liability, could be accepted or not. Hence, considering the peculiar facts and circumstances of the case, we find that the contention that the simultaneous power could not have been exercised by the Revisional Authority, holds no merit and hence, not accepted. 27. The aforesaid is coupled with the aspect that as per the observations made by us herein above, on merits also we have found that the first appellate authority could not have accepted the revised return filed after the expiry of a period of six months, if not resulting into any additional tax liability. 27. The aforesaid is coupled with the aspect that as per the observations made by us herein above, on merits also we have found that the first appellate authority could not have accepted the revised return filed after the expiry of a period of six months, if not resulting into any additional tax liability. Hence, we do not find that any useful purpose would be served by interfering with the order of the Revisional Authority on a mere ground that the appeal was pending before the Tribunal and the Revisional Authority could not have exercised the suo moto revisional power. 28. The additional aspect is that when the Tribunal dismissed the appeal of the appellant by order dated 14.10.2015 and when the observations were made that the revised return could not be accepted after the expiry of six months, the appellant itself challenged the order of the Tribunal before this Court in the above referred proceedings of this Court in STRP No. 117/2016 and allied matters on the ground that such was not the subject matter of the appeal before the Tribunal. In any case, enough opportunity was given to the appellant to satisfy the Revisional Authority by producing documentary evidence to show the subject matter of the appeal before the Tribunal, but the appellant has not availed the opportunity and the Revisional Authority, therefore, is made to pass the appropriate order on merits. 29. In view of the aforesaid peculiar facts and circumstances of the case, we find that the contention that the Revisional Authority ought not to have exercised the suo moto power under Section 64 when the appeal was pending before the Tribunal, does not deserve to be accepted, hence, the same is rejected. 30. Further, if the aspect of prejudicial to the interest of the revenue is considered, the condition is satisfied, because in the first returns the tax liability is shown, whereas in the revised return not only no additional tax liability is shown after taking input tax credit, but huge refund is claimed of about Rs.6.00 lakhs. Therefore, it can be said that by the order of the first appellate authority, the interest of the revenue was prejudiced and therefore, the condition for exercise of the revisional power was satisfied. 31. Therefore, it can be said that by the order of the first appellate authority, the interest of the revenue was prejudiced and therefore, the condition for exercise of the revisional power was satisfied. 31. In view of the aforesaid observations and discussion, we find that no interference is called for in the impugned order passed by the Revisional Authority. Hence, the appeals fail and therefore, they are dismissed. Considering the facts and circumstances, no order as to costs.

Manasa Electricals Co. v. State of Karnataka Financial Secretary