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2019 DIGILAW 1571 (KAR)

Nidhi Interlock Pavers Door v. State Of Karnataka

2019-07-04

S.SUJATHA

body2019
JUDGMENT : S. Sujatha, J. The petitioners have challenged the reassessment orders passed by the respondent No.3 under the provisions of the Karnataka Value Added Tax Act, 2003 ('KVAT Act' for short) as well as the consequential demand notices. 2. The petitioners are the dealers registered under the provisions of the KVAT Act engaged in the activity of manufacturing paver bricks. For the assessment periods in question 2012-13, 2011-12, 2015-16 respectively, re-assessment proceedings were initiated under Section 39(1) of the KVAT Act to determine the tax liability on the paver bricks at 14.5%. Based on the Division Bench decision of this Court in the case of The Asst. Commissioner, Mangalore and others Vs. M/s. H.H.Cement Products and others in Writ Appeal No.5798/2011 and allied matters (D.D.23.3.2016), reassessment proceedings were concluded classifying the paver bricks under the residuary entry taxable at the rate of 14.5%. 3. Being aggrieved by the same, the petitioners are before this court. 4. Learned counsel Sri. Anil Kumar B, appearing for the petitioners submitted that the finding of the respondent No.3 inasmuch as the paver bricks is not coming under entry No.2 of the III schedule is unjustifiable. Though an appeal was preferred before the Hon'ble Apex Court against the decision of this Court in the case of H.H.Cement Products, supra, in view of the assessee opting to avail the statutory remedy, the Hon'ble Apex Court relegated the assesee back to the statutory Appellate Authorities with an observation that the order of the Hon'ble High Court of Karnataka does not come in the way of the statutory Authority while deciding the matter and to take an independent decision. Essentially, the Hon'ble Apex Court nullified the effect of the judgment of the Division Bench of this Court in H.H.Cements, supra. Hence, re-assessments concluded on the basis of the Division Bench ruling of this court levying VAT at 14.5% on the paver bricks is unsustainable. 5. It was further argued that alternative remedy is no bar for this Court to entertain the writ petitions in view of the law well settled on the dispute involved. 6. Learned AGA appearing for the Revenue submitted that the Hon'ble Supreme Court while reserving liberty to the assessee to approach the statutory Authorities has not set aside the ruling of the Division Bench in H.H.Cement Products, supra. 6. Learned AGA appearing for the Revenue submitted that the Hon'ble Supreme Court while reserving liberty to the assessee to approach the statutory Authorities has not set aside the ruling of the Division Bench in H.H.Cement Products, supra. It was observed that the ruling of this Hon'ble Court would not come in the way of the statutory Authority to take an independent view. Subsequent to the said order, the statutory Authority has re-examined the issue without being influenced by the Division Bench ruling and arrived at a finding that the paver bricks are liable to tax at 14.5% as falling under residuary entry. In such circumstances, the petitioners have to approach the Appellate Forum. 7. I have carefully considered the rival submissions of the learned counsel appearing for the parties and perused the material on record. 8. The controversy mainly involved herein is, whether the paver bricks sold by the assessee during the period in dispute is exigible to tax at the rate applicable to the goods falling under the residuary entry or at a lesser rate of tax as applicable to the goods coming under entry No.2 of the III schedule of KVAT Act. 9. In order to address this issue, it is apt to refer to entry No.2 of the III schedule to the KVAT Act which reads as under: "All kinds of bricks including fly ash bricks; refractory bricks and the like; ashphaltic roofing sheets; earthen tiles." 10. This very issue was the subject mater of Writ Appeal No.5798/11 in the case of M/s H.H.Cement Products, supra, wherein the Division Bench of this Court extensively analyzing the issue in the light of various judgments has come to a decision that the attempt of the learned counsel for the assessee that the language used "all kinds of bricks" in entry No.2 of III schedule should be given to the word "bricks", cannot be countenanced for the simple reason that the said expression is followed by the words "the like". It is categorically observed that 'Common parlance test" requires to be applied while interpreting an entry. The said judgment was carried in appeal by the assessee-M/s H.H.Cement Products etc., However the assessee having sought leave of the Court to withdraw the petitions and approach the statutory Authorities, the petitions were dismissed as withdrawn. It is categorically observed that 'Common parlance test" requires to be applied while interpreting an entry. The said judgment was carried in appeal by the assessee-M/s H.H.Cement Products etc., However the assessee having sought leave of the Court to withdraw the petitions and approach the statutory Authorities, the petitions were dismissed as withdrawn. It was made clear that the petitioners are at liberty to produce evidence before the statutory Authorities and the order of this Court shall not come in the way of the statutory Authorities to take an independent view. 11. It is evident that the order of the Division Bench in H.H.Cement Products is not set aside by the Hon'ble Apex Court. It is only at the request of the assessee to withdraw the appeal with liberty to approach the statutory Authorities, permission was granted as sought for, with an observation that the statutory Authority is at liberty to take an independent view in the matter. Hence, the arguments of the learned counsel for the petitioners that the Division Bench ruling, the basis for invoking re-assessment proceedings is nullified, cannot be countenanced. 12. In view of the aforesaid, the petitioners are at liberty to approach the statutory Authorities and produce any additional evidence in support of their claim. Hence, the petitioners can avail the statutory remedy available under the Act. If such an appeal is filed within a period of four weeks from the date of receipt of certified copy of this order, the statutory Authorities shall consider the same on merits without being influenced by the decision of the Division Bench of this court, referred to supra, and shall decide the appeal in accordance with law in an independent manner. With the aforesaid observations and directions, writ petitions stand disposed of.