M/S. MARY CARPENTRY WORKS v. THE STATE OF KARNATAKA

(BY SRI GANGADHAR J.M., AAG FOR SRI SHIVAPRABHU S.HIREMATH, AGA) - PETITIONER - RESPONDENT THIS STRP IS FILED UNDER SECTION 23(1) OF THE KARNATAKA SALES TAX ACT, 1957, AGAINST THE ORDER DATED

18.01.2021 PASSED IN STA NO.10/2017 ON THE FILE OF THE KARNATAKA APPELLATE TRIBUNAL, BENGALURU, HEREBY DISMISSING THE APPEAL FILE UNDER SECTION 22(1) OF THE KARNATAKA SALES TAX ACT, 1957 AND ETC., THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, S G PANDIT, J., MADE THE FOLLOWING: V Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC-D:8324-DB STRP No. 100001 of 2021 ORDER This Sales Tax Revision Petition is filed under Section 23(1) of The Karnataka Sales Tax Act, 1957 (for short ‘Act’) questioning the correctness of order dated 18.01.2021 in STA No. 10/2017 passed by the Karnataka Appellate Tribunal, Bengaluru (for short ‘Tribunal’) and also order dated

22.10.2016 passed by the Joint Commissioner of Commercial Taxes in AP.KST.2014.15.

#2. Heard Sri Narayan G. Rasalkar, learned counsel for the petitioner and Sri Gangadhar J.M, learned Additional Advocate General for the respondent. Perused the petition papers.

#3. Brief facts of the case are that petitioner engaged in the manufacture and sale of wooden goods and frames in Dandeli, is a registered dealer under the then Karnataka Sales Tax Act, 1957 and Central Sales Tax Act, 1956. The case relates to the assessment year 1980-81. On 13.01.1983, assessment order was passed. Petitioner filed appeal before the first appellate authority contending that he has paid excess tax of Rs.72,000/- . It is stated that the litigation went on for more than 15 years. The appellate authority by order dated 24.03.2012 allowed the - 3 - NC: 2024:KHC-D:8324-DB STRP No. 100001 of 2021 appeal. Thereafter, the petitioner filed petition before assessing authority under Section 20(1) of the Act claiming interest from the date of payment till refund. The same was rejected and against the said rejection, petitioner filed first appeal under Section 20(5) of the Act before Commissioner. The appellate authority by order dated

22.10.2016 rejected the appeal. Against the said rejection, petitioner filed appeal before the Karnataka State Appellate Tribunal in STA No. 10/2017. The Tribunal under impugned order dated 18.01.2021 confirmed the order passed by the assessing authority as well as the first appellate authority and held that the petitioner would be entitled for interest from the date of refund order in terms of Sec. 13.A of the Act. Challenging the orders of the first appellate authority as well as the Tribunal, the petitioner is before this Court in this revision petition.

#4. Sri Narayan G. Rasalkar, learned counsel for the petitioner would submit that the orders of the appellate authority as well as the Tribunal are wholly erroneous and have failed to appreciate that whenever illegally collected tax is ordered to be refunded, assessee would be entitled for interest - 4 - NC: 2024:KHC-D:8324-DB STRP No. 100001 of 2021 from the date of collection of such illegal tax. Thus, learned counsel would submit that the assessee, the petitioner herein, would be entitled for interest from the date of collecting excess tax. He would further submit that the petitioner had prayed before the Tribunal to read down Sec. 13.A of the Act and to grant interest from the date of collection of excess tax. Thus, he would pray for allowing the petition. Learned counsel would submit that the petitioner has raised questions of law as under: (a) Whether in the facts and circumstances of the case, the Hon’ble Karnataka Appellate Tribunal has either failed to decide or decided erroneously the questions of law involved while passing the impugned appeal order and whether such an order is justifiable and is in accordance with law? And (b) Whether in the facts and circumstances of the case, the Hon’ble Karnataka Appellate Tribunal has erroneously decided on merit of the case, while dismissing the appeal on the ground of jurisdiction? (c) Whether the Hon’ble Appellate Tribunal has erroneously decided the question of law as to the reading down the provisions of Section 13.A with reference to the provisions of Section 12.B(2) of the KST Act, 1957 treating erroneously that the same amounts to challenging the vires of the provisions of Section 13.A of the KST Act, 1957 and whether it is justified in dismissing the appeal on this ground? (d) Whether in the facts and circumstances of the case, the Hon’ble Karnataka Appellate Tribunal has erroneously decided the interest payable to the Appellant on return of illegally - 5 - NC: 2024:KHC-D:8324-DB STRP No. 100001 of 2021 collected amounts allegedly as tax and penalty as that of a Refund of tax bringing it within the scope of Section 13.A of the KST Act, 1957 only? (e) Whether in the facts and circumstances of the case, the Karnataka Appellate Tribunal has failed to decide the question of law correctly relating to the grant of interest at the rate of 2 per cent per month in par with the provisions of Section 12- B(2) of the KST Act, 1957? (f) Whether in the facts and circumstances, the Karnataka Appellate Tribunal has failed to decide all the issues involved in the case also the application of the interest Act, that were raised before them correctly, fully and finally? (g) Whether the Karnataka Appellate Tribunal has erroneously decided the relevancy of application of the precedents quoted by it to the issues involved in this case and facts of the case? (h) Any other question of law that this Hon’ble Court may deem fit to raise for its decision in the facts and circumstances of the case.

#5. Per contra, Sri Gangadhar J.M, learned Additional Advocate General would support the order passed by the Tribunal as well as the authorities. Further it is submitted that the Act would provide for payment of interest u/S 13.A of the Act. When the Act itself makes provision for payment of interest, the authorities are bound to pay interest in terms of the said provision. Further, there is no challenge to Sec.13.A of the Act and in that circumstance it is not open for the petitioner - 6 - NC: 2024:KHC-D:8324-DB STRP No. 100001 of 2021 to claim interest from the date of payment of excess tax. Thus, he prays for dismissal of the revision petition.

#6. Having heard the learned counsel for the parties and on perusal of the revision petition papers, we are of the opinion that no question of law would arise for consideration in terms of Sec. 23(1) of the Act. U/s 23(1) of the Act, it is open for the petitioner to prefer petition to the High Court against the order of the Tribunal on the ground that the Tribunal has either failed to decide or decided erroneously any question of law. Admittedly, appeal filed against collection of excess tax is allowed by the first appellate authority under order dated

24.03.2012 and in terms of the said order, voucher is raised for refund on 20.09.2013. In terms of Sec. 13.A of the Act, the petitioner would be entitled for interest from 24.03.2012, the date of the order passed by the first appellate authority allowing his appeal. Sec. 13.A of the Act provides for payment of interest. In terms of Sec. 13.A of the Act the petitioner herein would be entitled for interest in terms of Sec. 13.A(b). The Tribunal where the petitioner had prayed to read down Sec. 13.A of the Act, has rightly answered stating that it is - 7 - NC: 2024:KHC-D:8324-DB STRP No. 100001 of 2021 outside the purview of the jurisdiction of the Tribunal and it was also outside the scope of the appeal.

#7. There is no merit in any of the contentions raised by the petitioner. As no question of law would arise for consideration, the petition stands rejected. Pending applications, if any, also stand disposed off. Sd/- JUDGE Sd/- JUDGE BVV List No.: 1 Sl No.: 16