Karnataka High Court Dismisses Appeal, Upholds Revision Proceedings under KVAT Act
Introduction
The High Court of Karnataka has dismissed an appeal filed by Kalyan Jewellers Salem (Pvt.) Ltd., holding that the suo moto revision proceedings initiated under Section 64(1) of the Karnataka Value Added Tax (KVAT) Act, 2003, were within the prescribed limitation period.
Factual Background
The assessee, Kalyan Jewellers Salem (Pvt.) Ltd., filed an appeal against the order passed by the Additional Commissioner of Commercial Taxes for the assessment year 2010–11, challenging the suo moto revision initiated under Section 64.
Procedural Background
The First Appellate Authority had passed an order on 16.09.2019, and the Additional Commissioner called for records on 21.12.2019 to begin revision proceedings under Section 64. The assessee argued that the revision proceedings were time-barred because the show cause notice was issued beyond the four-year limitation prescribed under Section 64(3)(c).
Issues
The main issue before the court was whether the revision proceedings initiated under Section 64(1) were within the prescribed limitation period.
Contentions of the Parties
Assessee’s Contentions:
- The revision proceedings were time-barred since the show cause notice was issued on 21.11.2024, beyond the four-year limit under Section 64(3)(c).
- The assessee argued that the limitation should be counted from the date of the FAA’s order, not from when records were called for revision.
- •It was further contended that since no appeal was filed against the FAA’s order, the revision was not maintainable under Section 64(3)(a).
Department’s Contentions:
- The revision proceedings were within limitation as the four-year period runs from the date the records were called, not from the date of the show cause notice.
- The appellate order was passed on merits under Section 62, so the bar under Section 64(3)(a) does not apply.
Reasoning & Analysis
The bench of Justice S.G. Pandit and Justice T.M. Nadaf held that the limitation under Section 64(3) must be computed from the date the records were called. Since the records were called on 21.12.2019, within four years from the FAA’s order dated 16.09.2019, the revision was held to be within limitation. The court found no error or perversity in the Additional Commissioner’s exercise of jurisdiction.
Implications
This decision highlights the importance of understanding how the limitation period applies for suo moto revisions under the KVAT Act. It also emphasizes the need for assessees to carefully assess the timelines for challenging orders.
Final Outcome
The court dismissed the appeal, holding that the substantial questions of law raised by the assessee did not arise for consideration. The suo moto revision proceedings under Section 64 of the KVAT Act were upheld as being within the prescribed limitation period.