Mukand Limited Vs State of Karnataka (Karnataka High Court)
In this case before the Karnataka High Court, the petitioner challenged the validity of Section 10(3) of the Karnataka Value Added Tax Act, 2003, seeking its interpretation in line with the object and scheme of the Act, along with a challenge to a reassessment order dated 31.10.2015 for the tax period April 2010 to March 2011. The petitioner also sought a direction for refund of the amount claimed in its returns. The Court noted that the issue was already settled in an earlier batch of writ petitions, where it was held that Section 10(3) had been consistently interpreted to allow deduction of input tax credit irrespective of the month of purchase, provided supporting documents existed. The ambiguity arose due to departmental interpretation, and the subsequent amendment was clarificatory with retrospective effect. Following this precedent, the Court read down Section 10(3) accordingly, quashed the impugned reassessment order, and remitted the matter to the authority for fresh consideration in accordance with law within 60 days.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
1. In this writ petition petitioner is questioning the virus of Section 10(3) of the Karnataka Value Added Tax Act, 2003, with a prayer that the said provision be read down keeping in mind the object and scheme of the Act. Challenge is also laid to the impugned re-assessment order dated 31.10.2015 (Annexure-F) passed by the 2nd respondent-Deputy Commissioner, Commercial Taxes (Audit & Recovery) Ballari for the tax period from April-2010 to March-2011. Petitioner has also sought for a direction to 2nd respondent to grant refund of total amount claimed by petitioner in its returns filed for the tax period from April-2010 to March-2011.
