HC directs dept to consider C Forms which could not be produced due to COVID 19

Vodafone Idea Limited Vs Union of India (Karnataka High Court)

The Hon’ble High Court of Karnataka quashes the assessment order and restores the matter back to the assessing officer to consider the C Forms which could not be produced due to COVID 19 pandemic

The petitioner provides telecommunication service. It is a registered dealer. There were inter-state supplies. The petitioner could not produce C forms due to outbreak of COVID-19 pandemic. Assessment order was passed. Recovery was initiated. The petitioner applied for rectification. The order was rectified. Against such order, appeal was filed before the appellate authority. The stay application was disposed off stating that the recovery has been effected. Hence, petitioner is before the court seeking setting aside of such recovery action in excess of 30% of the tax demand (i.e. mandatory deposit for filing appeal).

The Hon’ble High Court of Karnataka quashes the assessment order and restores the matter back to the assessing officer to consider the C Forms which could not be produced due to COVID 19 pandemic. Holds that the petitioner should not be exposed to the travails of multiple proceedings. The matter is remanded for complete re-adjudication.

The matter was argued by the Ld. Counsel Bharat Raichandani

FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT AT BANGALURU

The petitioners in each of these petitions have impugned the Communications dated 27.10.2020 [Annexure-A] addressed by the fourth respondent to the corresponding bankers for recovery of demand as per the assessment order dated 18.09.2020 and for a direction to the fourth respondent to return the amount recovered consequent to such communication in excess of 30% of the demand along with interest.

2. These writ petitions relate to the same tax periods but to different assessees who are now one entity consequent to certain approved merger. Sri Bharath Raichandani, the learned counsel for the petitioner, and Sri Hema Kumar K, the learned Additional Government Advocate, are heard for final disposal of these petitions.

3. The petitioners, after the assessment orders dated 18.09.2020 which are similar but for different tax periods, have filed applications for rectification of these orders. These applications are considered and the demand is revised by the orders dated 06.11.2020. In the meanwhile, the impugned communication dated 27.10.2020 are issued resulting in recovery of the amount in terms of the assessment orders dated 18.09.2020. The petitioners have filed respective appeals in Nos.357087702 and 327087703 against the aforesaid orders. The petitioners’ applications for stay are rejected by the endorsements which read that there would be no occasion for stay in as much as the amounts under demand are recovered.

4. Sri Bharat Raichandani, reiterating the circumstances as aforesaid, canvasses that the fourth respondent’s action in issuing the impugned Communications dated 27.10.2020 to the petitioner’s banker and in realizing the entire amount, notwithstanding the remedy available to the petitioner in law, would amount to denial of opportunity. He further submits that these proceedings are because the petitioner has not furnished the Statutory Forms viz., C-Forms for the period when there was onset of lock down/restrictions because of COVID-19. The petitioner will produce Statutory C-Forms before the fourth respondent – the Assessing Officer – if an opportunity is granted, and the fourth respondent can be directed to o=consider framing assessment in the Statutory C-Forms.

5. Sri Hema Kumar K, the learned Additional Government Advocate, submits that the petitioner really cannot have a grievance because it is only after communication dated 27.10.2020 and the consequential realisation of the amounts in the petitioner’s account towards the amounts demanded, the petitioner has filed an application for rectification which is decided on 06.11.2020. However, when queried, he does not controvert that there can be multiple assessments, and if an assessee can justify failure to produce Statutory Forms at the relevant time but can now produce them later, there could be reassessment. He also does not controvert that if the petitioner can produce the Statutory C-Forms even now, the assessing officer [the fourth respondent] can revisit the assessment in the light of the statutory forms that the petitioner can produce.

6. In the light of the submissions and in the peculiarities of the case, the question for consideration would be whether this Court must dispose of the petitionz with only orders on the petitioner’s grievance as against the communications dated 27.10.2020 in order to enable effective and complete adjudication. If the law does not prohibit multiple assessments under circumstances and such circumstances could include the subsequent production of statutory C-forms, the petitioner should not be exposed to the travails of multiple proceedings. This Court must also consider the fact that the department has realised the entire demand as way back as in the month of November 2020¹.

7. If the petitioner is permitted to produce the Statutory C-Forms and the fourth respondent is directed to reconsider assessment the petitioner’s grievance not just against the realisation of the demand but also framing of assessment, there would complete adjudication. As such, the petitions must be disposed of quashing the orders dated 18.09.2020 by the fourth respondent with liberty to both the parties and authorities to place a certified copy of this order before the fifth respondent for disposal of the appeals in Nos.357087702 and 327087703 consequent to this order. Hence, the following:

ORDER

[i] The petitions are disposed of quashing the fourth respondent’s orders dated 18.09.2020 and consequentially, the assessment proceedings are restored to the fourth respondent for reframing with due opportunity to the petitioner to file Statutory C-Forms.

[ii] The petitioner, to avail due opportunity, shall appear before the fourth respondent without further notice on 26.05.2023, and shall be at liberty to produce the Statutory C-forms either on that day or on any such further date as may be allowed by the fourth respondent,

[iii] The petitioner shall under all circumstances decide on reframing of the assessment in the light of the Statutory C-Forms produced within an outer limit of four [4] weeks from the date of receipt of such statutory forms.

[iii] The petitioner shall appear before the fourth respondent without further notice on 26.05.2023.

Notes:-

1 Sri Hema Kumar K, learned Additional Government Advocate also submits that the amount is realised only after the lapse of the appeal period as against the order dated 18.11.2020.