Yes Bank Limited Vs State of Karnataka (Karnataka High Court)
Summary: The Karnataka High Court dismissed the Sales Tax Revision Petition filed by Yes Bank Limited under Section 65 of the Karnataka Value Added Tax Act, 2003 (KVAT Act), holding that no substantial question of law arose from the Karnataka Appellate Tribunal’s decision upholding reassessment, tax, penalty and interest for AY 2012-13.
Yes Bank, a banking company and financial institution also engaged in the sale of gold and silver bullion, had disclosed purchase turnover in its books but discrepancies were found between the purchase figures in its books and those reported in monthly VAT-100 returns for October, November and December 2012. The Bank contended that the omission was inadvertent and clerical and that the correct purchase figures had subsequently been disclosed in Form VAT-240. It also relied upon its books of account, audited financial statements and reconciliation statement to contend that there was no corresponding suppression of sales turnover.
Following an inspection on 18.02.2015 and subsequent proceedings, reassessment was initiated for the period 01.04.2012 to 31.03.2013. By reassessment order dated 25.10.2017 under Sections 39, 36(2) and 72(2) of the KVAT Act, the Assessing Authority treated the alleged unreported purchases as corresponding undeclared sales and enhanced turnover by Rs.6,33,47,526/-. Tax at 1% amounting to Rs.6,33,476/-, penalty of Rs.63,348/- and interest of Rs.5,64,451/- were levied, aggregating to Rs.12,61,275/-.
