Karnataka HC directs Dy VAT Commissioner to pay Sales Tax for passing a Whimsical Order [Read Judgment]

The Karnataka High Court has imposed a cost of Rs. 50000/- on the Deputy VAT Commissioner for whimsical sales tax assessment order against the assessee. To be deducted from her salary and deposited in the Prime Minister’s Relief Fund.

Before the Court, the petitioners contended that under the specific Notification No. FD 82 CSL 10(VI), Bangalore, dated 31.03.2010, they were entitled to pay only 5% of the tax on the difference of value between the taxable turnover in respect of such sales of used motor vehicles and the amount paid towards the purchase of such used motor vehicles. The grievance of the petitioner was that the Assessing Authority ignored the notification and demanded the purchase tax from the assessee. Also, the authority has denied their claim of input tax credit.

The Court noted that the assessee during the relevant period has dealt with the business of sales and purchase of used cars only and therefore, the applicability of the said Notification on all fours on the case of the present assessee for the period in question is not in dispute and denied.

Justice Vinod Kothari observed that “this Court is surprised and is pained by the manner in which the authority has passed the impugned reassessment order in the second round of assessment for the period 01.04.0211 to March 2012 just ignoring the applicable Notification and throwing it to winds. The said order is, therefore, nothing less than suffering from malice-infacts as well as malice-in-law. Therefore, the said responsible officer deserves to pay the exemplary costs for passing such whimsical order and the writ petition deserves to be allowed.”

Accordingly, the Court directed the Assessing Authority Ms.K.C.Sujatha, Deputy Commissioner of Commercial Taxes (Audit) – 2.4, Bengaluru to deposit the costs quantified at Rs.50,000/- from her personal resources with the Registrar General of this Court within a period of one month.

The amount upon deposit shall be remitted to the ‘Prime Minister’s Relief Fund’, Delhi, for meeting the costs of relief to sufferers of natural disasters, the Court said.