HC quashes reassessment u/s 39 of Karnataka VAT Act denying input tax credit (ITC) to assessee-lessor on ground that tax invoice in respect of purchase of motor vehicles did not bear its name; Accepts assessee’s plea that said findings are clearly arbitrary and that prescribe authority committed an error by not appreciating invoices raised by selling dealer in proper perspective, which was apparent on face of record and rejecting its rectification applicationwithout assigning any reasons;
Observes, it is undisputed that output VAT had been collected and remitted to Department by selling dealer and for purpose of complying with provisions of Motor Vehicles Act, 1988 (MV Act), lessee had to be shown as registered owner for all practical purposes; Holds, there is a clear violation of principles of natural justice absent any exercise by prescribed authority to determine whether registration certificate was standing in lessee’s name and same could be accepted under KVAT Act, or whether tax invoices were in conformity with prescribed Rules, in which case relegating assessee to appellate forum would be inappropriate; “There is no hard and fast rule…Scope and extent of principles of natural justice cannot be laid down in a straitjacket formula…It is imperative that decision making process is subjected to judicial review rather than the decision” remarks HC, while remanding the matter for reconsideration: Karnataka HC
Citation: [TS-90-HC-2018(KAR)-VAT]