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Karnataka High Court

M/S Marico Industries Ltd vs State Of Karnataka on 24 April, 2026

Author: S.G.Pandit

Bench: S.G.Pandit

                                          -1-
                                                     STRP No. 3 of 2020



                Reserved on   : 09.04.2026
                Pronounced on : 24.04.2026

                     IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                         DATED THIS THE 24TH DAY OF APRIL, 2026

                                       PRESENT

                          THE HON'BLE MR. JUSTICE S.G.PANDIT

                                          AND

                         THE HON'BLE MR. JUSTICE K. V. ARAVIND

                       SALES TAX REVISION PETITION No. 3 OF 2020

                BETWEEN:

                1.    M/S MARICO INDUSTRIES LTD.,
                      MYSORE DEVIATION ROAD,
                      NEAR MINERVA MILLS,
                      BENGALURU-560023,
                      (NOW M/S MARICO LTD.,
                      MAKALI VILLAGE, SY No.10,
                      DASANAPURA HOBLI, BANGALORE,
                      BENGALURU(BANGALORE) NORTH,
                      KARNATAKA, 562162.
                      REPRESENTED BY ITS
Digitally
signed by             AUTHORISED SIGNATORY,
VINUTHA B S           MR. BHART PADGULEKAR,
Location:             AGED ABOUT 55 YEARS,
High Court of         S/O MR. NARAYAN PADGULEKAR.
Karnataka                                                 ...PETITIONER
                (BY SRI THIRUMALESH M., ADVOCATE)
                AND:

                1.    STATE OF KARNATAKA,
                      REPRESENTED BY PRINCIPAL
                      SECRETARY TO GOVERNMENT,
                      FINANCE DEPARTMENT,
                      GOVERNMENT OF KARNATAKA,
                           -2-
                                     STRP No. 3 of 2020



     VIDHANA SOUDHA,
     BENGALURU-560001.

2.   COMMISSIONER OF COMMERCIAL TAXES
     KARNATAKA,
     VANIJYA THERIGE KARYALAYA,
     GANDHINAGAR,
     BENGALURU-560009.

3.   JOINT COMMISSIONER OF COMMERCIAL
     TAXES(APPEALS)-2, 2ND FLOOR,
     TTMC BUILDING, SHANTINAGAR,
     BENGALURU-560027.

4.   DEPUTY COMMISSIONER OF COMMERCIAL
     TAXES(AUDIT AND REC)-2.8, DVO-2,
     VANIJYA THERIGE KARYALAYA-2,
     KORAMANGALA,
     BENGALURU-560047.
                                         ...RESPONDENTS
(BY SRI ADITYA VIKRAM BHAT, AGA FOR R1 TO R4)


     THIS STRP IS FILED UNDER SECTION 65(1) OF THE
KARNATAKA VALUE ADDED TAX ACT,2003, AGAINST THE
ORDER DATED 24.06.2019 PASSED IN ST RECTIFICATION
APPLICATION No.05 TO 07/2018 (IN STA Nos. 304 TO
306/2016) ON THE FILE OF THE KARNATAKA APPELLATE
TRIBUNAL AT BANGALORE, REJECTING THE APPLICATIONS
FILED FOR RECTIFICATION OF THE COMBINED JUDGMENT
PASSED BY THIS TRIBUNAL IN STA.No.304 TO 306/2016
DATED 25.01.2018 DISMISSING THE APPEALS FILED BY THE
APPELLANT AGAINST THE COMBINED APPELLATE ORDER
PASSED BY JCCT (APPEALS)-2, BENGALURU IN KST AP Nos.1
TO 3/12-13 DATED 22.12.2015.

     THIS PETITION HAVING BEEN HEARD AND RESERVED
FOR JUDGMENT, COMING ON FOR PRONOUNCEMENT THIS
DAY, K.V. ARAVIND J., DELIVERED THE FOLLOWING:-

CORAM:   HON'BLE MR. JUSTICE S.G.PANDIT
         and
         HON'BLE MR. JUSTICE K. V. ARAVIND
                                 -3-
                                              STRP No. 3 of 2020




                         C.A.V. ORDER

           (PER: HON'BLE MR. JUSTICE K. V. ARAVIND)

     Heard Sri. M. Thirumalesh, learned counsel for the

petitioner-Assessee and Sri. Aditya Vikram Bhat, learned

Additional Government Advocate for respondent Nos.1 to 4-

Revenue.


2.   This Sales Tax Revision Petition is filed under Section

23(1) of the Karnataka Sales Tax Act, 1957 (for short, "the KST

Act"), by the dealer, calling in question the order passed by the

Karnataka    Appellate   Tribunal,    Bengaluru   (for   short   "the

Tribunal"), in ST Rectification Application Nos.05 to 07/2018 (in

STA Nos.304 to 306/ 2016), dated 24.06.2019.


3.   The facts, in brief, are that the petitioner is a dealer

registered under the Karnataka Sales Tax Act, 1957 (for short,

"the KST Act"), and is engaged in the business of edible

coconut oil and coconut hair oil under the brand names

"Parachute", "Oil of Malabar", "Parachute Jasmine" and "Hair

and Care". The assessment orders for the assessment years

2002-03, 2003-04 and 2004-05 were passed levying tax on

the sale of coconut oil sold under brand names by applying Sl.

No.17-A of Part 'C' of the Second Schedule at the rate of 20%.
                                     -4-
                                                  STRP No. 3 of 2020



3.1    The said Entry 17-A was challenged by the petitioner in

Writ   Petition    No.28125/2002,          contending    that     it     was

discriminatory and violative of Articles 14 and 16 of the

Constitution of India. The writ petition was allowed and the

amendment      was      struck     down.   However,     the     orders    of

assessment were not set aside in the said writ proceedings.


3.2    The order passed in the writ petition was challenged in

Writ Appeal No.649/2006. The Division Bench, by order dated

15.12.2009, reported in 2011 (70) KLJ 93, set aside the order

of the learned Single Judge and upheld the validity of the

amendment.        The   Division    Bench,    however,    directed       the

Revenue to consider the case of the assessee having regard to

the distinction between sale of coconut oil as pure coconut oil

and as hair oil.


3.3    Pursuant thereto, the petitioner filed an application dated

18.01.2010 seeking rectification of the assessment order in

conformity with the judgment of the Division Bench. The said

application was not rejected within a period of 60 days and,

therefore, it is the case of the petitioner that the same stood

deemed to have been allowed in terms of the proviso to Section

25-A(1) of the KST Act.
                                -5-
                                            STRP No. 3 of 2020



3.4   According to the petitioner, the refund ought to have

been granted within 90 days from the deemed date. The

deemed date is stated to be 22.03.2010 and the expiry of 90

days under Section 13-A of the KST Act is stated to be

22.06.2010. However, the adjudicating authority passed an

order of rectification on 08.04.2010.


3.5   The said order of rectification was set aside by the Joint

Commissioner of Commercial Taxes in exercise of powers under

Section 21(2) of the KST Act, by order dated 14.01.2011, and

the Assessing Authority was directed to pass fresh orders in the

light of the judgment of the Division Bench of this Court.

Pursuant thereto, the Assessing Authority passed a fresh order

on 16.08.2011. It is stated that a refund notice was issued on

20.08.2011.


3.6   The fresh assessment order dated 16.08.2011, along with

the refund order, was challenged before the Joint Commissioner

of Commercial Taxes (Appeals), and the appeal came to be

dismissed on 17.12.2011. Thereafter, a pay order was issued

on 09.01.2012. It is further stated that the request for grant of

interest was rejected on 17.07.2012. The said order rejecting

the claim for interest was challenged before the Tribunal in STA
                                     -6-
                                                STRP No. 3 of 2020



Nos. 304, 305 and 306/2016. The Tribunal, by order dated

25.01.2018, rejected the appeals.


3.7   The petitioner thereafter filed ST Rectification Application

Nos.05 to 07/2018 under Section 63(9)(a) of the Karnataka

Value Added Tax Act, 2003 (for short, "the KVAT Act") before

the Tribunal, which came to be rejected by order dated

24.06.2019.


4.    Sri M. Thirumalesh, learned counsel appearing for the

petitioner, submits that the assessment orders were passed

levying tax at the rate of 20%. The assessment order for the

assessment year          2002-03    is dated 20.08.2003, for the

assessment year 2003-04 is dated 23.06.2004, and for the

assessment year 2004-05 is dated 12.04.2005. It is submitted

that the petitioner had challenged the constitutional validity of

the amendment imposing tax at 20%. The learned Single Judge

allowed     the   writ   petition   and   quashed   the   amendment.

However, in the appeal preferred by the State, the Division

Bench set aside the order of the learned Single Judge while

upholding the validity of the amendment, and clarified the legal

position.
                                -7-
                                             STRP No. 3 of 2020



4.1   It is further submitted that the petitioner filed an

application for rectification on 18.01.2010 seeking modification

of the assessment orders in conformity with the judgment of

the Division Bench of this Court. It is contended that, in terms

of the second proviso to Section 25-A(1) of the KST Act, such

an application cannot be rejected after the expiry of 60 days,

and consequently, the same is deemed to have been allowed.


4.2   Learned counsel submits that, in terms of Section 13-A of

the KST Act, if the refund is not granted within 90 days, the

petitioner would be entitled to interest at the rate of 6% per

annum for the period of delay. It is submitted that the

rectification application is to be reckoned from 22.01.2010, the

deemed date of rectification is 22.03.2010, and the period of

90 days expired on 22.06.2010. However, the refund was

granted only on 09.01.2012. It is therefore contended that

there is a delay of one year, six months and eighteen days, for

which the petitioner is entitled to interest at the rate of 6% per

annum.


4.3   Learned counsel for the petitioner submits that the order

of rectification dated 08.04.2010 is contrary to the proviso to

Section 25-A(1) of the KST Act. It is contended that, in the
                                   -8-
                                               STRP No. 3 of 2020



absence of a valid application, no rectification could have been

undertaken.   It   is   further   submitted   that   the   Suo   Motu

Revisional Authority has set aside the said order of rectification,

holding the same to be without jurisdiction, and directed a

fresh assessment. Pursuant to the order of the Suo Motu

Revisional Authority, a fresh assessment was made, against

which a refund came to be issued.


4.4   Learned counsel submits that the challenge to the said

fresh assessment order, as well as the refund order, was

rejected, however, in view of the proviso to Section 25-A(1) of

the KST Act, all consequential proceedings subsequent to

08.04.2010 are rendered invalid and non est in the eye of law.

It is further contended that, though the Tribunal has not denied

the entitlement of the petitioner to interest, it has erred in

computing the relevant period. Accordingly, it is submitted that

the petitioner is entitled to interest on the refund for the

delayed period from 22.06.2010 to 09.01.2012.


4.5   Learned counsel for the petitioner, in support of his

submissions, has placed reliance on the judgment of a Co-

ordinate Bench of this Court in Wipro Limited, Infotech
                                  -9-
                                              STRP No. 3 of 2020



Group, Belagola Industrial Area, Metagalli, Mysore v.

State of Karnataka, reported in 2021 (99) KGST L.J. 701.


5.    Per contra, learned AGA appearing for the respondents

submits that the order of the Division Bench dated 15.12.2009

was communicated to the Assessing Authority on 23.03.2010.

Taking note of the said judgment, the rectification order dated

08.04.2010 came to be passed. It is contended that the

authorities are not precluded from passing more than one

rectification   order.   Even   assuming   that   the   rectification

application dated 18.01.2010 is deemed to have been allowed,

the same would not disentitle the authorities from passing a

subsequent rectification order in accordance with law.


5.1   It is further submitted that, by the revisional order dated

14.01.2011, the rectification order dated 08.04.2010 was set

aside, with a direction to the Assessing Authority to pass a

fresh assessment. Pursuant thereto, a fresh assessment order

was passed and refund was issued. Learned AGA submits that

the appeal challenging the fresh assessment order as well as

the refund order came to be dismissed by the appellate

authority by order dated 17.12.2011, and the said order has

attained finality, as the same has not been challenged further.
                                   - 10 -
                                                       STRP No. 3 of 2020



5.2   It is further    submitted that, while                 considering the

challenge to the order rejecting the request for interest, the

Tribunal, by its order dated 25.01.2018, rejected the appeals

by holding that the relevant period is to be reckoned from

23.03.2010, i.e., the date on which the copy of the judgment of

the Division Bench was made available to the Assessing

Authority. It is therefore contended that the impugned order

rejecting the rectification application by order dated 24.06.2019

is justified. It is also submitted that, in the absence of a

challenge to the main order dated 25.01.2018, the order

rejecting the rectification application cannot be independently

assailed.


6.    We have considered the submissions made by learned

counsel for the parties and perused the appeal papers.


7.    This petition was admitted, by order dated 12.07.2021, to

consider the following substantial questions of law:

      "i.   Whether in the facts and circumstances of the
            case of the petitioner, the Tribunal did not
            commit    serious    error      of   law    in    having
            pronounced the decision as in paragraph 35 of
            the   impugned      order      making      an    unlawful
            turnaround and departure from own findings of
            facts and law brought on record of paragraph 6
                                      - 11 -
                                                       STRP No. 3 of 2020



             of   the    impugned        order   by    which       the
             rectification applications filed by the petitioner
             in ST Retfn. No.5-7/2018 were ordered for
             admission?


      ii.    Whether in the facts and circumstances of the
             case of the petitioner, the Tribunal did not
             commit a serious error of law in having
             pronounced decision that the petitioner did not
             make out sufficient grounds either factually or
             legally for interference with the judgment
             passed in STA. No.304-306/2016 it being
             diametrically opposite of the reiterated recitals
             of the Tribunal itself in all the preceding
             paragraphs of the impugned order?"



8.    The Assessing Authority completed the assessments on

20.08.2003 for the assessment year 2002-03, on 23.06.2004

for the assessment year 2003-04, and on 12.04.2005 for the

assessment year 2004-05. In the said assessments, tax at the

rate of 20% was levied. The petitioner challenged Entry 17-A in

Part 'C' of the Second Schedule to the KST Act by filing Writ

Petition No.28125/2002. The learned Single Judge, while

allowing    the   writ   petition,      declared      the   said     entry   as

unconstitutional.


8.1   Aggrieved thereby, the State preferred Writ Appeal

No.649/2006 before the Division Bench. The Division Bench,
                                 - 12 -
                                               STRP No. 3 of 2020



while upholding the constitutional validity of the said entry,

held as under:

     "7.    Having seen the material produced before us and
     also considering that even a coconut oil manufactured
     by a particular industry cannot be sold without a brand
     name, it would be difficult for us to accept the
     arguments advanced by the learned Government
     Advocate to say that any coconut oil sold under a brand
     name either in sachet or bottle has to be treated as a
     toilet article. We refuse to accept the arguments of the
     Government Advocate to treat the coconut oil sold in a
     brand name either in sachet or bottle as a toilet article.
     By looking into the ingredients of the coconut oil sold by
     two different companies, it is clear it is only a pure
     coconut oil and neither meant as edible oil nor as hair
     oil. But the bottle produced by the respondent--
     assessee of Parachute company has got two brand
     names, one is sold as a pure coconut oil and another is
     a coconut hair oil. The ingredients of the hair oil sold
     under the name of Parachute has got a different
     ingredients than the one manufactured and sold by the
     same company as 100 per cent pure coconut oil.
     Considering these aspects, we are of the opinion that
     the learned judge has not taken into account distinction
     between the hair oil and edible oil. Since this aspect has
     not been considered, we are of the view the learned
     judge has committed an error in granting a relief to the
     assessee       in   declaring   the     amendment       as
     unconstitutional in violative of article 14 of the
     Constitution of India.

     8.     Considering the facts and background of the
     amendment brought in, we are of the view that
     whenever coconut oil is manufactured and sold as hair
     oil, the same would attract tax at higher rate of 15 per
     cent and 20 per cent as per the amendment brought to
     the Karnataka Sales tax Act, and coconut oil sold as
     pure coconut oil, as a brand name would attract only
     four per cent as the same can be used as an edible oil
     not exclusively as a toilet articles. In view of this
     distinction, we allow this appeal."
                                 - 13 -
                                               STRP No. 3 of 2020



8.2   The petitioner filed a rectification application dated

18.01.2010 seeking rectification of the aforesaid assessment

orders in the light of the law declared by the Division Bench.

The said applications were received in the office of the Deputy

Commissioner of Commercial Taxes, Bangalore, on 22.01.2010.

The application enclosed a copy of the judgment of the Division

Bench as well as copies of the original assessment orders

sought to be rectified.


8.3   The rectification of mistakes is governed by Section 25-A

of the KST Act, which reads as under:

      "25A. Rectification of mistakes.-(1) With a view to
      rectifying any mistake apparent from the record, the
      assessing authority, appellate authority or revising
      authority, may, at any time, within five years from the
      date of an order passed by it, amend such order:
      Provided that an amendment which has the effect of
      enhancing an assessment or otherwise increasing the
      liability of the assessee shall not be made unless the
      assessing authority, appellate authority or revising
      authority, as the case may be, has given notice to the
      assessee of its intention to do so and has allowed the
      assessee a reasonable opportunity of being heard.

      Provided further that where an application is made by
      an assessee for rectification of any mistake in an order,
      as being apparent from the record and, such application
      has not been rejected by the assessing authority within
      sixty days from the date of receipt of the application,
      the order shall be deemed to have been amended
      rectifying such mistake.

      (2) Where an order has been considered and decided in
      any proceedings by way of appeal or revision relating to
      an order referred to in sub-section (1), the authority
      passing such order may, notwithstanding anything
                                - 14 -
                                              STRP No. 3 of 2020



      contained in any law for the time being in force, amend
      the order under that sub-section in relation to any
      matter other than the matter which has been so
      considered and decided.

      (3) An order passed under sub-section (1), shall be
      deemed to be an order passed under the same provision
      of law under which the original order, the mistake in
      which was rectified, has been passed."

      In view of the legal fiction engrafted in the second

proviso, where an application made by the assessee for

rectification is not rejected by the Assessing Authority within a

period of 60 days from the date of its receipt, the order is

deemed to have been amended so as to rectify the mistake.


8.4   In the present case, no order rejecting the rectification

application has been passed. However, it is the contention of

the State that the order of the Division Bench was made

available to the Assessing Authority only on 23.03.2010 and,

taking note of the same, a rectification order came to be

passed on 08.04.2010. It is, however, not clear as to whether

the said rectification order dated 08.04.2010 was passed

pursuant to the rectification application dated 18.01.2010 or in

exercise of suo motu powers.


8.5   The rectification order dated 08.04.2010 was subjected to

revisional jurisdiction under Section 21(2) of the KST Act. By
                                    - 15 -
                                                     STRP No. 3 of 2020



order dated 14.01.2011, the said rectification order was set

aside, with a direction to the Assessing Authority to pass a

fresh order in the light of the judgment of the Division Bench.

In     compliance    with    the   said     revisional    order,    a    fresh

assessment was made on 16.08.2011. It is also not in dispute

that a refund notice was issued and the refund was granted.


8.6     The petitioner challenged the fresh assessment order as

well    as   the    refund   order    in    appeal       before    the   Joint

Commissioner of Commercial Taxes (Appeals), and the said

appeal came to be dismissed on 17.12.2011. Thereafter, a pay

order was issued on 09.01.2012. The request for grant of

interest on the delayed refund was rejected on 17.07.2012. The

challenge to the said order culminated in dismissal of the

appeal by the Tribunal by order dated 25.01.2018.


8.7     It is not in dispute that the fresh assessment order dated

16.08.2011, the revisional order dated 14.01.2011, and the

appellate order dated 17.12.2011 have not been challenged

and have thus attained finality. The Tribunal, while rejecting

the appeal by order dated 25.01.2018, though accepted the

petitioner's entitlement to interest, reckoned the relevant

period from 23.03.2010, i.e., the date of receipt of the copy of
                               - 16 -
                                            STRP No. 3 of 2020



the judgment of the Division Bench by the Assessing Authority.

On the same reasoning, the rectification application has also

been rejected, which is impugned in the present appeal.


9.    The order of the Tribunal is not sustainable for more than

one reason. The original assessments were completed in the

years 2003, 2004 and 2005 for the assessment years 2002-03,

2003-04 and 2004-05, levying tax at a higher rate. The

petitioner had challenged Entry 17-A in Part 'C' of the Second

Schedule to the KST Act in Writ Petition No.28125/2002,

wherein the said entry was initially quashed. However, the

Division Bench, while setting aside the order of the learned

Single Judge, upheld the constitutional validity of the said

entry.


9.1   There is no dispute with regard to the petitioner's

entitlement to refund in the light of the law declared by the

Division Bench. The controversy is confined only to the delay

and the period of such delay. Though the Tribunal has observed

that there was a delay of a few days, it has erroneously

reckoned the period from 23.03.2010, proceeding on the basis

that the judgment of the Division Bench was brought to the

notice of the Assessing Authority only on that date.
                                     - 17 -
                                                       STRP No. 3 of 2020




9.2   The said reasoning is clearly untenable. The petitioner

had   filed   the   rectification     application      dated    18.01.2010

enclosing a copy of the judgment of the Division Bench dated

15.12.2009, which was received by the Assessing Authority on

22.01.2010. Thus, it is evident that the Assessing Authority had

knowledge of, and was in possession of, the judgment of the

Division Bench as on 22.01.2010.


9.3   The rectification application dated 18.01.2010 was not

rejected within the period of 60 days as stipulated under

Section 25-A of the KST Act. In view of the second proviso to

Section 25-A(1), the said application is deemed to have been

allowed   and   the    assessment            orders   stood    amended   by

operation of law upon expiry of 60 days from 22.01.2010, i.e.,

the date of receipt of the application.


9.4   Though it may be open to the Assessing Authority to pass

more than one rectification order, the same must be in

conformity with the statutory provisions. Once the rectification

application dated 18.01.2010 stood allowed by virtue of the

legal fiction, and the deemed rectification had come into force,

the question that arises is whether the Assessing Authority
                                - 18 -
                                                  STRP No. 3 of 2020



could pass another rectification order in derogation thereof. The

answer must be in the negative.


9.5   It is not the case that the authorities were without

remedy. However, so long as the deemed rectification remained

in force, the rectification order dated 08.04.2010 is without

jurisdiction. In this regard, this Court in Wipro Limited,

Infotech Group, Belagola Industrial Area, Metagalli,

Mysore (supra) has held as under:

      "8. Admittedly, in the instant case, it is not in dispute
      that the Assessing Authority passed an order taking into
      account the original return instead of revised return on
      31-5-2006, 28-8-2006 and 31-8-2006. The petitioner
      had filed the revised returns in Form 4 on 12-4-2006,
      19-8-2006 and 30-5-2006. Therefore, in view of second
      proviso to Section 25-A of the Act, on expiry of sixty
      days, the revised return should have been deemed to
      have been accepted. However, after a period of sixty
      days, the Adjudicating Authority passed an order on 31-
      10-2007, 21-1-2008 and 5-1-2008, which were per se
      without jurisdiction. The aforesaid aspect of the matter
      was neither considered by First Appellate Authority nor
      by the Tribunal. The Tribunal has decided the question of
      law erroneously, which arose for its consideration."

9.6   Applying   the   principles   laid   down    in   the   aforesaid

decision, and in view of the second proviso to Section 25-A of

the KST Act, upon expiry of 60 days, the rectification

application is deemed to have been allowed and the mistake

stands rectified by operation of law. Any rectification order
                               - 19 -
                                           STRP No. 3 of 2020



passed after the expiry of the said period is, therefore, per se

without jurisdiction.


9.7   In the light of the aforesaid enunciation of law, we hold

that the   rectification order dated 08.04.2010      is without

jurisdiction. Consequently, all subsequent proceedings, namely,

the revisional order dated 14.01.2011, the fresh assessment

order dated 16.08.2011, the refund notice dated 20.08.2011,

and the appellate order dated 17.12.2011, cannot be sustained

in the eye of law.


9.8   When the aforesaid orders are otherwise unsustainable in

law, the mere fact that they have not been challenged would

not operate as an impediment to the petitioner's claim for

interest, the right to which has already accrued by operation of

the second proviso to Section 25A(1) and Section 13-A of the

KST Act. Orders passed without jurisdiction cannot defeat an

accrued statutory right, unless such right is taken away or set

aside in a manner known to law.


9.9   The deemed rectification arising out of the application

dated 18.01.2010 continues to hold the field. The right that has

accrued pursuant to such deemed rectification cannot be

divested by subsequent proceedings which are themselves
                                - 20 -
                                             STRP No. 3 of 2020



without jurisdiction. Moreover, none of the aforesaid orders

dispute the petitioner's entitlement to refund in the light of the

law declared by the Division Bench. The Tribunal, in its orders

dated 25.01.2018 and 24.06.2019, has proceeded on an

erroneous premise that the judgment of the Division Bench

came to the notice of the Assessing Authority only on

23.03.2010, and that there was no delay if the period was

reckoned from the said date for the purpose of determining the

petitioner's entitlement to interest.


9.10 We find that the aforesaid observation and finding are

contrary to the law and material on record. The rectification

application dated 18.01.2010, enclosing a copy of the judgment

of the Division Bench, bears the acknowledgment seal of the

office of the Deputy Commissioner of Commercial Taxes dated

22.01.2010. Thus, it is evident that the Assessing Authority had

knowledge of the judgment of the Division Bench as on

22.01.2010.


9.11 Be that as it may, by operation of law, the rectification

application dated 18.01.2010 stood allowed upon expiry of the

prescribed period, and the assessment orders stood deemed to

have been rectified. Once such deemed rectification has come
                                   - 21 -
                                                  STRP No. 3 of 2020



into force, any subsequent proceedings cannot divest the

petitioner of the accrued right.


9.12 In the light of the above, we are of the considered view

that the petitioner is entitled to interest under Section 13-A of

the KST Act at the rate of 6% per annum for the period of

delay of one year, six months and eighteen days. The said

period     is   computed    on   the   basis   that   the   rectification

application is to be reckoned from the date of its receipt, i.e.,

22.01.2010. The period of 60 days, as contemplated under the

second proviso to Section 25-A(1) of the KST Act, expired on

22.03.2010, and the further period of 90 days for grant of

refund under Section 13-A KST Act expired on 22.06.2010.


10.   In the light of the findings recorded herein above, we

pass the following:

                                 ORDER

(i) Sales Tax Revision Petition No.3/2020 is allowed.

(ii) The order in STA Rectification Nos.05 to 07/2018 dated 24.06.2019 passed by Karnataka Appellate Tribunal at Bangalore is hereby set aside.

(iii) The questions admitted are answered in favour of the petitioner-Assessee and against the Revenue.

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STRP No. 3 of 2020

(iv) The petitioner is entitled to interest under Section 13-A of the Karnataka Sales Tax Act, 1957, at the rate of 6% per annum for the period of 1 year, 6 months and 18 days.

(v) No orders as to costs.

Sd/-

(S.G.PANDIT) JUDGE Sd/-

(K. V. ARAVIND) JUDGE VBS