Karnataka High Court
M/S. Engineers India Limited vs Deputy Commissioner Of on 22 December, 2022
Author: P.S. Dinesh Kumar
Bench: P.S. Dinesh Kumar
W.A No.3127/2018
C/W W.As No.3102/2018,
3114/2018, 3126/2018,
3158/2018, 3159/2018,
1521/2019
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 22ND DAY OF DECEMBER, 2022
PRESENT
THE HON'BLE MR. JUSTICE P.S. DINESH KUMAR
AND
THE HON'BLE MR. JUSTICE UMESH M. ADIGA
WRIT APPEAL No.3127 OF 2018
C/W
WRIT APPEALS No.3102/2018, 3114/2018,
3126/2018, 3158/2018, 3159/2018,
1521/2019 (T-RES)
IN W.A. NO.3127 OF 2018
BETWEEN :
M/S. ENGINEERS INDIA LIMITED
A GOVERNMENT OF INDIA
UNDERTAKING, MRPL PHASE-III
REFINERY PROJECT
KUTHETHOOR P.O.
VIA KATILPALLA
MANGALURU-575 030
REPRESENTED HEREIN BY ITS
CHIEF GENERAL MANAGER
(HR & LEGAL)
MR.A. BHOWMIK ... APPELLANT
(BY SHRI. G. SHIVDASS, SENIOR ADVOCATE FOR
SHRI. PRASHANTH G. SHIVDASS AND
SHRI. J. RISHAB, ADVOCATES)
W.A No.3127/2018
C/W W.As No.3102/2018,
3114/2018, 3126/2018,
3158/2018, 3159/2018,
1521/2019
2
AND :
THE ASSISTANT COMMISSIONER
OF COMMERCIAL TAXES (ENF.)2
OFFICE OF JOINT COMMISSIONER
OF COMMERCIAL TAXES (ENF.)
WEST ZONE
MANGALURU-575 001 ... RESPONDENT
(BY SHRI. JEEVAN J. NEERALGI, AGA)
....
THIS WRIT APPEAL IS FILED U/S 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO ALLOW THIS
WRIT APPEAL AND SET ASIDE THE IMPUGNED ORDER DATED
01.10.2018 PASSED BY THE LEARNED SINGLE JUDGE IN WP
NO.13274/2018 AND CONSEQUENTLY ALLOW THE WRIT
PETITION BEARING WP NO.13274/2018.
IN W.A. NO.3102 OF 2018
BETWEEN :
M/S. ENGINEERS INDIA LIMITED
A GOVERNMENT OF INDIA
UNDERTAKING, MRPL PHASE-III
REFINERY PROJECT
KUTHETHOOR P.O.
VIA KATILPALLA
MANGALURU-575 030
HEAD-LEGAL & AUTHORIZED SIGNATORY
MR. S.C. RAI
PRESENTLY REPRESENTED HEREIN BY ITS
CHIEF GENERAL MANAGER (HR & LEGAL)
MR. A. BHOWMIK ... APPELLANT
(BY SHRI. G. SHIVDASS, SENIOR ADVOCATE FOR
SHRI. PRASHANTH G. SHIVDASS AND
SHRI. J. RISHAB, ADVOCATES)
W.A No.3127/2018
C/W W.As No.3102/2018,
3114/2018, 3126/2018,
3158/2018, 3159/2018,
1521/2019
3
AND :
DEPUTY COMMISSIONER OF
COMMERCIAL TAXES (INTERNAL AUDIT
AND INSPECTION)
OFFICE OF DEPUTY COMMISSIONER OF
COMMERCIAL TAXES
VANIJYA THERIGE BHAVANA
MAIDAN ROAD
MANGALURU-575 001 ... RESPONDENT
(BY SHRI. JEEVAN J. NEERALGI, AGA)
....
THIS WRIT APPEAL IS FILED U/S 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO ALLOW THIS
WRIT APPEAL AND SET ASIDE THE ORDER DATED
01.10.2018 PASSED BY THE LEARNED SINGLE JUDGE IN WP
NO.16416-427/2017 AND CONSEQUENTLY ALLOW THE WRIT
PETITION BEARING WP NO.16416-427/2017.
IN W.A. NO.3114 OF 2018
BETWEEN :
M/S. ENGINEERS INDIA LIMITED
A GOVERNMENT OF INDIA
UNDERTAKING, MRPL PHASE-III
REFINERY PROJECT
KUTHETHOOR P.O.
VIA KATILPALLA
MANGALURU-575 030
HEAD-LEGAL & AUTHORIZED SIGNATORY
MR. S.C. RAI
PRESENTLY REPRESENTED HEREIN BY ITS
CHIEF GENERAL MANAGER (HR & LEGAL)
MR.A. BHOWMIK ... APPELLANT
(BY SHRI. G. SHIVDASS, SENIOR ADVOCATE FOR
SHRI. PRASHANTH G. SHIVDASS AND
SHRI. J. RISHAB, ADVOCATES)
W.A No.3127/2018
C/W W.As No.3102/2018,
3114/2018, 3126/2018,
3158/2018, 3159/2018,
1521/2019
4
AND :
DEPUTY COMMISSIONER OF
COMMERCIAL TAXES (INTERNAL AUDIT
AND INSPECTION)
OFFICE OF DEPUTY COMMISSIONER OF
COMMERCIAL TAXES
VANIJYA THERIGE BHAVANA
MAIDAN ROAD
MANGALURU-575 001 ... RESPONDENT
(BY SHRI. JEEVAN J. NEERALGI, AGA)
....
THIS WRIT APPEAL IS FILED U/S 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO ALLOW THIS
WRIT APPEAL AND SET ASIDE THE ORDER DATED
01.10.2018 PASSED BY THE LEARNED SINGLE JUDGE IN WP
NOS.16429-440/2017 AND CONSEQUENTLY ALLOW THE
WRIT PETITION BEARING WP NOS.16429-440/2017.
IN W.A. NO.3126 OF 2018
BETWEEN :
M/s. ENGINEERS INDIA LIMITED
A GOVERNMENT OF INDIA
UNDERTAKING, MRPL PHASE-III
REFINERY PROJECT
KUTHETHOOR P.O.
VIA KATILPALLA
MANGALURU-575 030
REPRESENTED HEREIN BY ITS
CHIEF GENERAL MANAGER (HR & LEGAL)
MR. A. BHOWMIK ... APPELLANT
(BY SHRI. G. SHIVDASS, SENIOR ADVOCATE FOR
SHRI. PRASHANTH G. SHIVDASS AND
SHRI. J. RISHAB, ADVOCATES)
W.A No.3127/2018
C/W W.As No.3102/2018,
3114/2018, 3126/2018,
3158/2018, 3159/2018,
1521/2019
5
AND :
THE STATE OF KARNATAKA
MINISTRY OF FINANCE
REPRESENTED BY THE ADDITIONAL
CHIEF SECRETARY
VIDHANA SOUDHA
BENGALURU-560 001 ... RESPONDENT
(BY SHRI. JEEVAN J. NEERALGI, AGA)
....
THIS WRIT APPEAL IS FILED U/S 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO ALLOW THIS
WRIT APPEAL AND SET ASIDE THE ORDER DATED 1.10.2018
PASSED BY THE LEARNED SINGLE JUDGE IN WP
NO.9629/2018 AND CONSEQUENTLY ALLOW THE WRIT
PETITION BEARING WP NO.9629/2018.
IN W.A. NO.3158 OF 2018
BETWEEN :
M/S. ENGINEERS INDIA LIMITED
A GOVERNMENT OF INDIA
MRPL PHASE III, REFINERY PROJECT
KUTHETHOOR P.O. VIA KATILPALLA
MANGALURU-575 030
REPRESENTED BY ITS
DEPUTY GENERAL MANAGER F & A
MR. INDER CHAWLA
S/O LATE MR. S.S. CHAWLA
AGED 48 YEARS
PRESENTLY REP. BY ITS
CHIEF GENERAL MANAGER (HR & LEGAL)
MR. ATANU BHOWMIK
S/O MR. SRIPATI CHARAN BHOWMIK
AGED ABOUT 52 YEARS ... APPELLANT
(BY SHRI. G. SHIVDASS, SENIOR ADVOCATE FOR
SHRI. PRASHANTH G. SHIVDASS AND
SHRI. J. RISHAB, ADVOCATES)
W.A No.3127/2018
C/W W.As No.3102/2018,
3114/2018, 3126/2018,
3158/2018, 3159/2018,
1521/2019
6
AND :
1. THE DEPUTY COMMISSIONER OF
COMMERCIAL TAXES (AUDIT)-3
DVO OFFICE OF
DEPUTY COMMISSIONER OF
COMMERCIAL TAXES
VANIJYA THERIGE
BHAVANA MAIDAN ROAD
MANGALURU-575 001
2. MANGALORE REFINERIES AND
PETROCHEMICAL LIMITED
A GOVERNMENT OF INDIA
UNDERTAKING, KUTHETHOOR
P.O, VIA KATIPALLA
MANGALORE-575 030 ... RESPONDENTS
(BY SHRI. JEEVAN J. NEERALGI, AGA)
....
THIS WRIT APPEAL IS FILED U/S 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE
ORDER OF THE LEARNED SINGLE JUDGE DATED 01.10.2018
IN WP NO.46960/2016 AND WP NO.48536-546/2016 [T-RES]
AND ALLOW THE SAME AS PRAYED FOR.
IN W.A. NO.3159 OF 2018
BETWEEN :
M/S. ENGINEERS INDIA LIMITED
A GOVERNMENT OF INDIA UNDERTAKING
MRPL PHASE III, REFINERY PROJECT
KUTHETHOOR P.O., VIA KATILPALLA
MANGALURU-575 001
NOW REPRESENTED BY ITS
CHIEF GENERAL MANAGER (HR AND LEGAL)
MR. ATANU BHOWMIK
S/O MR. SRIPATI CHARAN BHOWMIK
AGED ABOUT 52 YEARS ... APPELLANT
(BY SHRI. G. SHIVDASS, SENIOR ADVOCATE FOR
SHRI. PRASHANTH G. SHIVDASS, ADVOCATE)
W.A No.3127/2018
C/W W.As No.3102/2018,
3114/2018, 3126/2018,
3158/2018, 3159/2018,
1521/2019
7
AND :
1. THE DEPUTY COMMISSIONER OF
COMMERCIAL TAXES (AUDIT)-2
DVO, OFFICE OF DEPUTY COMMISSIONER
OF COMMERCIAL TAXES
VANIJYA THERIGE BHAVANA
MAIDAN ROAD
MANGALURU-575 001
2. THE COMMISSIONER OF
COMMERCIAL TAXES
STATE OF KARNATAKA
VANIJYA TERIGE KARYALAYA
GANDHINAGAR
BANGALORE-560 009
3. THE STATE OF KARNATAKA
DEPARTMENT OF FINANCE
VIDHANA SOUDHA
AMBEDKAR VEEDHI
BANGALORE-560 001
REPRESENTED BY ITS
PRINCIPAL SECRETARY ... RESPONDENTS
(BY SHRI. JEEVAN J. NEERALGI, AGA)
....
THIS WRIT APPEAL IS FILED U/S 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE
ORDER OF THE LEARNED SINGLE JUDGE DATED 01.10.2018
IN WP NO.13914/2018 [T-RES] AND ALLOW THE SAME AS
PRAYED FOR.
IN W.A. NO.1521 OF 2019
BETWEEN :
M/s. ENGINEERS INDIA LIMITED
A GOVERNMENT OF INDIA UNDERTAKING
MRPL PHASE III, REFINERY PROJECT
KUTHETHOOR P.O., VIA KATILPALLA
MANGALURU-575 030
W.A No.3127/2018
C/W W.As No.3102/2018,
3114/2018, 3126/2018,
3158/2018, 3159/2018,
1521/2019
8
NOW REPRESENTED BY ITS
CGM (HR AND LEGAL)
MR. ATANU BHOWMIK
S/O MR. LATE MR. SRIPATI CHARAN BHOWMIK
AGED ABOUT 54 YEARS ... APPELLANT
(BY SHRI. G. SHIVDASS, SENIOR ADVOCATE FOR
SHRI. PRASHANTH G. SHIVDASS AND
SHRI. J. RISHAB, ADVOCATES)
AND :
THE DEPUTY COMMISSIONER OF
COMMERCIAL TAXES (AUDIT)-2
OFFICE OF DEPUTY COMMISSIONER
OF COMMERCIAL TAXES
VANIJYA THERIGE BHAVANA
MAIDAN ROAD
MANGALURU-575 001 ... RESPONDENT
(BY SHRI. JEEVAN J. NEERALGI, AGA)
....
THIS WRIT APPEAL IS FILED U/S 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO PERUSE THE
SAME AND SET ASIDE THAT PART OF THE CONDITION
DIRECTING THE APPELLANT TO DEPOSIT 30% OF THE
DEMAND AMOUNT WITHIN A PERIOD OF FOUR WEEKS,
PASSED BY THE LEARNED SINGLE JUDGE DATED 25.04.2019
IN WP NO.18883/2019 (T-RES) AND ALLOW THE ABOVE
APPEAL.
THESE WAs, HAVING BEEN HEARD AND RESERVED
FOR JUDGMENT ON 28.09.2022 COMING ON FOR
PRONOUNCEMENT OF JUDGMENT, THIS DAY, P.S.DINESH
KUMAR J., PRONOUNCED THE FOLLOWING:-
W.A No.3127/2018
C/W W.As No.3102/2018,
3114/2018, 3126/2018,
3158/2018, 3159/2018,
1521/2019
9
JUDGMENT
These intra-court appeals by the unsuccessful writ petitioner are directed against the order dated October 1, 2018 passed by the Hon'ble Single Judge in W.Ps. No. 46960/2016 and 48536-546/2016 and connected matters.
2. For the sake of convenience, parties shall be referred as per their status in writ petition.
3. Brief facts of the case are, petitioner/assessee is a Government of India undertaking engaged in the business of construction and project engineering, consulting services. It is registered under KVAT Act1 and CST Act2. During the A.Y.3 2009-10, the assessee executed contract for M/s MRPL4 which is Phase III turnkey project 1 Karnataka Value Added Tax Act 2 Central Sales Tax Act 3 Assessment Year.
4Mangalore Refinery Petro-Chemicals Limited, Mangalore. W.A No.3127/2018
C/W W.As No.3102/2018, 3114/2018, 3126/2018, 3158/2018, 3159/2018, 1521/2019 10 involving design, engineering, procurement, supply, construction, installation, testing, commissioning and project management services for setting up PFCCU5, SRU6, SPM7 and PPU8. Assessee filed returns under the KVAT Act disclosing sales of Rs.72.01 Crores and filed revised returns showing sale of Rs.95.76 Crores; and claimed exemption from payment of tax.
4. The AO9 disallowed10 petitioner's claim of transit sales while re-computing the turnover from Rs. 435.93 Crores to Rs. 117.39 Crores. Assessee challenged the same before this Court in W.P. No. 11151/2016. Allowing the writ petition, this Court directed the respondent to reconsider the matter afresh after giving opportunity of hearing to the 5 Petrochemical Fluidized Catalytic Cracking unit 6 Sulphur Recovery Unit 7 Single Point Mooring 8 Poly Propylene Unit 9 Assessing Officer 10 Vide order dated 02.02.2016 W.A No.3127/2018 C/W W.As No.3102/2018, 3114/2018, 3126/2018, 3158/2018, 3159/2018, 1521/2019 11 assessee. Pursuant thereto, assessee filed its reply dated March 10, 2016, wherein the modus of transaction were reiterated.
5. The AO proceeded to pass the order impugned in the writ petition holding that the assessee had made frantic efforts to twist and bend the language of statute. In substance, Revenue held that the goods purchased under different Invoices on different dates from different parties were transmitted to MRPL under a single invoice showing the description of goods as supply of items for the project. Feeling aggrieved, assessee challenged AO's order in the instant writ petitions. By the impugned common order, the Hon'ble Single Judge has dismissed the writ petitions reserving liberty to the assessee to avail remedy of appeal under Section 62 of the KVAT Act. W.A No.3127/2018
C/W W.As No.3102/2018, 3114/2018, 3126/2018, 3158/2018, 3159/2018, 1521/2019 12
6. Shri. Shivdass, learned Senior Advocate for the assessee submitted that the assessee is essentially engaged in design, engineering, supply construction, installation, testing, commissioning and project management services. It had entered into an agreement with MRPL for construction of certain engineering project. For the purpose of construction, materials are procured from various places from outside the State and such sales are inter-State sales. The Assessing Authority without proper application of mind has held that the assessee had procured the goods in the course of inter-State trade as a Contractor to fulfil its obligations. He strenuously contended that the material was delivered to the MRPL and therefore, the sale is an inter-State sale. In support of this W.A No.3127/2018 C/W W.As No.3102/2018, 3114/2018, 3126/2018, 3158/2018, 3159/2018, 1521/2019 13 contention, he placed reliance on Engineers India Ltd., Vs. State of Andhra Pradesh and others11.
7. In substance, Shri. Shivdass's argument is, the goods were received in the transit sale by M/s. MRPL.
8. Shri. Jeevan Neeralgi, learned AGA for the State, arguing in support of the impugned order submitted that the matter involves appreciation of various facts and therefore, appeal is the right remedy. With regard to the authority cited by Shri. Shivdass, Shri. Neeralgi submitted that the Andhra Pradesh High Court had exercised its jurisdiction to entertain the petition and examined the facts of that case. He urged that this Court may relegate the assessee to exhaust the appeal remedy without venturing into examining the facts of the case.
11
2018 SCC Online Hyd 786 W.A No.3127/2018 C/W W.As No.3102/2018, 3114/2018, 3126/2018, 3158/2018, 3159/2018, 1521/2019 14
9. We have carefully considered rival contentions and perused the records.
10. The issue involved in this case is, whether the material used in the project was received by the MRPL at its site in Mangaluru or by the assessee whilst the goods were in transit. Before the AO, assessee had sought to cross-examine the Transport Companies who had transported the goods from various places to Mangaluru. The Assessing Authority has recorded a finding that the different Transport Companies had expressed differently to support the claim of the assessee.
11. The Assessment orders show that the assessee has taken a specific contention that the goods were received by MRPL. The AO has placed reliance on Clause 1.0.30.0 and 1.0.50.0 of the W.A No.3127/2018 C/W W.As No.3102/2018, 3114/2018, 3126/2018, 3158/2018, 3159/2018, 1521/2019 15 Agreement defining the lump sum price and scope of Contract and come to a conclusion that the assessee had purchased the goods in the course of inter-State sale for which C-Form declarations were issued and the transaction ended with money consideration.
12. The Hon'ble Single Judge has taken note of one of the Assessment Orders extracted in para 6 of the impugned order and held that entertaining the writ petitions prematurely would cause serious prejudice not only to the assessee but also to the Revenue, who will loose their chance to argue before the two appellate forums provided in the Act and accordingly relegated the assessee to the Appellate Authority.
13. In our considered view, the matter requires appreciation of evidence with regard to facts of the case and that can be done before the W.A No.3127/2018 C/W W.As No.3102/2018, 3114/2018, 3126/2018, 3158/2018, 3159/2018, 1521/2019 16 Appellate Authority. We may also record that in some writ petitions the assessee has challenged the show cause notices. It is appropriate for the assessee to submit reply to the notices and invite Assessment orders.
14. It is settled that ordinarily writ petition shall not be entertained, where there exist an alternative and efficacious remedy. (See: Commissioner of Income Tax and others Vs. Chhabil Dass Agarwal12)
15. So far as the authority cited by Shri. Shivdass is concerned, the Andhra Pradesh High Court has exercised its discretion to entertain the petition. We are of the view that in the light of facts involved in this case, this is not a fit case to exercise the extraordinary and discretionary jurisdiction of this Court under Article 226 of the 12 2014(1) SCC 603 (para 15) W.A No.3127/2018 C/W W.As No.3102/2018, 3114/2018, 3126/2018, 3158/2018, 3159/2018, 1521/2019 17 Constitution of India. Hence, we are at one with the Hon'ble Single Judge on this point.
16. Resultantly, these appeals must fail and they are accordingly dismissed.
No costs.
Sd/-
JUDGE Sd/-
JUDGE SPS