Judgment:
1. Petitioner has sought for to issue writ of mandamus or any other writ to quash Annexure 'F dated 15.01.2010 and the subsequent endorsement thereon at Annexure 'H dated 26.02.2010 rejecting the application of the petitioner.
2. According to the petitioner-company, it is engaged in development of simulators required by the Defence Ministry and every contract entered into runs for more than 4-5 years: it is also registered under the provisions of Karnataka Value Added Tax Act and Central Sales Tax Act; all the activities of the company are carried on outside the State of Karnataka and hence, no tax is payable either under the KVAT Act or under the CST Act. It is the grievance of the petitioner that, many officers of the Enforcement Department inspected the premises of the petitioner-company at various points and were of the opinion that transaction of the petitioner-company is taxable under the KVAT and CST Act. But, all along the contention of the petitioner is. it is not taxable; Ultimately, the matter was taken up for re-assessment proceedings - audit for the year 2005-2006 by the Assistant Commissioner of Commercial Taxes (ACCT) Audit 3, who levied the tax based on the report of the Intelligence Officers, against which, first appeal was preferred before the Joint Commissioner and the said appeal was allowed, Thereafter, the respondent directed the Additional Commissioner to initiate suomoto revision proceedings against the appellate order. However, the Additional Commissioner refused to initiate the proceedings. The department has filed a second appeal before the tribunal, which is pending consideration. , ,
3. The grievance of the petitioner is that, the 2nd respondent once again made inspection of the premises and opined that the transactions are taxable and accordingly, issued a notice under Form VAT 275 of he VAT Rules and directed the petitioner to produce all the books of accounts for the assessment years 2006-2007 and 2008-2009. As against the said notice, petitioner made a representation to the Additional Commissioner of Commercial Taxes, Enforcement South Zone, Bangalore, seeking for a direction to the 2nd respondent for withdrawal of the notice issued as per Section 52(1) of the KVAT Act stating that the transactions for the years 2006-2007 and 2008-2009 are identical to the year 2005-2006 and, since it is already held that the transactions are not taxable, petitioner cannot be harassed repeatedly by asking to produce the books of accounts and the bank accounts. As there was no response from the Additional Commissioner of Taxes and. since the 2nd respondent has issued an endorsement dated 18.2.2009 stating that the Enforcement Officer is entitled to demand books of accounts under Section 52(1) of the Act for the years 2006- 2007 and 2008-2009 and petitioner is said to have replied to the endorsement by letter dated 29.12.2009 that all the books of accounts and other documents were made available to the Enforcement Officer and also made a representation to the 1st respondent, who has rejected his prayer, hence, these petitions.
4. Heard.
5. According to the petitioner's counsel, when once an opinion has been formed by the appellate authorities i.e., the Joint Commissioner as well as by the Additional Commissioner and only on pursuance of the matter by the Department, the matter is pending consideration before the appellate Tribunal for the assessment year 2005-2006, once again, an attempt has been made by the Intelligence Officer of the Department to re- assess the tax for the year 2008-2009 onwards, which is not proper and accordingly, sought for issuance of appropriate direction.
6. Learned Government Pleader has submitted that, the matter in respect of the items in question i.e., simulators are under consideration before the appellate Tribunal. For the subsequent years, if re-assessment is made and it is found that the items in question are taxable, unless action taken within the stipulated period, the Department will be at the losing end. Accordingly, he has justified the action initiated by the Department for the year 2008-2009. In support of his argument, he has relied Upon the decision reported in (2009)26 VST 216 'Karri) in the case of J.M.C Projects (India) Ltd., v. Deputy Commissioner oi* Commercial Taxes, Bangalore and others to contend that, more than one prescribed authority can be conferred with jurisdiction.
7. At the outset, according to the petitioner, the activities carried on by him are not covered cither under KVAT Act or under CST Act and are not taxable. In this regard, already decision has been taken at the appellate level and also by the Additional Commissioner. Only at the instance of the Department, the matter is pending consideration before the Tribunal. Such being the case, the question of once again re-opening the reassessment made does not arise. However, in the event, it' it is subject to re-assessment, it is not necessary that the Intelligence Officer has to re-open the case and it may be done by the Re-assessment Officer himself or by any other officer as per Section 39(1) of the KVAT Act, to be appointed by the Commissioner. The grievance of the petitioner is, despite favourable orders in his lavour for the year 2005-2006, the very Officer who has already formed an opinion against the petitioner to reopen the issue, already predetermined to tax the petitioner-company, hts been chosen to re-assess i.e.. the Intelligence Office seeking for an authority by the Commissioner to authorize him. as such, it is prejudicial to him.
8. The Officer who has been appointed as Intelligence Officer, is of a equivalent rank as that of the Assessment Officer, and does the work of the Assessment Officer by way of cross check and forms an opinion by reassessing, either to tax the petitioner-company or otherwise, and, it would be subject to review at the hands of the appellate authority or by the Commissioner or may be before the Tribunal. Seeking an authorization by the Commissioner to conduct re-assessment cannot be found fault with. However, if the re-assessment order made is prejudicial to the petitioner, ir is open for the petitioner to challenge the said order before the appropriate forum. Since already the appeal filed by the Department regarding assessment made for the year 2005-2006 is pending consideration before the appellate Tribunal, if the order passed by the Tribunal is favourable to the petitioner, it can very well avail the benefit and the Department shall not proceed against the petitioner for further re-assessment, but, if it is held otherwise, then there is scope for the petitioner to challenge the said orders along with the assessment made for the year 2008-7009 as well and to have a recourse at the appropriate level. Accordingly, petitions are disposed of.