- 1 - HC-KAR NC: 2025:KHC:40883-DB WA No. 721 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF OCTOBER, 2025 PRESENT THE HON'BLE MR. JUSTICE B M SHYAM PRASAD AND THE HON'BLE MR. JUSTICE T.M.NADAF WRIT APPEAL NO. 721 OF 2023 (T-RES) BETWEEN: 1. JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS) SHANTHINAGAR, BENGALURU-560 027. 2. DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT-1.3), DGST-1, 3RD FLOOR, TTMC BUILDING, BMTC BUS STOP, YESHWANTHAPURA, BENGALURU-560 022. …APPELLANTS (BY SRI. ADITYA VIKRAM BHAT, AGA) Digitally signed by VANAMALA N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:40883-DB WA No. 721 of 2023 AND: M/S. KANTI SWEETS NO.14, CHANNABASAPPA STREET, P.G. HALLI, BENGALURU-560 003, BY ITS MANAGING PARTNER, SHAILENDRA SHARMA. …RESPONDENT (BY SRI. VIKRAM HUILGOL, SENIOR COUNSEL FOR SRI. ASHOK G V., ADVOCATE A/W MS. MONIKA H.B, ADVOCATE) THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO ALLOW THE WRIT APPEAL, SET ASIDE THE ORDER DATED 02.09.2022 PASSED BY THE LEARNED SINGLE JUDGE OF THIS HONBLE COURT IN WRIT PETITION No. 8281/2019 (T-RES). THIS APPEAL, COMING ON FOR PRELIMINARY HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: - 3 - HC-KAR NC: 2025:KHC:40883-DB WA No. 721 of 2023 CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD and HON'BLE MR. JUSTICE T.M.NADAF ORAL JUDGMENT (PER: HON'BLE MR. JUSTICE B M SHYAM PRASAD) This Intra-Court appeal is as against the order dated 02.09.2022 in W.P.No.8281/2019. The respondent has filed this writ petition calling in question the following Orders. [i] The second petitioner’s [the Prescribed Authority’s] Reassessment Order dated 10.08.2018 under Section 39 and associated Sections of the Karnataka Value Added Tax Act, 2003 [for short, 'the KVAT Act'], [ii] The first petitioner’s orders dated 17.12.2018 under Section 62[6] of the KVAT Act, and - 4 - HC-KAR NC: 2025:KHC:40883-DB WA No. 721 of 2023 [iii] The first petitioner’s rectification order dated 21.12.2018 under Section 69 of the KVAT Act. These orders relate to the reassessment period between April 2006 and October 2009, and these impugned orders are under Section 62 and Section 69 of the KVAT Act'. 2. The details of the relevant tax period and orders in the Statutory Appeal and the Rectification Applications are: Sl. Nos. Assessment Year The Common Order under Section 62 of the KVAT1 Act. The Order of the Joint Commissioner of Commercial Court Order under Section 69 of the KVAT Act VAT. AP. No.108/18-19 260872141.01 1. April 2006 to March 2007 Dated: 17.12.2018 Dated: 21.12.2018 1 The Order-in-Original dated 10.08.2018 by the Deputy Commissioner of Commercial Taxes [Audit–1.3] DGST-I under Section 39 & 41 of the KVAT Act - 5 - HC-KAR NC: 2025:KHC:40883-DB WA No. 721 of 2023 VAT.AP. No.109/18-19 252871708.01 2. April 2007 to March 2008 Dated: 17.12.2018 Dated: 21.12.2018 VAT.AP. No.110/18-19 271872603.01 3. April 2008 to November 2008 and December 2008 to March 2009 Dated: 17.12.2018 Dated: 21.12.2018 VAT.AP. No.111/18-19 284872858.01 4. April 2009 to October 2009 Dated: 17.12.2018 Dated: 21.12.2018 3. The writ Court has quashed the aforesaid reassessment order dated 10.08.2018 and the subsequent orders dated 17.12.2018 and 21.12.2018 for the tax period between April 2006 and May 2009. The writ Court, insofar as the tax period between June 2009 and October 2009, has set aside the orders dated 17.12.2018 and 21.12.2018 and restored the proceedings to the Appellate Authority for reconsideration under Section 62 of the KVA Act. - 6 - HC-KAR NC: 2025:KHC:40883-DB WA No. 721 of 2023 The writ Court has interfered with these orders essentially on the ground of limitation. 4. The writ Court has opined that in view of the timelines that are elaborated in a separate tabular column in the memorandum of writ petition, the reassessment proceedings could not have been initiated for the period from April 2006 to May 2009 in view of the provisions of Section 40 of the KVAT Act concluding that the question of limitation affects the very jurisdiction to initiate reassessment proceedings. However, the writ Court, insofar as the tax period between June 2009 and October 2009, has opined that the Prescribed Authority has not provided due opportunity to cross-examine the witnesses despite a specific request and that the respondent will be entitled to another opportunity. 5. Sri Aditya Vikram Bhat, the learned Additional Government Advocate, and Sri Vikram - 7 - HC-KAR NC: 2025:KHC:40883-DB WA No. 721 of 2023 Huilgol, the learned Senior Counsel for the respondent, have been heard to answer the following two questions. [a] Whether this Court must opine that the Department of Commercial Taxes is entitled for the enlarged time as contemplated under Section 40(2) of the KVAT Act, and [b] Whether this Court must intervene with the writ Court’s directions to consider the assessment afresh only for the period between June 2009 and October 2009. 6. Sri Aditya Vikram Bhat argues for an answer on the first question in favour of the Department relying upon a notice issued under Section 79 read with Section 82 of the KVAT Act on 28.05.2011 and submits that the terms of this notice show that the respondent is responsible for parallel sales, that an entire business segment is kept out of - 8 - HC-KAR NC: 2025:KHC:40883-DB WA No. 721 of 2023 the books of accounts and that the details of which are found out during search proceedings. 7. However, Sri Aditya Vikram Bhat cannot dispute that this notice has not resulted in any further proceedings to establish an assertion of fraud, and if the Notice has not resulted in further proceedings, the Department cannot avail the benefit of extended the timeline [of 10 years] saving the intended proceedings. Therefore, the first question is answered against the Department. Insofar as the second question is concerned, this Court must observe that after the writ Court's order, the reassessment proceedings were completed on 25.09.2025 in favour of the respondent. This essentially forecloses the second question. - 9 - HC-KAR NC: 2025:KHC:40883-DB WA No. 721 of 2023 The writ appeal stands disposed of in the light of the above. Sd/- (B M SHYAM PRASAD) JUDGE Sd/- (T.M.NADAF) JUDGE nv - 10 - HC-KAR NC: 2025:KHC:40883-DB WA No. 721 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU [JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS) AND ANOTHER VS. M/S. KANTI SWEETS] 18.03.2026 (VIDEO CONFERENCING / PHYSICAL HEARING) CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD and HON'BLE MR. JUSTICE T.M.NADAF ORAL ORDER (PER: HON'BLE MR. JUSTICE B M SHYAM PRASAD) This Court has disposed of this appeal on 15.10.2025 inter alia answering whether there must be reconsideration for the period between June 2009 and October 2009 as directed by the Writ Court. However, the appeal is listed today for clarification, and the learned counsel for the respondent places on record a copy of the order dated 25.09.2025 stating that even as of the date of hearing on 15.10.2025, the reassessment as directed by the writ Court had concluded in favour of the respondent. - 11 - HC-KAR NC: 2025:KHC:40883-DB WA No. 721 of 2023 A copy of the order is taken on record and the office is directed to release the earlier order subject to changes in the light of the afore. Sd/- (B M SHYAM PRASAD) JUDGE Sd/- (T.M.NADAF) JUDGE NV