HC : Invokes 'savings' clause under GST enactment; Allows ITC recovery under repealed VAT Act

HC upholds recovery of refunded Input Tax Credit u/s 10(5) r/w Section 69(1) of Karnataka VAT Act despite repeal of said enactment w.e.f. July 2017 vide Karnataka GST Act, 2017; Perusing repeals and savings provisions u/s 173 r/w Section 174 of KGST Act, HC holds that repeal of KVAT would not affect proceedings initiated by Revenue authorities; Notes that refund had been granted pursuant to Division Bench decision in M K Agro Tech Pvt Ltd which had held that principles of partial rebate u/s 17 of KVAT Act were inapplicable to inputs utilized in exempt by-products, but SC had subsequently reversed said HC order; Finds that HC’s refund order was subject to outcome in SLP before SC in case of M K Agro Tech Pvt Ltd and indemnity bonds furnished by assessee and while ordinarily no rectification can be allowed on the basis of subsequent HC / SC order,  it was obligatory on assessee’s part to obey Court orders and could not now assail Revenue’s recovery proceedings; However, reads down Circular dated October 9 2017 issued by Commissioner of Commercial Taxes to maintain uniformity in collection of taxes, by holding that levy of interest  / penalty shall be subject to provision of reasonable opportunity of hearing to assessee : Karnataka HC

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