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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