2026-VIL-503-KAR
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VAT High Court Cases

Karnataka Sales Tax Act, 1957 - Rectification of assessment order and entitlement to interest on delayed refund in view of deemed rectification – Levy of tax at the rate of 20% on the sale of coconut oil under a brand name. The petitioner had challenged the amendment imposing the higher tax rate, which was initially struck down by the High Court but later upheld by the Division Bench - The petitioner filed a rectification application seeking modification of the assessment orders, which was not rejected within 60 days and hence deemed to have been allowed - Whether the petitioner is entitled to interest on the delayed refund and whether the subsequent proceedings are valid in light of the deemed rectification – HELD – The rectification application stood deemed to have been allowed upon expiry of 60 days as per the second proviso to Section 25-A(1) of the KST Act - Though it may be open to the Assessing Authority to pass more than one rectification order, the same must be in conformity with the statutory provisions. Once the rectification application stood allowed by virtue of the legal fiction, and the deemed rectification had come into force, the Assessing Authority could not have passed another rectification order. Consequently, the rectification order and all subsequent proceedings, including the revisional order, fresh assessment order, refund notice and appellate order, are without jurisdiction and non-est in the eye of law. The petitioner's right to interest under Section 13-A of the KST Act for the delay in granting the refund, i.e., from 22.06.2010 to 09.01.2012, could not be defeated by the subsequent invalid proceedings - The respondents are directed to pay interest at the rate of 6% per annum for the period of delay - The order of the Tribunal is set aside and the Sales Tax Revision Petition is allowed
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