The Karnataka High Court has ruled that any mistake said to have been committed by the learned Chartered Accountant in filing VAT Form 240 would not be construed as the mistake apparent from the record to attract Section 69[1] of the Act.
The ruling was pronounced by Justice S. Sujatha, in the case of M/S. Fresh and Honest Café Limited V. The Deputy Commissioner [Ct] and Anr.
The petitioner was a private limited company and a registered dealer under the provisions of the Karnataka Value Added Tax Act, 2003. While filing the VAT Form 240, due to inadvertence, a mistake crept in the Form. The ineligible income tax deduction under Section 11 was shown as Rs.6,25,463/- which indeed pertains to the TDS of the petitioner deducted by the respective contractors under Section 18 of the Act. The claim made by the petitioner towards the input tax credit on this deducted tax amount of Rs.6,25,436/- was denied by the Assessing Authority mainly relying on VAT Form 240. Though the rectification application was filed under Section 69[1] of the Act, it has been rejected.
The counsel for the petitioner contended that the authority failed to appreciate the mistake that was apparent from the record in filing the VAT Form 240 and the same ought to have been rectified considering the rectification application submitted by the Chartered Accountant. The petitioner further contended that the respondents are acting hastily to recover the tax amount determined without waiting for the appeal period provided under the Act for the petitioner to exercise.
The Revenue argued that the petitioner approached the Court without exhausting the alternative statutory remedy.
The Court pointed out that, “If the authority is satisfied that there is any mistake apparent from the record, the provisions of Section 69 can be invoked to rectify such mistake”
Further adding more clarity to Section 69[1], the Court said that the Section would be attracted when there is any mistake from the record while concluding assessment proceedings by the Prescribed Authority, the Appellate Authority or Revising Authority.
The Court further clarified that, “Since the factual aspects involved in the case are analysed and the certificate is issued by the learned Chartered Accountant, such mistakes, if any in the VAT Form 240 ought to have been brought to the notice of the prescribed authority at the time of the assessment proceedings”.
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