M/S SPECTRUM TOOL ENGINEERS PRIVATE LIMITED vs THE ADDITIONAL COMMISSIONER OF COMMERICAL TAXES

Court
Karnataka High Court

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HC-KAR
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STA No. 22 of 2025
C/W STA No. 23 of 2025

CNR: KAHC010670392025






IN THE HIGH COURT OF KARNATAKA AT BENGALURU

TH
DATED THIS THE 24 DAY OF SEPTEMBER, 2026

PRESENT

THE HON'BLE MR. JUSTICE S.G.PANDIT


AND

THE HON'BLE DR. JUSTICE CHILLAKUR SUMALATHA

SALES TAX APPEAL NO. 22 OF 2025
C/W
SALES TAX APPEAL NO. 23 OF 2025

BETWEEN:

M/S. SPECTRUM TOOL ENGINEERS
PRIVATE LIMITED
REGISTERED UNDER KVAT ACT 2003
NO.97 AND 100,
PETE CHANNAPPA INDUSTRIAL AREA
MAGADI MAIN ROAD,
KAMAKSHI PALYA
BENGALURU-560079

REP. BY ASSISTANT CHIEF FINANCE OFFICER
SHRI. BILIYAR KESHAVA ACHAR
S/O SRI B SRINIVASA ACHAR,
AGED ABOUT 54 YEARS,
TIN: 29500071129
…APPELLANT
(COMMON IN BOTH APPEALS)
(BY SRI. SATHYANARAYANA T. R., ADV.)

AND:

1. THE ADDITIONAL COMMISSIONER
OF COMMERCIAL TAXES
(SMR)-ZONE-2, KALIDASA ROAD,
VANIJAYA THERIGE KARYALAYA,
GANDHINAGAR
BENGALURU-560009.











Digitally signed by

NANJUNDACHARI
Location: High
Court of Karnataka

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2. THE DEPUTY COMMISSIONER OF
COMMERCIAL TAXES (AUDIT)-2.2,
DGSTO-02, BENGALURU.
…RESPONDENTS
(COMMON IN BOTH APPEALS)
(BY SRI. ADITYA VIKRAM BHAT, AAG)

THESE APPEALS ARE FILED UNDER SECTION 66(1) OF
KARNATAKA VALUE ADDED TAX ACT 2003 AGAINST THE ORDER
DATED 01.04.2025 PASSED IN ADCOM/ZONE II/APP2/SMR-02/2024-
25 AND ADCOM/ZONE II/APP2/SMR-01/2024-25 RESPECTIVELY ON
THE FILE OF THE ADDITIONAL COMMISSIONER OF COMMERCIAL
TAXES, (SMR)-2, GANDHINAGAR, BENGALURU, CONFIRMING THE
SHOW CAUSE NOTICE DATED 05.07.2024 PASSED BY THE
ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES (ZONE) II,
GANDHINAGAR, BENGLAURU, AND SETTING ASIDE THE ORDER
DATED 13.09.2021 AND 08.09.2021 RESPECTIVELY, PASSED IN VAT
AP 43/2020-21 AND VAT AP 42/2020-21 BY JOINT COMMISSIONER
OF COMMERCIAL TAXES (APPEALS)-2 BANGALORE AND RESTORE
THE RECTIFICATION ORDER DATED 08.12.2020, PASSED BY THE
DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT)-2.2,
BANGALORE IN CAS NO. 220062063.01 AND CAS NO. 294062455.01
RESPECTIVELY FOR THE TAX PERIOD FOR APRIL 2014 TO MARCH
2015 AND APRIL 2013 TO MARCH 2014.

THESE APPEALS, COMING ON FOR ADMISSION, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE S.G.PANDIT
AND
HON'BLE DR. JUSTICE CHILLAKUR SUMALATHA

ORAL JUDGMENT

(PER: HON'BLE MR. JUSTICE S.G.PANDIT)

STA No.22/2025 is filed by the assessee under Section
66(1) of the Karnataka Value Added Tax Act, 2003
(hereinafter referred to as ‘the Act’) challenging the
st
endorsement dated 11.08.2025 issued by the 1

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STA No. 22 of 2025
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respondent refusing the request of the assessee for
rectification of the revision Order dated 01.04.2025 for the
financial year 2014-15. STA No.23/2025 is filed by the
assessee under Section 66(1) of the Karnataka Value
Added Tax Act, 2003 (hereinafter referred to as ‘the Act’)
challenging the endorsement dated 11.08.2025 issued by
st
the 1 respondent refusing the request of the assessee for
rectification of the revision order dated 01.04.2025 for the
financial year 2013-14.

2. The facts in both the appeals are identical and
hence, hereinafter, the facts of STA No.22/2025 shall be
adverted to. The brief facts of the case are as under:
The assessee is engaged in the business of manufacture
and sale of pressed plastic moulded components, moulds
for plastic, LED and Solar lighting products, etc. The
assessee claimed input tax credit during the financial years
under consideration, for the purchases made from various
dealers. Upon verification of returns filed by the selling

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dealers, it was noticed by the department that the said
dealers have declared nil turnovers and nil tax liability for
the months in which purchases were made by the
assessee. Thus, the assessee’s case was selected for
reassessment. However, reassessment Order under
section 39(1) of the Act was passed by the respondent
No.2 on 06.05.2017, whereby, proceedings against the
assessee were dropped and the return filed by the
assessee was accepted. Thereafter, respondent No.2
issued notice under section 69(1) of the Act seeking to
rectify the order dated 06.05.2017. Consequently, order
under section 69(1) of the Act was passed by the
respondent No.2 on 08.12.2020, disallowing the claim of
input tax credit by the assessee.

3. Challenging the order dated 08.12.2020, the
assessee was in appeal under section 62 of the Act before
the Joint Commissioner of Commercial Taxes (Appeals)-2,
Bengaluru, which was allowed by order dated 13.09.2021

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and the claim of input tax credit was allowed.
Subsequently, suo-moto revision proceedings were
initiated by the respondent No.1 under section 64(1) of
the Act by issuance of notice dated 05.07.2024. The
revision order under section 64(1) of the Act was passed
by the respondent No.1 on 01.04.2025, whereby, the
appeal order dated 13.09.2021 was set aside and the
rectification order dated 08.12.2020 was restored.
Subsequently, rectification application filed by the
assessee against the revision order dated 01.04.2025 was
rejected vide endorsement dated 11.08.2025. Hence,
these appeals are filed by the assessee.

4. Heard Sri.Sathyanarayana T.R., learned counsel
for the assessee and Sr.Aditya Vikram Bhat, learned
Additional Government Advocate for the Revenue. Perused
the entire appeal papers.

5. During the course of hearing, learned counsel
for the assessee filed a memo dated 10.09.2026 for

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production of additional documents such as ledger
extracts, bank statements, sample invoices and e-sugam
to contend that the assessee had produced sufficient
materials before the respondent No.1 to establish the
genuineness of the transactions of the assessee with the
selling dealers and hence, it is submitted that the
respondent No.1 erred in declining the assessee’s claim for
input tax credit. On 17.09.2026, the learned AGA was
directed to secure the records and verify as to whether the
aforesaid documents were produced before the respondent
No.2. Today, learned AGA would submit that, none of the
documents produced before this Court vide memo dated
10.09.2026 were placed before the respondent No.2. At
this juncture, learned counsel for the assessee requests
that the matter be remanded to the prescribed authority,
i.e. respondent No.2 in order to peruse the documents and
examine the genuineness of the documents and then take
a decision with regard to the claim of the assessee for
input tax credit.

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6. A bare perusal at the documents produced vide
memo dated 10.09.2026 indicates that the assessee has
produced material which requires examination in light of
the principles laid down by the Hon’ble Apex Court in
STATE OF KARNATAKA VS M/S ECOM GILL COFFEE
TRADING PVT. LTD. reported in (2023) 18 SCC 809.
However, this Court in appeal would not be the
appropriate forum to decide the entitlement of the
assessee for input tax credit on the basis of documents
produced for the first time before this Court, inasmuch as
the same would be a fact finding exercise. Thus, we deem
it appropriate to remand the matter back to the
respondent No.2 to peruse the documents produced vide
memo dated 10.09.2026 and take a decision as to the
entitlement of the assessee for input tax credit.

7. Hence, we proceed to pass the following

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C/W STA No. 23 of 2025

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ORDER

a) STA No.22/2025 and STA No.23/2025 are
allowed to the above extent.

b) The impugned Orders dated 11.08.2025 and
01.04.2025 in both the appeals are set aside.

c) The matter is remanded back to the
respondent No.2.

d) The respondent No.2 shall peruse the
documents produced by the assessee and shall
pass the assessment order as expeditiously as
possible, in any case, within an outer limit of 3
months from the date of this judgment.

Sd/-
(S.G.PANDIT)
JUDGE


Sd/-
(DR.CHILLAKUR SUMALATHA)
JUDGE

NC
CT:bms
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