Court remits case back to Assessing Authority

Staff Reporter

BANGALORE: Hindustan Aeronautics Ltd. (HAL), Bangalore-based public sector giant, on Thursday won a breather when the Karnataka High Court directed the Commercial Tax Department to assess its sales tax liability afresh.

The department had levied a sales tax of Rs. 1,300 crore on HAL. The PSU had challenged it before the Tax Tribunal. The tribunal reversed the assessment order of the Assessing Authority.

The State then filed a petition in the High Court challenging the tribunal order. It justified the levy of sales tax and said HAL was bound to pay it. It wanted the court to set aside the tribunal order.

HAL opposed the Government stand and assailed the assessment order. It said the Assessing Authority had wrongly assessed the tax liability.

It urged the court to confirm the tribunal order.

A Division Bench comprising Justice K.L. Manjunath and Justice B.V. Nagaratna set aside the tribunal order. It remitted the assessment orders back to the Assessing Authority and asked the tax liability to be assessed afresh.

This judgment comes as a shot in the arm for HAL as it will have an opportunity to argue the case against the levy of Rs. 1,300 crore before the Assessing Authority. Till the tax liability is decided afresh, the payment of levy will be deferred.