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2010 (10) TMI 962 - KARNATAKA HIGH COURTWhether, in facts and circumstances of the case, especially when the first appellate authority has examined all the documents in respect of the local RD purchases of materials for use in the interior decoration works and given the finding that the materials have been used in the same form, can the order of the second respondent revising/setting aside the first appellate order and restore the assessment order sustainable in law? Considering the documents produced in respect of purchase of materials in other States for execution of works in those States and not brought the materials to this State as is visible from the finding of the first appellate authority, whether the order of the second respondent sustainable in law? When there is voluntary disclosure of the turnover in the monthly return and there is no change in the same during assessment, is it legal to impose penalty under section 12(4) of the KST Act? Held that:- If at all the purchase bills outside the State of Karnataka are part of the record, unless there is material to show that those goods were brought into local area, opinion of the first appellate authority that for the contract works executed by the appellant-assessee outside Karnataka, such goods must have been used, which is evident from the contract agreement between the parties is just and proper. Similarly, unless there is material to show that the goods purchased by the appellant were used resulting in a different form, the appellant-assessee was entitled for deduction of the cost of the material as per the Explanation III to rule 6(4) of the KST Rules of 1957. For the reasons above, we are of the opinion that the revisional authority was incorrect in setting aside the orders of the first appellate authority. Accordingly, the appeal is allowed confirming the orders of the first appellate authority-Joint Commissioner of Commercial Taxes.
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