TMI Blog2014 (4) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... f 25% as per clause 3 of the said table - No infirmity or irregularity in the said order - Hence, appeals are dismissed – Decided against appellant. - STA Nos.45/2011 & 50-64/2011(T-KVAT) - - - Dated:- 7-3-2014 - Mr. Dilip B Bhosale and Mr. B Manohar, JJ For the Appellant : Sri K J Kamath, Adv. For the Respondent : Sri T K Vedamurthy, HCGP JUDGEMENT These Sales Tax Appeals are directed against the order dated 25-06-2011 in ZAC-I/BNG/SMR-70/10-11 passed by the Additional Commissioner of Commercial Taxes, Zone-I, Bangalore in exercise of power under Section 64(1) of the Karnataka Value Added Tax Act, 2003 (for short the KVAT Act ) setting aside the order dated 26-02-2009 passed by the Joint Commissioner of Commercial Taxes (Appeals)-I (for short the First Appellate Authority ) for the assessment years 2005- 06 and 2006-07. 2. The appellant is a Private Limited Company and a dealer registered under the provisions of KVAT Act engaged in the execution of works contract of Road marking by using hot melt Thermoplastic road marking materials and glass beads. The appellant filed monthly returns in Form No.11 for the period from 01-04-2005 to 31-03-2006, 01-04-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and set aside the reassessment order and also levy if penalty and interest. The First Appellate Authority held that when the actual labour and like charges incurred in the execution of the work contract are ascertainable from the books of account, the Assessing Authority cannot resort to deduction of labour and like charges at the standard rate as provided under Rule 3(2)(m) of the KVAT Rules. 7. On scrutiny of the order passed by the First Appellate Authority, the Revisional Authority found that the order passed by the First Appellate Authority is erroneous in law and also prejudicial to the interest of the Government revenue. Accordingly, invoking its power under Section 64(1) of the Act issued notice to the appellant calling upon them to file statement of objections. 8. In pursuance of the notice issued by the Revisional Authority, the appellant entered appearance and filed detailed statement of objections contending that there is no infirmity or irregularity in the order passed by the First Appellate Authority setting aside the order passed by the Assessing Authority. Further, Section 64(1) cannot be invoked when the aggrieved party has got right of appeal. The appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of 25% deduction towards the work contract. Further, on scrutiny of the order passed by the First Appellate Authority, the Revisional Authority found that without taking into consideration the relevant materials the order has been passed by the First Appellate Authority which is erroneous and prejudicial to the interest of the Revenue. It is always open to the higher authorities to re-examine the matter and correct the error. The Revisional Authority after considering the entire matter, set aside the order passed by the First Appellate Authority and restored the order passed by the Assessing Authority. There is no infirmity in the said order and sought for dismissal of the appeals. 10. These appeals were admitted to consider the following substantial questions of law: 1. In view of the fact that the First Appellate Authority has framed a speaking order dated 26.02.2009 (Annexure-E) and after recording findings of fact therein that the actual labour and other like charges incurred in execution of works contract are ascertainable from the books of accounts maintained by the Appellate and the deduction of the same has been allowed therein, after verification of the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed an appeal before the First Appellate Authority which came to be allowed the appeal on the ground that the assessee has produced the necessary records and the expenditure incurred in the execution of work contract are ascertainable as per the books of account. Hence, deduction of 25% is erroneous and the appellant is entitled for deduction to an extent of 30% under column 3 of the V Schedule. Being aggrieved by the order passed by the First Appellate Authority, the Revisional Authority found that the order passed by the First Appellate Authority is erroneous and prejudicial to the interest of the Revenue. Accordingly, issued notice to the appellant. After hearing the appellant, the Revisional Authority passed the order impugned in this appeal. 13. The provisions of the Act clearly disclose that if the expenditure incurred for executing the work contract is ascertainable from the books of account maintained by the dealer, then he is eligible for deduction as per the expenditure he has incurred. On the other hand, if the expenditure incurred for the work contract is not ascertainable, then the provision of Rule 3(2)(m) has to be invoked. Rule 3(2)(1) of the KVAT Rules is not app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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