TMI Blog2010 (10) TMI 962X X X X Extracts X X X X X X X X Extracts X X X X ..... m 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere verified for the assessment years between 1998-99 to 2002-03. After inspecting the business premises of the appellant, the assessing authority took up the final assessment proceedings for the year 2001-02 and issued a pre-assessment notice on January 15, 2005 proposing to disallow the deductions claimed by the appellant under rule 6(4)(m) of the KST Rules, 1957 on the ground that the goods were not used in the same form. In the notice there was a proposal to disallow the claim of the assessee insofar as deduction on the works contract done by him outside the State of Karnataka. The appellant filed a reply to the proposition notice and after considering the same the assessing authority confirmed its opinion as per the proposition noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re reflected in the books of account and the same deserves to be accepted. Coming to the controversy raised before the appellate authority, the appellate authority on consideration of records was satisfied that certain goods purchased by the assessee like plywood, glass and other hardware items were brought directly to the work site and so far as other items like chairs, air-conditioners, etc., are concerned, were brought directly from the traders who sold the said items as finished products. According to the appellate authority there was no change in the form of the goods purchased by the appellant-assessee and what items were purchased by the appellant-assessee were used in the same form as per Explanation III to rule 6(4) of the KST R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordance with observations made by him. As a matter of fact except repeating the observations of the assessing authority no independent reasons were given by the revisional authority. Aggrieved by this order of the revisional authority, the present appeal is filed. Following questions of law arises for consideration: (a) Whether, 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 sustainab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against these, the learned Government Advocate submits, though the business of the appellant-assessee was in existence right from 1998, only in the year 2001 when there was inspection by intelligence wing of the Department, the actual nature of the business and the amounts involved in the business came to light. From the arguments across the Bar, it was brought to the notice of the court that though same proceedings were initiated for the assessment year 1998-99, it is already disposed of, by the Tribunal in favour of the assessee. However, we are not concerned with the said proceedings as it pertains to different assessment year and it is not a subject of controversy before us. So far as the present issue is concerned, we note that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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