TMI Blog2012 (8) TMI 871X X X X Extracts X X X X X X X X Extracts X X X X ..... concessional tax. Later on, sells away such inputs contrary to such declaration. In both the cases, the person can be levied penalty after being given opportunity. In the instant case, section 5A(3)(i) of Karnataka Sales Tax Act does not apply, because the assessee has got a manufacturing unit. In the instant case, he has sold the granite after processing. Processing of granite may not be the manufacturing activity. But however, the assessee has not violated the provisions of section 5A(1) and 5A(3)(ii), in other words, has not sold the goods in violation of the declaration. Therefore, levy of penalty is bad in law. The appeal is allowed. - S.T.A. No. 41 of 2010 - - - Dated:- 10-8-2012 - SREEDHAR RAO K. AND MANOHAR B., JJ. For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (2), sells away such inputs contrary to such declaration or condition, the assessing authority, after giving such person a reasonable opportunity of being heard, shall, by order in writing, impose upon him by way of penalty a sum, which shall not be less than the amount of tax leviable under section 5 on the sale of the inputs so purchased or tax leviable under clause (b) of sub-section (3) of section 5 or section 6 on the inputs so purchased, but which shall not exceed one and half times the amount of such tax; (iii) having his manufacturing unit inside the State and having purchased any inputs by furnishing a declaration under first proviso to sub-section (1) or having paid tax on any inputs under sub-section (2), uses s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and by giving a new dimension to the meaning of the word 'manufacturing' to meet the present industrial concepts? (c) Whether, in the facts and circumstances of the case, the first respondent is legally justified in holding that the appellant misused form 37 declarations and therefore liable to penalty under section 5A(3)(iii) of the Act? (d) Whether the levy of penalty under section 5A(3)(iii) of the Act in respect of assessment year 1996-97 under appeal is legally justified in the facts and circumstances of the case, when similar penalty levied in respect of the previous assessment year 1995-96 and the subsequent assessment year 1997-98 has been set aside by the Appellate Tribunal as not legally justified and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have the benefit of concessional tax. In the second case, a person having manufacturing unit, purchases inputs by furnishing declaration under subsection (1) and pays only concessional tax. Later on, sells away such inputs contrary to such declaration. In both the cases, the person can be levied penalty after being given opportunity. In the instant case, section 5A(3)(i) of Karnataka Sales Tax Act does not apply, because the assessee has got a manufacturing unit. In the instant case, he has sold the granite after processing. Processing of granite may not be the manufacturing activity. But however, the assessee has not violated the provisions of section 5A(1) and 5A(3)(ii), in other words, has not sold the goods in violation of the declarati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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