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M/s Bharat Electronics Ltd. Versus State of Karnataka And Others

2016 (4) TMI 609 - KARNATAKA HIGH COURT

Waiver of pre-deposit - Pre-deposit asked to grant stay of recovery of 70% disputed amounts - Manufacture of defence producta - Held that:- it would be serving the purpose of both the State and the petitioner if a compromise could be arrived at in the petitioner being directed to deposit atleast 10% of the demand amount before 31st March 2016 and furnishing of a bank guarantee for the remaining 20% of the demand, subject to the result of the appeal. Accordingly, the Appellate Authority is direct .....

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lic sector undertaking established by the Government of India under the Ministry of Defence. It is engaged in designing, developing and manufacturing products such as military radars, electronic warfare systems, naval systems, avionics, defence communication equipment, solar products, electronic voting machings etc. and caters to the defence and non-defence organizations and other categories of work. The petitioner is a registered dealer under the Karnataka Value Added Tax Act, 2003 and is also .....

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ication No.FD 116 CSL 2006(9) dated 31.3.2006 and Notification No.FD 116 CSL 2006(16) dated 06.04.2006., which are amended from time to time. The goods are notified under the said notifications with reference to corresponding chapter hearing/sub-heading of the CET Act. The petitioner has classified the goods manufactured by it under the relevant entries of the aforesaid notifications, on the basis of the CTH classification and discharged VAT at 5.5% on sale of said products. The third respondent .....

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Act. Inter-alia, it was proposed to reject the classification of Electronic Voting Maching(EVM), Digital Flight Control Computer and its parts, Radar Warning Systems and its parts, Missile Warning System and all other products sold by the petitioner under the prevailing IT Product Notifications and instead of it sought to classify the same as unscheduled commodity attracting tax at 14.5% apart from assigning reasons for rejecting the classification of the said products. The petitioner had appea .....

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77; 11,70 Crore, which was subsequently reduced to ₹ 4,63 Crore. The third respondent has also issued consequential demand notice to make payment. Aggrieved by this, the petitioner had filed an appeal before the first appellate authority namely the Joint Commissioner of Commercial Taxes(Appeals-6), the fourth respondent herein under Section 62 of the KVAT Act, 2003. In terms of the said Section, the fourth respondent is empowered to grant stay of recovery of 70% disputed amounts only on a .....

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aid down that in cases involving Central Government Undertakings the State Government should not insist on any such pre-deposit in considering appeals filed in such situations. The said judgment was rendered while dealing with Essential Commodities Act. This Court in Bharat Earth Movers Limited, Bangalore, vs State of Karnataka and others [2016 (84) Kar.L.J.332] and the Bombay High Court in the case of Rashtriya Chemicals and Fertilisers Limited vs Union of India [2011 (270) E.L.T.11 (Bom)] have .....

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eneral, on the other hand, would submit that if the petitioner seeks to rely on the decision of the Supreme Court to seek such waiver, it would be appropriate for the petitioner to raise such a plea before the Appellate Authority. The present petition is misconceived. In any event, pre-deposit is required as a safeguard to the legislature to ensure the payment as regards the disputed claim. If the petitioner is given the benefit of any waiver, it would result in the State being deprived of funds .....

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