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M/s. Nav Bharat Steel Versus State of Karnataka by Deputy Commissioner of Commercial Taxes (Audit) – 2, Kalaburgi

2016 (5) TMI 1190 - KARNATAKA HIGH COURT

Imposition of penalty under Section 72(2) of the KVAT Act - Disallowance of input tax credit in respect of goods viz. iron and steel purchased from the registered dealers - Selling dealers were absconding and were involved in bill trading - Held that:- from the various judgments, it is clear that the burden lies on the petitioner to establish that the dealers from whom the petitioner had purchased the goods have remitted the tax collected to the Government. Mere obtaining the registration number .....

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of the Act and attracts levy of penalty under Section 72(2) of the Act. - Decided against the petitioner - STRP Nos. 200003/2015 & 200003-08/2016 - Dated:- 27-4-2016 - MR. ASHOK B. HINCHIGERI AND MRS. S. SUJATHA For The Petitioner : Sri Ananth S. Jahagirdar, M.Thirumalesh and P.A.Chillal Advocates For The Respondent : Syed Habeeb, Addl. Govt. Advocate) ORDER These revision petitions are filed by the assessee challenging the common judgment passed by the Karnataka Appellate Tribunal, Bangalore i .....

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) of the Act concluded reassessment proceedings and disallowed the input tax credit claimed by the petitioner in respect of the goods - iron and steel, purchased from M/s Huda Traders Moratagi, since the selling dealers were absconding and were involved in bill trading. The Prescribed Authority also levied penalty under Section 72(2) of the Act. 3. Being aggrieved by the reassessment orders, the petitioner preferred First Appeals before the Joint Commissioner of Commercial Taxes (Appeals), Kalab .....

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uda Traders Moratagi who had issued tax invoices as per the procedure prescribed under the Act. The prescribed authority without providing adequate opportunity for the petitioner to put forth his explanation to the proposition notice, proceeded to pass the reassessment orders, denying the input tax credit claimed by the assessee. The tax invoices were produced before the First Appellate Authority. However the First Appellate Authority, without considering the same, confirmed the order of the Pre .....

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s claimed by the assessee. The learned counsel appearing for the assessee has placed reliance on the decision of MILANO PLYWOOD SUPPLIERS vs STATE OF KARNATAKA (2014(80) KLJ 206). 6. Sri. Syed Habeeb, learned Addl. Govt. Adv. Appearing for the revenue justifying the orders passed by the Tribunal as well as the authorities would contend that the assessee has purchased the goods from a bogus or non-existent dealer. Despite several opportunities provided to the assessee neither the books of account .....

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inst the authorities for disallowing the input tax credit on the tax amount not remitted to the State Government. 7. We have given our anxious consideration to the rival submissions made at the bar and perused the material on record. 8. It is noticed that the assessing officer/prescribed authority has visited the business premises of the dealer on 6.2.2013 on the assignment note issued by the Commissioner of Commercial Taxes, Bangalore. No books of account and tax invoices were produced before t .....

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ssed by the authorities in terms of Section 70 of the Act and following the Judgment of this Court in the case of M/s MICROQUAL TECHNO PRIVATE LIMITED vs ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, ZONE 1, BANGALORE ((2012)52 VST 362 (Kar)) and M/S PACKWELL INDUSTRIES vs THE STATE OF KARNATAKA (STRP Nos.1/2011 & 321 to 347/2012 disposed of on 20.7.2012) dismissed the appeals. 10. It is apposite to refer to Section 70 of the Act which reads thus:- "70. Burden of proof: (1) For the purpo .....

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ducing the invoices which he knows to be not genuine in support of his claim of input tax refund on the basis that he had paid input tax is a case of evasion of tax. In this case also the appellant has produced the un-signed purchase statement not the valid tax invoices and the books of account to claim the input tax even though the selling dealers has not paid the taxes to the Government and the investigations have proved that they are non-existing dealers. By obtaining the registration number .....

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