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M/s. Bharath Earth Movers Ltd Versus State Of Karantaka

2016 (6) TMI 904 - KARNATAKA HIGH COURT

Levy of penalty - claim of input tax credit applying the wrong formula - whether the act of the petitioner would fall in the category of ‘unintentional act or not’ - Section 72 of the KVAT Act - purchases of petroleum products including furnace oil - Held that:- first appellate authority in the present matter, has found that the action was not unintentional and therefore, the benefit of circular would not be available to the assessee. - The question of non- applicability of correct formula c .....

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p> For the Petitioner: Sri. Thirumalesh, advocate For the Respondent: Sri. T.K. Vedamurthy, GP ORDER The petitioner-assessee has preferred the present petitions by raising the following substantial questions of law: 1. Whether on the facts and in the circumstances of the case, the Karnataka Appellate Tribunal was right in holding that the petitioner was not entitled to applicability of the instructions issued by the Commissioner of Commercial Taxes i .....

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? 3. Whether on the facts and in the circumstances of the case, Tribunal was right in not following the order passed by another Bench of the Tribunal on the same issue and relied upon on behalf of the petitioner? 2. We have heard Mr.Thirumalesh, learned Counsel appearing for the petitioner. 3. We may record that in order to find out as to whether the act of the petitioner would fall in the category of unintentional act or not , the Tribunal at paragraphs-13 to .....

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ly. The factors which could cause confusion in using the formula prescribed under Rule 131 do not exist in these appeals. The appellant has not demonstrated the existence of any such factors or confusions in the use of the said formula. The Prescribed Authority clearly states that the Appellant has claimed input tax credit at 12.5% in the case of furnace oil or other petroleum products used for manufacture of finished goods; that the Appellant has not maintained the classification of .....

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to facts. The Prescribed Authority also notes that the Deputy Commissioner of Commercial Taxes (Vigilance), who has inspected the books of accounts of the Appellant on 3 different dates has found that the dealer has not applied the restrictions of Section 11(a)(5) and Section 11(a)(6) while claiming the input tax credit with respect to purchases utilized for stock transfers outside the State and on purchases of petroleum products which include furnace oil in entirety. It is the finding of the Pr .....

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rescribed Authority has allowed excess tax credit higher than that claimed in the returns. If this is true, the Prescribed Authority has exceeded his jurisdiction as under Section 39(1) he is vested with powers of re- assessment if it is found that, for any tax period, tax admitted in the return is less than the correct tax liability and not otherwise. This is an issue which is not before us and the same is opened to revision by the jurisdictional authorities. Also, the A .....

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determined at ₹ 99,13,78,006/- compared to the tax admitted and paid along with the returns of ₹ 99,05,74,089/- leaving a difference tax payable of ₹ 8,03,917/- under the CST Act and refundable amount of ₹ 19,88,44,369/- has arisen because the Appellant had paid a tax of ₹ 20.00 crores pursuant to the orders under Section 39(1) dated 30-6-2010, that the said re-assessment order was rectified vide orders dated 24-2-2011 after the Appellant filed Form-C declaration r .....

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se of the Appellant, the transactions necessitating partial rebating have occurred earlier, have been occurring in every tax period of purchase of inputs and disposal of outputs and therefore, this is not an un-intentional case as specified in the Circular. In Para (14) of the Circular, it is clearly stated that wherever it is proved that reversal of input tax deducted in excess of what is allowed under the provisions of the Act and Rules, is not an account of any deliberate act of n .....

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a possibility when a cycle of transaction is less than 6 months or spread over in two to three months of one financial year and two or three months in another financial year. The Appellant does not categorically state as to what was his difficulty or confusion in using the formula prescribed under Rule 131. Rather, it is the case of the Appellant that in every case of partial rebating, the benefit of Para (14) of the Circular is available and therefore, penalty and intere .....

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ellate Authority has considered the contentions of the Appellant and has come to the categorical finding that the benefit of the Circular is not available to the Appellant. We find no reason to interfere with the impugned orders with respect to this issue. Hence, we answer Point No.1 in the Affirmative. 4. The aforesaid shows that the first appellate Authority after examining the contentions of the petitioner herein who was appellant before the authority has come to the categorical f .....

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the ultimate fact finding authority. This Court may interfere with such finding of fact if it is a mixed question of law and fact or the view taken by the Tribunal on the basis of the facts available on record is an impossible view and not the possible view. If it is a possible view, this Court may not sit in an appeal over such finding of fact. 6. The learned Counsel for the petitioner attempted to contend that the Tribunal has gone by a particular paragraph of the Circular viz., pa .....

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He also contended that the petitioner, during the course of hearing, did rely upon the decision of the co-ordinate Bench of the Tribunal dated 28.11.2013 in case of Sri Srinivas, Partner, M/s.Shivaganga Food Oil Extractions Vs. State of Karnataka in STA Nos.193 to 221/2012. But the Tribunal without dealing with the said aspects in detail has just brushed aside the s aid decision which is not permissible. He submitted that if there is a decision of the co-ordinate Bench of the Tribunal touching u .....

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he part of the assessee and inspite of the same, the benefit of circular was not given fully. Hence, the Tribunal in the said case had taken the view that once it was found that there was no malafide intention on the part of the petitioner, it was required for extending the benefit and accordingly the order of penalty and interest was set aside by the Tribunal. Such is not the fact situation in the present case, inasmuch as the first appellate authority in the present matter, has found that the .....

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