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2016 (9) TMI 825 - KERALA HIGH COURT

2016 (9) TMI 825 - KERALA HIGH COURT - [2016] 95 VST 467 (Ker) - Imposition of penalty under Section 67(1) of the KVAT Act - claim of exemption from payment of tax on the turnover based on Form No.43 - commodity under Section 6(7)(b) of the KVAT Act 2003 - whether the petitioner was entitled for any exemption in terms of the Statute under Section 6(7)(b)? - Held that: - the consumable used by the developer or industrial unit or establishments situated in the Special Economic Zone should be for s .....

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se keeping consumables - ineligible for exemption. - Whether in the light of Form No.43 issued by the purchaser whether the petitioner can be imposed with penalty? - Held that: - a bare reading of Section 6(7)(b) would clearly indicate that the product supplied by the petitioner is liable to be taxed and no exemption can be claimed at all. That apart, as rightly contended by the learned Government Pleader, the petitioner did not raise any invoice showing the taxable component. If the petitio .....

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or the same. Therefore, it cannot be contended that there is any lack of jurisdiction on the part of the authorities in proceeding further. - No interference with the order required - If aggrieved, the remedy of the petitioner is to challenge the penalty orders by approaching the revisional authority and it shall always be open for the petitioner to file appropriate objection to the notice under Section 25(1) of the Act - rest part of petition dismissed - decided against petitioner. - W.P (C .....

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issued by the purchaser. However, penalty proceedings had been taken by issuance of notice under Section 67(1) of the KVAT Act inter alia observing that the commodity described in Form No.43 did not come within the purview of Section 6(7)(b) of the KVAT Act 2003. Though the petitioner preferred objection without considering the same penalty orders had been passed by which the petitioner had been called upon to pay double the amount of tax sought to be paid for the respective years. Without chall .....

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sis of penalty is liable to be set aside, there is no question of the Assessing Officer further proceeding under Section 25(1) after lapse of considerably long time. It is contended that the assessment had been finalized without any objection by the Assessing Authority. No steps had been taken under Section 22 of the KVAT Act and now after the penalty orders are issued, fresh notice had been issued under Section 25(1), which is without jurisdiction. 3. Learned counsel for the petitioner submits .....

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petitioner had not raised any invoice showing the tax payable whereas petitioner has raised invoices on the purchasers showing nil tax. It is based on the said invoice, the purchasers had issued Form No.43. Therefore, it is a clear case of evasion of tax which has been deliberate and there is justification on the part of the Intelligence Officer who have initiated proceedings under Section 67(1) of the Act and passed final orders. It is also stated that there is no legal bar for issuing a fresh .....

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Assessing Authority is not an obstacle for the Intelligence Wing to invoke Section 67(1) of the Act. 5. Learned counsel for the petitioner, however, submits that even assuming for the sake of argument that materials are taxable, still penalty cannot be imposed as there is no deliberate act in evading tax and the petitioner only relied upon Form No.43 given by the purchasers. Reference is made to judgment of the Apex Court in E.I.D. Parry (I) Ltd. v. Assistant Commissioner of Commercial Taxes and .....

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ection 6(7)(b) reads as under: 6(7)(b) Sale of any building materials, industrial inputs, plant and machinery including components, spares, tools and consumables in relation thereto to any developer or industrial unit or establishments situated in any Special Economic Zone in the State for setting up the unit or use in the manufacture of other goods shall, subject to such conditions or restrictions, as may be prescribed, be exempted from tax. 7. Petitioner apparently is a dealer in cleaning mate .....

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he purpose of cleaning the building and other facilities, furniture etc cannot be treated as a consumable used in relation to setting up of the unit or in the manufacture of other goods. Therefore, it is apparent from the Statute itself that the petitioner is not liable for any exemption. The Intelligence Officer had issued notice clearly indicating that the petitioner is not entitled for the exemption. The only ground taken by the petitioner is that Form No.43 has been submitted by the purchase .....

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