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Bharat Heavy Electricals Ltd. Versus The Deputy Commissioner of Commercial Taxes (Audit)

2017 (1) TMI 744 - KARNATAKA HIGH COURT

Validity of the impugned assessment order dated 28.11.2016 - denial of exemption of tax in respect of the sales made by the petitioner-company outside the State of Karnataka - the Company has not furnished the documents as required by the provisions of the Act i.e.,u/s 4 of CST’s Act 56. In the absence of such documents, the claim of exemption is rejected and levied tax thereby. - Held that: - The imposition of tax under the provisions of the KVAT Act, 2003 in the present case on the sales c .....

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so that the interest of either of the parties is not adversely affected. - The petitioner-assessing company not only has the remedy by way of filing an appeal against the impugned assessment order, but, if the assessing company is of the opinion that there are factual errors in the impugned order, and such mistake of facts is apparent on the face of the impugned order, it has a remedy by way of filing the appropriate Rectification application under the provisions of Section 69 of the Act. .....

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its manufacturing units and sales units at various places all over the country and in other States also outside the State of Karnataka. 2. In these writ petitions, a challenge has been laid to the impugned assessment order passed by the Respondent-Deputy Commissioner of Commercial Taxes (Audit)-2.7, Bengaluru, on 28.11.2016 for the assessment period April 2010 to March 2011, raising a net demand of ₹ 24,72,79,464/- including the tax, interest and penalty under the provisions of KVAT Act, 2 .....

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rs by its manufacturing/sales units situated outside the State of Karnataka in the States like Andhra Pradesh, Gujarath, Jharkand, Orissa, Tamilnadu, Uttar Pradesh and West Bengal and these goods never entered State of Karnataka. 4. The relevant portion of the impugned order to the aforesaid claim and the reasons for denial of such exemption is quoted below for ready reference:- 3. LSOK(Local Sales Outside Karnataka) The dealer company has effected local sale outside Karnataka (LSOK) and declare .....

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CHENICAL DG SETS 1573552 NORTH CHENNAI-I & II(DG SET) 29509615 NTECL-VALLUR 90671141 TNEB-NORTH CHENNAI-UNIT-I 58929630 TNEB-NORTH CHENNAI-UNIT-II 9957278 TOTAL 190641216 UTTAR PRADESH UPR VUNL-ANPARA 93061926 TOTAL 93061926 WEST BENGAL DVC-AHP MEJIA UNIT 1 & 2 1153846 DVC-DURGAPUR-TPS-AHP 18571116 TOTAL 19724962 GRAND TOTAL 953492290 THE ANALYSIS OF TURNOVER PERTAINING TO EXEMPT TURNOVER There is a claim of exemption on the turnover of Sale outside Karnataka and has submitted the docum .....

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The above amount as per the Company s details is pertaining to the other State Turnovers. But the Company has not furnished the documents as required by the provisions of the Act i.e.,u/s 4 of CST s Act 56. As per the Section, there should be a contract to the sale and purchase, the movement of goods and delivery/termination of goods shall move as per the covenant of the contract, and shall produce the required LRs to allow the Sales outside the State. In the absence of such documents, the clai .....

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h was to the extent of ₹ 95.34 crores in the present year and such exemption was being allowed by the Assessing Authority in the previous Assessment years, even after coming into force of the KVAT Act, 2003, but for the present assessment period in question, the Assessing Authority refused that exemption even though the relevant details, audit reports and documents were furnished before him during the course of the assessment proceedings and he also submitted that no specific proposition n .....

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ove. 6. On the other hand, Mr.T.K.Vedamurthy, learned AGA for the Respondents-Department, upon being instructed by the concerned Assessing Authority who was present in the Court, also sought to vehemently oppose these objections and while raising the plea of non maintainability of these writ petitions on the ground of availability of the alternative remedy by way of an Appeal under Section 62 of the KVAT Act, 2003, by producing the bulk of Invoices, he sought to submit before the Court that from .....

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tside the State of Karnataka and terminating in other States, other than Karnataka, were proved by the petitioner-assessee and therefore, the imposition of tax on the petitioner-assessee in the present case by denying such exemption was justified. He also drew the attention of the Court towards the prescribed Form VAT-100 and VAT-240 and relevant Rules framed under the Rules of KVAT Act, 2003 namely, Rule No.34(3) and Rule 138 of KAVT Act Rules, 2005 and he submitted that the assessee has volunt .....

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of Karnataka to the purchasers in other States. 7. Having heard the learned counsels for the parties, this Court is of the view that there are alternative remedies available to the petitioner- assessing company to challenge the validity of the impugned assessment order dated 28.11.2016. 8. The imposition of tax under the provisions of the KVAT Act, 2003 in the present case on the sales claimed to be exempt and made outside the State of Karnataka requires going into the relevant facts of these tr .....

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ot only has the remedy by way of filing an appeal against the impugned assessment order, but, if the assessing company is of the opinion that there are factual errors in the impugned order, and such mistake of facts is apparent on the face of the impugned order, it has a remedy by way of filing the appropriate Rectification application under the provisions of Section 69 of the Act. 10. The learned senior counsel for the petitioner- assessing company urged before the Court that since the filing o .....

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any would be unable to deposit the requisite portion of the disputed demand of ₹ 24.72 crores at this stage. 11. However, upon instructions of the officials of the petitioner-company present in the Court, he fairly submitted that if a minimal portion of the said demand say to the tune of ₹ 5 crores is directed to be deposited, for disposal of the writ petition as prayed by directing the respondent-Assessing Authority to consider such Rectification application on merits, the petitione .....

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