9911796707
TMI Blog2019 (7) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... period from April 2014 to September 2014, within the assessment year 2014-15, was rejected by the Assessing Authority finding the following irregularities; (1) The dealer has not accounted intra-state purchase made on 05.08.2014. (2) The gross loss of Rs. 43,51,555.94/- claimed during the period is false and the trading account produced in support are manipulated with an intention to evade payment of the tax due. 3. Assessment was proposed on best judgment basis by adding the sales turnover with respect to the alleged unaccounted purchases along with an addition of 5% gross profit and equal amount towards probable omission and suppression, and to impose tax on the additional turnover estimated. 4. The assessee objected to the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turnover was calculated by adding 5% profit margin to the purchase value, was not at all correct. The Appellate Authority placed reliance on the decisions of this Court in KMP Timbers and Saw Mills v. Commissioner Tax Inspector and another [(2012) 50 VST 195 (KER] and Classic Members v. State of Kerala [16 KTR 397]. Reliance was also placed on a Circular of the Government to the extent that assessment on undervaluation should be based on material evidence gathered on enquiry and that no such assessment shall be made only on the basis of the floor rate fixed. However, the first appellate authority found that the goods sold at the subsidized price were locally purchased and that the assessee had claimed credit to input tax based on the purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the public to keep the prices at a reasonable level and at the same time to ensure a reasonable return of investments to the units. It is not a consideration for the sale effected by them and therefore it is not related to any particular transaction of sale. Hence, it was held that the amount of subsidy could not constitute turn over and is not sustainable under the KGST Act. 10. With respect to the damaged goods which was left under unsaleable conditions, the Tribunal found that no input tax credit can be allowed. The challenge against levy of interest was also declined by the Tribunal. 11. In the present revision petition, the Revenue is challenging the findings of the Tribunal to the extent it said that, the limit of input tax credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsidized price' contained in the second proviso to Section 11(3) can only be construed as a sale in which the Government have provided subsidy to support the price, cannot be accepted as a correct interpretation. We are of the considered opinion that the term 'subsidized price' used in the 2nd proviso to Section 11(3) will carry within it any sale made by the dealer at a subsidized price below the purchase value of such goods. Therefore, we are of the opinion that the assessee in the case is not entitled to claim input tax credit over and above the output tax returned with respect to the goods sold at the reduced price. The question raised in this regard is answered in favour of the revenue and against the assessee. 14. Henc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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