Karnataka High Court
M/S Bell Ceramics Ltd vs Deputy Commissioner on 22 April, 2010
Bench: K.L.Manjunath, B.V.Nagarathna
DEP.UT\z CQi\/EANIISSIONER
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED "I'H}S'l'1»II%Z 22% DAY OF APREL, 2010 V
PRESENT
THE HONBLE MR. JUSTICE K.L:AA»MANJIJ'NAf'r1
AND , . _ . 4
THE HONBLE MRS. JUSTEC-E€__ B.VV."P§AGARPL'I'fi'f=~F,Av. "
S."1'.R.P No.1 OF»2g_)g '
BETWEEN: . x
M /S BELL CERAMICSLTD
CHOKKAHALL1 VTLLAGB
HOSAKOTE TALU}_{i 1. 3 ''
BANGALORE RU,RALT._D1Sf:_R':cfF.T_ " ..
REP BY ITS SR MAN:AG_ER';" FI1\E;'X;'JC
SHR1 RAJESHT«Q_NiASKE;R1, ' ' ~
AGED ABOUT 40'YEARS':_ _ .
S/O. SR1 GANG--TADHARj~-.,AL'A ' - PETITEONER
[BY SR1. G RAB'iNA'FTH}XN IVT:' F_§»{iRUMAL£+2SI~1, ADVOCATE)
OF' IAL .TA§<ES [TRANSITION -3)
BANGALLORE «[Z_r1\[1S;1'ON
' '~-BANGAL'ORE_ . - - A RESPONDENT
-- ~ ,. [317 ., SR1 .VEDH.A MURTHY, AGA]
' .TH'1«S STRP 1S FILED U/S 23 {1} OF KARNATAKA SALES TAX
ACT"AGA1NST THE JUDGMENT AND ORDER DATED: 22.7.2008
W~1:>ASSED 1N STANO. 509/2007 ON THE FILE OF THE KARNATAKA
' A;>B1?,LLAT'E TRIBUNAL. BANGALORE. DISMISSENG THE APPEAL.
9/.-
THlS STRP COMING ON FOR FINAL HEARING THIS DAY,
NAGARATHNA J, MADE THE FOLLOVVING:
ORDER
The Assessee has filed this revision V' challenging the order dated 22.07,2(")"O'8<. pass_eldtV'l:~'i_nl: it No.509/ 2007 by the Karnataka Appellat'e_ . by raising the following substa11tial"'qtiestions ll S 1] Whether the having held that the petitioner concessional rate of eaxgitgit 4&1;/g/0 of CST Acts 1956; Vtfiie';i1_gg:sa1g;~:._g t~.uvr'r"iov_er__ of Rs.25,e2,535 for Whiieh""C3l'F'o;;rn 11a've'i:\een_ obtained and furnished'? ii} was right in upholding the o1'd'er_ii .: Joint Commissioner of [Appeals}, Bangalore in CST AP V N.oiO'6/O7~"O8'"and the assessment order passed by iéiomniissioner . of Commercial Taxes [;l'i'a'i;--siA'i%=hilon-3), Bangalore levying tax on the sales turn»over of Rs.25,e2,535' at 15%?
facts leading to the filing of this appeal are that '"l'jr.the' petitioner is a company incorporated under the Act, 1956 and a dealer registered under the 3/-
1.;
Karnataka Sales '"l'ax Act, 1956 and the Central Sales "I'ax"Act. 1956. engaged in the manufacture and sale of Ceran1iC.._W_a1l and Floor Tiles and the said products are sold by tvaiy . state sales as well as export sales a.11e;l~'l'ocia1ly' [)l"t11_lfi»ng._ V _ the relevant assessment period 2002-03.*thé certain ceramic tiles to a registered--._d'e.aler at__'l'i1ft1p.at'i.narnjely. "
M/s Keerti tiles at a co11Cۤsioi*i'2il tax"-Asubject to furnishing C Forms as provided 8(1) r/W Section 8{3) of the.~CElf.ll:yj'Act:.A__Alll the said C Forms and ttrrri-ovei' supported by C Forms has to be latgconcfelssionyal ratemof 4%.
3. T he A{1--tVho1'ity however granted the concessional rate for the turnover up to 30.06.2002 at 42%-__V_vtl:3e--.subsequent period levied full tax at 15% by holdih'g:l".'--t.ha't'llll.thcf;'buyer had cancelled its certificate of l'lle.._'1'egi.strati'on effect from 01.07.2002 and therefore C ilssued by it to the petitioner for the period subsequent were invalid and accordingly completed the if asselssnteiit order dated 30.01.2006.
/.
4. Being agg1'ieved by the said order, the petitioner preferred an appeal before the Joint Commissionei~«._,2_2of Commercial Taxes {Appeals}. Bangalore, which \.v_a's hAc:')'w.e"»rei*----_g'~« dismissed, against which an appea1i.:wa.s_fiE'ed vibe}'orVe.'_'_the'._V V Appellate Tribunal. The Appeilate T1'ib.i:11j1ai'_A_b3'2} its 22.07 .2008 upheld the orders 2' 2 Authority by dismissing t11ev.appeai" 'the.ggpetitionerij Being aggrieved by the said order, 'petition__has_=bee11 filed.
5. We for the petitioner and the 1earn_e_d the respondent State and perusedthe n-1at.etfia1' o_n'r_e'eo1'd'.
6. t is contended on 'behalf of the petitioner that the coneessi'ona}="i-ateof taxwis subject to furnishing of C Forrns, wliieh niadx tofbge vobtiained by the petitioner from the Various }jersons"'who"are' registered dealers in other States to whom 'the are sold and on furnishing of the said C Forms, cor:ct"e.sVs1or1aE 1'ate of tax at 40/0 is levied instead of 15%. That ' irirespect, of goods sold to NUS Keerti Tiles for the period prior % to 01.07.2002 and subsequent. to the said period C Forms had been furnished by the registered dealer at 'l'irupati_.; were produced before the Assessing Authority i.;1*. tirder"
claim the concessional rate of tax but .t;he._said auth[ority._l_d.Vid',_V V not accept the said C Forms as valid aIs.Vth..e "regisi_e1=ed at Tirupati had cancelled its reg-i._:stratiori vwithl'-.¢ffeet'''i"rom 0' 0 01.07.2002. He submits if theuposition. then C Forms had to be dealer at Tirupati and the,» penalised for producing C by the registered dealer at goods which were purchased if really the said dealer had cancelled the said date. Therefore he all the authorities as well as the set. aside and penalty levied on the lAssessee:~..l1as' to be dropped and the eoiieessional rate of tax be appllied in the iristaiit case.
6
7. Per contra, the learned Government Pleader while supporting the orders passed by the "I"ribuna1 and authorities has stated that when once the deale1*_.at . had ceased to exist with effect from 1.;'F';2002.}; could nothave been issued by it and.Vthe"Assessee could not have relied on the forrns tori-.jca1culating 0' concessional rate of tax. He.tl1e1*e.i'o'i'e:_$t1b:i1it:s tliat the order impugned does not call for any .interfei'en.ce-- this petition.
8. Ha\rir1é§_h_:elai:.¥:dl" sides and on perusal of that the petitioner had sold gc-iods jdealez' at Tirupati for the period prior as subsequent to the said period cotniiig assessment. period 2002-03 and 'r.e:spelct.eftl'i:1'1e said sales made, if the dealer at Tirupati had issAt1'etltl?o_1'ii;1Vs and based on that concessional rate of wasllclpaivifriedl by the petitioner without knowing as to c.'~Wheit.hxe1'*xthc deaier at Tirupati has ceased to exist from then it cannot be held that the C Forms issued dealer at Tirupati were invalid. It is not for the y.
Assessee to actually find out as to whether the registered dealer was in existence as on the date when the sal(:s._lw_ei=e effected when in fact, the registered dealer vgflio purchaser has issued C Forms to the .01S'S€S'S€i:'. vli""e;?e:--1lVly_'_the_ V registered dealer to whom the sale hasabelend'niadelhad to exist from 01.07.2002, thei1'--v.V0:lpiitb aceo.r_da.ne'e "the provisions of law. the saidFormsztiouldltiot haye~--.been made use by the purchaser' and the Petitioner Assessee. If at all committed by the purchaser petitioner Assessee cannot be was the duty of the Purchaser to:pet.itio11er about its ceasing to be in exi.st.ence'u" t'3L._#1'Ci~..1:1'1éreV153./'V not issuing C Forms. The utilizelddythlel C Forms issued by the registered dealerlwholupurchasei* based on the fact that the said "'Vpurchas'e_r in existence and has validly issued the forinsp...Therefore the aut',horities could not have been '--thatithe petitioner had utilized the invalid C Forms in T order---to claim concessional rate of tax. /
9. Moreover, in the absence of there being any proof that the purchasing dealer had ceased to exist on and that. the said fact was within the knowietige petitioner herein in the absence of su.r:,h eire1,émsVtariees.._'the:_ V authorities had to levy tax on the concessional ;fate of the basis of the C Forms relied' and " V further the p1'oeeeding._§,s initiatied,w'ith:'~1*e'g.ard to"th»e4 levy of penalty is also not in aec:o'i'danc:e ufith "
10. For the ..a3fore;sha_id~vteansorisy the ovfders passed in the instant case are setpVasi;1_eV an"d_the petition is allowed. Sd/-
IUDGE Sd/-
JUDGE "E:;vhr'* A. T