Karnataka High Court
The State Of Karnataka vs M/S.K Bond Polymers Pvt Ltd on 2 March, 2012
Bench: N.Kumar, Ravi Malimath
IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 2"' DAY OF MARCH 2012;'"§ff'<--«T_:"EE_ PRESENT THE HON'BLE MRJUSTICE.N4.KUMAVR'*E.-VIVA' THE HON'BLE MR.JusT__1"c..E RAVI VMAI,IE'T-4A"TI_H"EVV sTRp.No.92_c5}=.2o»o9 A A BETWEEN: A E A The State of Karnataka," . A By the CommissiQ.rTfer ofComTnercia--!f'Taxes, Vanijya The.r.ig'e'Ka'aTy_a|*aya_, Gandhinagar, . Bangalor_e_,W _ " ...PETITIONER (By sn&A1;.s.tsuja't'ha,._V:As}A):f*A--T. A AND: M/s;»i<?.,BoOhd Po|y"me,r_S__.P'~vt. Ltd., A "'And"raha=l'tI'i Main Road, N9}147,._NarTdakerappa ' I nd._ust'ITa'I"«~EState; Bangalore ';j;5€.5'O 091. ...RESPONDENT
Q (By E..R..ITTdrakumar, Sr.Counse| for Sri E.I.Sanmathi, "A§lvocates) ****>k V This STRP filed under section 65 of KVAT Act, against the judgment and order dated 19.02.2009 passed, in STA.No.910/2009 on the file of the Karnataka Ai?.D'e,|la_te Tribunal, Bangalore, allowing the appeal fi.!eG»..'us-.n1de"r,. Karnataka Valued Added Tax Act. " *' ' This STRP coming on for__hea-ri'ng'~.::'_thi's:tday, 2' N.KUMAR 3., made the following:-:: A' The revenue has prefe'i'«red. this 'app'ea.l the order passed by.th~e_ Tri'bu'ng'a-lliégsetting aside'"the order passed by the first directed the Assessing A.'u'th£.o,r~ity revised demand notice/refundg-ordlerfi .
-_ ' The3-sjs'es's'ee'~p_urchased certain chemicals from M/s.Morex,__Petr0' Bangalore during June 2005, Julyfigzoos, December 2005 and February 2006 under :d«i.f'f:Vere'n~At_i--nVy0,ices. The supplier of the aforesaid chemicals ,,cVl'§.3i,med:*_4_».°/o'~03/ailue added tax. The assessee has paid the sa.rne."---V:'Subsequently, the said supplier ascertained that "the said commodity is taxable at the general/residuary of 12.5%. Accordingly, he raised a debit note No.8 1'/, dated 31.07.2006 demanding the tax difference on the aforesaid supplies to an extent of Rs.1,40,2_28_/}'_:b_'on Rs.16,49,744/--. On receipt of the above assessee sought a clarification from the l_-.'\"/O"
letter dated 18.08.2006 enquiring assessee can claim Rs.1,40,228/- in VAT returns.__fhe_reV,was.'norespvoinse. On the advice of a tax consultailit.Vit'l;2'e""aVsseSsee paid the said tax. Thereafter, rebate of Rs.1,40,22:g/L... December 2006.
During. of the assessee, reassessmentviiordeirwasifpassled, where a claim for input tax rebateéto of Rs.1,40,228/' has been disafillowed. mcoinseqiuently, a tax of Rs.98,927/-- was impos_ed,iniatldition to Rs.16,076/-- and Rs.9,893/-- towards ~pVengalt'y.:a'_"_v»A 'd'e'mand notice dated 25.03.2008 came to be issued";V:A.Ti1"e assessee challenged the said judgment before "the_.firVs't Appellate Authority. The first Appellate Authority
-- that the assessee should have claimed the said rebate {[8 in the tax return for the tax period July 2006 when it received the aforesaid debit note from the _;s.up.__pgI'i.er concerned and the refund claimed in the VAT of? . December 2006 is not admissible._ Accordi_-n'g'I'y'~,.::the"~appeal " it came to be dismissed. rAggrieved;'_"'by assessee preferred an appealV_t'o~.,theVii=ibunal;'V:V'T~he...frib3unal held that the law requires or"~fi\,t.V:'c_,:e:paAr;Eite order for each tax period. A v:gf:.i'.d'oi,'I'?og"so, the Assessing Authority has ha-rped to deny the entire the assessee in debit note. In? the impugned'rea'ssessm'e'nt'-~--or'der, the input taxes paid in excessllofmtliel been carried forward from to monthly If the input tax rebate were to have » been alrlowed, in accordance with the law by the Assessing tax period July 2006, there would have been eilccess of a tax of Rs.1,36,837/- for that month i'wh4_i'chV"'could have been set off against the liability for the '"'~:t'a>{: due for December 2006 as a result of which, there l/A would not have been any liability to any balance of net tax for the tax period December 2006 and as a conseque,nc.e thereof, there would be no justification for the'l.<%,fvy' _ penalty or interest in this case at all.MmIn the"orde~r sett oui,_:u the true position of the tax liab:i=l,jty l.ta'x"per_io€;_fé December 2006 if the input tax..__rebate_ on of the aforementioned debit note to haveffibeenlvyfgallowed in the appropriate tax F,rorri~-..t'hfe"table is set out, it is seen that the excess tax of it in respect of the tax period Tvlffgefrefore, the impugned levy of<_:Vtax,_A respect of December 2006 was.._set byfthe said order, the revenue is in Vappeai.
-._learned Government Advocate assailing th'e.i'mpugnVed.order contends that when the debit note was I_raised ..o"n.;3.»v14.O7.2OO6, the assessee should have claimed A 'frefufria-d of input tax during the said period only. However, ' itgis claimed in December 2006. Therefore, the assessee ll/ was not entitled to the refund of input tax and the order passed by the Appellate Tribunal is erroneous.
4. Per contra, the learned Counsel M assessee submitted that Section 3O'('3V)"on'_w'hic_.hfrefliawnce;is; V Dlaced makes it obligatory to DaYfA:'the_'--_lta:>< debit note during the period claimed..ya:ijdR'**it'V"h'as no 0 reference to claim refund of,.t'a'x..".on'"th.e gro'u'nd~7§that the assessee has paid the he submits that the Tribu,nal the impugned order. 0 0 if _ 'a.re~.,__n0t_'in dispute. The assessee l paid 4% tax. "the supplier in the month of Jun»e;,"July an'd.__VDece'mb.er of 2005 and February 2006. V:"v'V.hVen flacytual tax payable was 12.5%, the supplier A"'r.a'i5s'__ed 'aV':de:bit.l"Vvi2ote on 31.07.2006. It is also not in dispute that prornpt'ly the assessee has paid the difference in tax, i....e.__, he-'paid the difference of tax in July 2006. It is also 0 dispute that the supplier who received the same has l/ remitted the same to the department in July Therefore, the assessee was entitled to claim _s;"efu.n'd.'__:of,__A4 input tax in July 2006. However, he has'_pLit_:':fortA--h: t_heh"'l claim six months, thereafter. As rigI:htly:_poi;nted':out'by'-.t_he__i' Tribunal, if he had put forth the clai"m_'in V amount due to the assesseelvlviby' waylfl Twas Rs.1,36,837/-. Because invllbevcember 2006, the amount du_e_:"A.tVoi.."_:him~'~#.isl.I',_'::.P;s.1,O4,375/--. Sub-Section 3 of with when the Davment of not deal with the claim the tax is paid under the Act, to the benefit of input tax.
Eitherg.!°.6' gma$7're:vtain7'thé difference of the amount collected V. and a--p:pro"pri'ate it aénldmifv he has paid the money and he can for refund. The delay in putting forth thec.l,aim,-forgtefund does not in any way effect his right to 3"~'««.__V'<:»laim thepsaid amount, which is legitimately due to him g.'u.n'de_r_u.-Act nor it amounts to contravention and resulting in .';lia_bility to pay tax, interest and penalty as sought to be l/ levied by the Assessing Authority. The entire approaCh"'»of the Assessing Authority and the first Appellate contrary to law and runs counter to the spi_r.i.t,'V_'o'f.xthe' Act; The Tribunal was justified in interfering:w'ith't;heAsa:id--,o,rder_pi' and allowing refund of input tax to the"'assesse-he.to:wh'iehl T he is legitimately entitled to und'"er.:_xthe t'hat':§view of the matter, we do nQ':t'~.y1,5ee.'_'AVany" :njie_r'it_ in this appeal. Accordingly, it is dismissed_.V'l' if Q Prs* A