Karnataka High Court
State Of Karnataka Represented By vs M/S. Tummy Tuck on 12 November, 2021
Author: S.Sujatha
Bench: S.Sujatha
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 12TH DAY OF NOVEMBER, 2021
PRESENT
THE HON'BLE MRS.JUSTICE S.SUJATHA
AND
THE HON'BLE MR. JUSTICE S.RACHAIAH
S.T.R.P.No.28/2019
BETWEEN :
STATE OF KARNATAKA
REP BY THE COMMISSIONER
OF COMMERCIAL TAXES,
VANIJYA THERIGE KARYALAYA,
P.KALINGARAO ROAD,
1ST MAIN ROAD, GANDHINAGAR,
BENGALURU-560 001. ...PETITIONER
(BY SRI JEEVAN J. NEERALGI, AGA.)
AND :
M/s TUMMY TUCK
NO.5, 24TH MAIN ROAD,
J.P.NAGAR, 6TH PHASE,
BENGALURU-560 011. ...RESPONDENT
(BY SRI RAJESH CHANDERKUMAR ROHRA, ADV. FOR
M/s CHANDERKUMAR ASSOCIATES.)
THIS STRP FILED UNDER SECTION 65(1) OF THE
KARNATAKA VALUE ADDED TAX ACT, 2003 AGAINST THE
JUDGMENT DATED 07.08.2018 PASSED IN STA NO.683 AND
684/2017 ON THE FILE OF THE KARNATAKA APPELLATE
TRIBUNAL AT BENGALURU, ALLOWING THE APPEALS AND
SETTING ASIDE THE ORDER DATED 30.10.2017 PASSED IN
VAT.AP.84 TO 86/2015-2016 AND VAT.AP 87 TO 98 2015-2016
-2-
(A.Y.2012-2013) ON THE FILE OF THE JOINT COMMISSIONER
OF COMMERCIAL TAXEX, (APPEALS-3) BENGALURU,
DISMISSING THE APPEAL AND UPHOLDING THE ORDER DATED
09.02.2015 AND 19.03.2015 PASSED BY ASSISTANT
COMMISSIONER OF COMMERCIAL TAXES AUDIT AND
RECOVERY SHANTHINAGAR, BANGALORE, FOR
REASSESSMENT YEARS 2012-2013 AND 2013-2014.
THIS PETITION COMING ON FOR ADMISSION, THIS DAY,
S. SUJATHA, J., MADE THE FOLLOWING:
ORDER
This revision petition is filed by the Revenue under Section 65(1) of the Karnataka Value Added Tax Act, 2003 ('KVAT Act' for short) challenging the order dated 07.08.2018 passed in STA Nos.683 and 684/2017 by the Karnataka Appellate Tribunal ('Tribunal' for short) whereby the appeals filed by the respondent - assessee have been allowed.
2. In this petition, the petitioner - Revenue has raised the following questions of law:-
1) Whether the Tribunal was right in holding that the respondent is eligible to pay tax by way of composition under Section 15 of the KVAT Act despite admittedly purchasing goods from outside the State -3- of Karnataka, which is clearly contrary to the mandatory requirement of Section 15 of the KVAT Act?
2) Whether the Tribunal is right in holding that the prohibition of purchasing goods from outside State of Karnataka under Section 15 of the KVAT Act does not apply to capital goods?
3. The respondent herein is a sole proprietorship concern running a restaurant engaged in the sale of food items and is also a franchisee of 'Subway', an international chain of restaurants. The respondent is registered as a composition dealer under Section 15(1) of the KVAT Act. Accordingly, during the tax periods under consideration namely April, 2012 to March, 2013 and April, 2013 to March, 2014, the respondent was paying tax at the composition rate of 4% on the sales effected by him. The case of the respondent was taken for audit verification and it was noticed that the respondent had purchased furniture -4- and kitchen equipments on 07.12.2012 and 18.01.2013 on an inter-state basis and accordingly proceedings were initiated alleging violation of the conditions of the composition scheme under Section 15(1) of the KVAT Act and the same was resulted in the order of the Assessing Authority, against which an appeal under Section 62 of the KVAT Act was preferred before the First Appellate Authority by the assessee unsuccessfully. Thereafter, the respondent - assessee preferred second appeals before the Tribunal which came to be allowed placing reliance on the cognate bench judgment of this Court in Sri. Anatha Padmanabha Bhat vs. Commissioner of Commercial Taxes reported in (2016) 71 taxmann.com 77 (Karnataka). Being aggrieved, the State has preferred this petition.
4. Learned AGA appearing for the petitioner/Revenue submitted that the Tribunal mainly -5- placing reliance on the decision of this Court has allowed the appeals filed by the respondent - assessee. Against judgment relied upon by the Tribunal, the Revenue has preferred the appeal before the Hon'ble Apex Court and the matter is pending consideration in SLP No.14920/2020. Thus, the learned AGA fairly submitted that the matter could be disposed of, subject to the result of the SLP No.14920/2020 pending before the Hon'ble Apex Court.
5. Learned counsel for the respondent - assessee has no objection for the same.
6. In view of the aforesaid, the revision petition stands disposed of in terms of the cognate bench decision of this Court in Sri. Anatha Padmanabha Bhat, supra, answering the questions of law in favour of the assessee and against the Revenue subject to the result of the SLP No.14920/2020 pending before the Hon'ble Apex Court. It is needless to observe that the -6- Assessing Officer is at liberty to pass consequential orders upon final verdict of the Hon'ble Apex Court in the pending SLP No.14920/2020.
SD/-
JUDGE SD/-
JUDGE PMR