Karnataka High Court
M/S Microqual Techno Pvt Ltd vs The Addl Commissioner Of Commercial ... on 6 August, 2010
Bench: N.Kumar, B.V.Nagarathna
1 am 112919 IN THE HIGH scum 0? V amen 'r:-us THE 05*" DAY os Aufitifif 2'o4?'%%& %f% - 7 mamtX_ _L THE HON'BLE m.Jum:cé$amMm * ~ 1 Am; _ V THE HON'BLE N1is.lu§er'oquat'=Te'¢.=ht:c:s Fa'§§ats» Lirréteg. at 6-29I1-B, A:ra'ut31na§i:f_Nh1in»_Rm'6; Harinamr Cross. KonanaKuntg,'«... Bangalore sac 082.» _ _ " ' ' ...AppeIIant ..... am} The Ad&tEma!..'Cm§missimer cf V «T%%AC¢rv%mewia! %%Taxas.
. _'Zaiie.: --4,,\__lanij5«a Taige Karyalaya,
5._3'«'.'. I-'-'M':_v»."'!t.',_ Gancfixinagar, Banga"icr'u;."' mflespcndent % % Kvodarmnhy, Him Cour! eovemment Framer) W 2 am u2m_u__ This Sam Tax mass! is man under Sewer: 6.§('i'},9f.ft.ha' ' _ Kamttaka Valued Added Tax Act, against the arm» ' zsmzma passed in ZAC--1IBCD--1:&ARv-4BIO9--1U_cn' thefile 7 of the Additional Carnrrfimiona cf Ca1ntei!:iai;'_'Taxas;..Z£aa1e '---1 _ '-7 Bangalore, ocnfirming the natiw at revi$ic:'n., rewa's'i,ng" the': "
penaity irtcicated in para --» 6 cf the ndiae. of re'vi§c:.n_ and asida the appeal oniars and aeeor&n9|§r..;}£mclufifiag the -Zreviésion proceedings" " « This sm naming on :qa¢n:m¢ _N.KUMAF?, J., Mivered the fdkmring:- " . V ' ._ This ehafienging the order passa<:b§a1éL%Ro§}isi:mj2 has rwersed the tinting Authority unaar section 72$; qthék wu. MGM Tax, 2993 a m}essee is a reistered dealer under the Tax. 2003 (#2 short, hareinafiar . . j{.:ef_&rr ed to'1as,f*%1(\ I}\T Act'). He is a manufacturer and deaia' in Ccmpanmw and Tetemtn Cumponents, The kkjpiafga as his wsinass was vssrtoa by tn: Awstant Cfiramsamer of Convmrdal Taxes on 24"' and 27"' of .Soptamber29D-Bfcririmcficlw cum auaitofbacksenccwnbs.
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3 87% 'IIZIHQ ma miacatim of purchase imam. purchase H ledger, it was noticed that he has ':s;¢a¥ a' -semen emu? 3573* on thvev»in§¢oir:V§a_:\i.'!1.Ech in th"afl ' name of fcttnwing wppliersz MIs.S.L.V.B1terpfi§#§s _~- "I %
-FCJNI-5 "IuIP\uf'h-KN-I By accdtxnfing thé are in me names :3! show fiIp;1ii'€°t$, fin fwd' input rm: mat tmu-om and furnished tn the Depattment in the 2005 and Sap-tmtbar, October, and: of 2696. On cross-verificafim and eahdmm by the nepammm, ravaaled that the were rm: aiming at the admessas five: in the A % & grams and are tumovor and as tax wuactoa in the so cam ma net been «scam to ma mpam-mt and the Stlppliilt had bun "DGrb§it0f0d" for nor:-filing G' mums. fin/..
émound §t:;t;4"'hev_'h§!&;1VA.::against the meme. znraa, all the . . . gI_le4_'gatior1s,T were made in this regard were not by any rmtesial on record. The omrtment dd avaznansa as 310 asussee me so-cam mmnonm by them comers or other adverse matarial an which €hey came to pan the said crcm. Thorefcra, he warms. not 3 sn 1l201_§___ was won wmn an lmowlodgs of mo mm» { that it cwld not be said, the mawial an 1% that the amemee knmxingy promagd 1' therefore, he set aside the portion appellata authority and levied "tbs; the presmt appea! is mg by the ' V ~--
4. mo 5:;-sp¢::afit awning the irrwmod mg,wmm¢. it is acsmmaa that the four 2a the assesses were an regaem mm-§%an¢ paymant by way at ohequ_e which cheque has been duly viiiéifiggd not paid tax and net filed raums that E/.
7 am name only the cards: is opposw to principies or nawra: juwcq.«gI§,$§§§"VVA:- H alse iilegal and the ordar passed by the appeilate _iVjaiV§s M been snterrma with withaut props! justifijt:~§ti<:r's«a_ri;1_ he prays fer allowing cfthe appeal. _ Per contra, the learned .Ad\.?.e::t:'at:e"V the inaxgmd order eantands uiéady aescsom that anar the course at the enquiry. it is the ahoiat fiwe mediator frorn whom an handed over mesa invoices. were asked ta furnish patficutarsfiftfitay tiavq "tioifi§or' amnion nor fumishad any phmzfiiilarfi proowcings, they did not make _ any all the adverse materials and even V".;--TAABvéfc;e fiaé agifiellata authotity, no request was made. ' 56 .39 d33i flEi£3t¥ on the pan of the Dapanment ta mke materials, in the amenoe at any requea by the ' . V M in this ma, the meme did not make any ream:
ins materials bemuss it was won within his kncwledgo.
Thflfifflfa, N8 subrnits U131, R18 {id 3 ffififl @339 CS R031- 3 an 'U26'!_t_2 rensttance of tax but also a cast of % 3 producing tax invoices, whiah was wefl wiifin :':k'l."'i'.fi%'v"I_§€:j.VQ"§.. _v the amemee and therefore, the pana!4y__.inm6s§§ d is does not califoranyintafermce. u
5. In so far as me is conccmw, we haw gong thmgaifijye course at the enquiry, whsn ti32:_E:§ : they set out the aIIegatians,1_%ai_s;§s"§:§$;ai§ :'n§:z: Tto answer. The awmee 73 In he dd not am the oeparamnue whim was warm him; He avaspy of the aufit report' which was th§§Vb§a§$ _fcr flwe preueadings. In the appeal also, ' ».thoe:gh.'a takm in the appaai mean no request « «j'..§§€.a§'made to Department to furnish the mew material.
firs! appafate authaity proceeded tangently X V. appreciating the mtodal an reccrd, what had . A"A*irar ispired bcforo the aswng authority in particuiar, were 'i*mrdin9 tho aliogufions made by an Departrnent, which yv 9 an 1/2915 _ romaimd unanswered in me course or anquiny. % 3 1 V cimumstanaes, the revisionai authafity with the said ordei and an praperVa9_pre4':i'a2ti §1:3 ct!' 'V material on raeord, racarded a tije which the goods were pre¢1c»:é§':$ez.ié. not supplied by the: regifiered by a mower who mad pugs} was assmu and meretforo. pmcea tum ax invoices anato mo penalty. In that was arm ma pm at vmuon of priftveiplesp 'naturgi Eaiaasv no suhmnca. in see far as is magma, section 70(2) or me WAT % T Act 2o.n,¢aa;s said subjea, which reads as under:
_ "?§(2); mm an attachment has been A Q» mid; uador this Part, anypmato transfer at delmty .cf'ihie property attachw or at any Bate:-eat Emmi:
any paymmt to the defauur at any mt, Gnrmnd or other maniac wntrary to sum mchment, shafi be void as aging an elm: artful-enable under the wachmanf. $2 It is net in ésputa that, a sh(ra:--«cauAse' és _j_ an 1:23:33 eontampiated under Section 3(3) of the As: aadj and the amerssae had given his giepiyi quefion is, whether the assesgee has a false tax invoiae to support a which avaiiabia to m undgr. mi» has cloariy set out the of penalty.
They have c:a»arrysnvc~.*c§s ram: by the four wpplicrs quanaty, veins of gem and V11" 3. {Re rV{:1'r23t:Vm . input tax cm: ciatmad by §!i:_L«_' tneawsmea Rsi3,85,'1 From the dates as the invoice, it is tfiais neither oucasima! nor stray cases. It far three months from October 2% to « fha farrmt of tax invoices of these frauduieni aimcst fimilar and omman. The payments mass supplies and purchases on the bafls at ten: .I%"'A'in®icas are aim made by an amass an his cram term, i.e., he has not made the payments Imrrmateay and the payments 11 an $12939 are accumulated as due and mm at ms and at the finaneiaf years at zoaaes and zcmar. The audit authmty in this cmneatim is rg.=.-iéxrazxt '_ K V' imptxtanee, which reads as under: V A' 'I V' 2 'Whereas. {ha cross vufiificatioix S invsstigatirm cenductoql by th.a.v"j;3gpa:_.t:nuht;< tags reamed am the Existing at the adur%s won '33 the EaE1§(¢!§:i§¢:'3an_i!_iHi{;'V:®z¢vIr and use tax k;1_' t"tV1'n I':B:£a ¢a::§a,La»vo:¢é's have not hem hi: A and the aupwfi-:~rs' me for non my a! returns. u"i'?a.:_ftn.aa'V. th'é' has rwaaied that V tug; 'mvgiceé &:xE§h nrwe in the nama of shave firms " A Esisuatfiby sohfifhénaml persons. There a an ' .V."ta¢mpt"%t§-jbvado that tax» by way of iwzing ~. by me bonami persons and by Aae;tm_!r:c.;§ie same names by the purchaamg ¢mar;: Tm mesmarion rm also mraaloé that V. A' 7sagne"1a:papEisrs have mum to have sumac any saw. to the clatter and mmsar stem um smne Miami persons have misused the? nsmas and T31 numbvrs. such Mug can. aims are above aupwms are nut exmsg me purchase kwolces ware found to be flames and found to have ham ._ h.a s $§:p§%i§6~--.§:o now: am: an above invoices ' j umI¢ie%hm; e been mam mm your store we mans.
have not ftlnifixod any ehcumvmts " " I 1) did you know the 'Me@tar"? 33 an ?I2§'.!.'_f_fl was mm! and mvw by provlmg an V if I. 1e my: aftlme.." ~ Mm", on cross.' vgmcittgri', Q: _ reveaiad that the tumaver a::d"i2$:¢T"&IAT c6§e_ct'e:£-11 the above invuim navy not in Department by the abomirfi '$16 haw been "Deragatered" In of flfifig.' mums. on invastim_tir;szi¢ Vt;1ad£1§_b5/[tizau I ma rwaalod ma£%»:ne':%§p'mj_a;pp:im an nafilxisting at the _ 't?':a§ "»!:V!'r¥!e yeu have furnfiézocf the firivoicas and Inward aoeds'%1§caaptsw.§:§¢ two:-ts {shanty as stimfihaat you have purchased throisfivv---a~*isaa¢:iat<:r'_ and the msaatar writ}: ;'o"gVa.rd"to ms folimmg:
2)\M':a£ is tha tame and adam at the 'Med§atc:*"?
3)'m1at is the «intact mtmbcr ofths wemtor'?
V, 14 em tango
4) Dkiyou notcroesvemywhy gaam have suppaea with mom: ngvmg%'%mg-emf-E. "
suppms fer a single commodity? .. _ A swung: are me veme r$i§n1.t_:a's '\a;e!1'Ii:.*e mg; eesivemt am gonna am éagalut Ins £l1§~fffii§ht % charflt? R %
3) What acsazoueaggrngm wen' for WM dmw "Wag? ' 4, _ T)Wl1c§. ««E{kq_ yuu to\uar;$§:.;:ajgyna7r-it a:§dTw!1§t"!s lghnnme ?
3) What acimovdmmmfi the time of Mama over' e!_V¢i:m;ua_s?'._ "
9) What itvjflie.roasié§tf~fqr.h1ak%:g may In the ri§':g1tnV: e!..Hag'cfi3§f!T_cn all above pagrchnws "\"¢.4'_té§__ swam: and 'haw been an xstrfigma was apma mo 6 in 1 months paylnéfit is made an axe manth against doivery of gems 't':aat§3"é't thO§ rnerah of sent. ZIJG6, mm "$5033 ha,Viii"ag'aemantIpurchase crew am:
the mnmoas for delivery of goods and mama paymlnts.15
Further, the quantity of gems purchasw f . 23,329 and the same has bun wh]xtedtn'Qua'!1§§'r " M Awxranca" 'gammy and 'Awro1_r_alf gs V lt3RNa. Such being me me, It sf1>¢u£er4..i:'fe§:éaasaiVi11y~.. ' _ he fnilowad by n 'pur_t:hsse .__ - = V' '8pocifica§uns" and *r«nis& A*»,ga Gq:tfi_i;éfl,§s';*:.._ "'~ an uzasa ma-us. you have ram to man ti}: mmgm oraers and ma the tranmctions tram the d9¢t§_'er' for supmy of gms;tfl!_ the we gfimamg ;;£I:¢tgi§ait's.
suezh ézm or purchase doufinot. .mm:1%:¢%w:a[mraaau- am the input tax er'e'&' purmnse dues not amount :a'LV-\(a:mnpu: fix crew. it has in he Afisegaeds on mica yau have avaflad m not amend by 'Vafid Tax % " .1;-;vga:a:fe¥5ef'.v"aVn.¢ ..the savanna on much ya: ma 'ifailaq tax aw am not panahiing to me 96a§:s7yod".have roceiwd. That mans ta any. tbs .. .. guppfiefis on muse tea: Inveices, you have availed V. W tax cred, are not me mun: auppsers and they m not the awaits of am: goods. Hams, your can of hput tax emu: of Rs.3,w,183.G0 an the above 'Invaad Tax invaimr has to be wnnwed as the VAT couctod in tho abeve invoices has not but: received by tho dopartmuu and you have not