9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2011 (9) TMI 513 - HC - VAT and Sales TaxInput Credit on Stock Transfer - Assessee engaged in local as well as inter state purchases of LPG - Stock transferred assessees own depots outside Karnataka - Additional Commissioner restrict input deduction at 4% on stock transfers out of local purchases from HPCL - Held That - Assessee maintained the records recording all transactions separately. No one has found fault with the records or the manner in which the records are maintained. When once the records are maintained is in accordance with law, its claim on the basis of the entries made in the records which is also in conformity with the circular issued by the Commissioner of Commercial Taxes, the benefit as claimed by the assessee cannot be denied. Further when case is decided on merit no cause for remanding the matter and setting aside the finding recorded by the Appellate Authority.
Issues Involved:
1. Validity of the Additional Commissioner of Commercial Taxes' order invoking revisional power under Section 64(1) of the Karnataka Value Added Tax Act, 2003 (KVAT Act). 2. Eligibility of the assessee to claim input tax credit on local purchases of Liquefied Petroleum Gas (LPG) corresponding to stock transfers outside Karnataka. 3. Applicability of Section 17 of the KVAT Act and Rule 131 of the KVAT Rules, 2005. 4. Adequacy of records maintained by the assessee to establish one-to-one correlation between purchase and stock transfer of LPG. 5. Justification for remanding the matter back to the Appellate Commissioner or Original Authority for fresh consideration. Issue-wise Detailed Analysis: 1. Validity of the Additional Commissioner of Commercial Taxes' Order: The assessee challenged the order passed by the Additional Commissioner of Commercial Taxes, who invoked his revisional power under Section 64(1) of the KVAT Act, setting aside the order of the Joint Commissioner of Commercial Taxes (Appeals). The court noted that the Additional Commissioner acted on the grounds that the Joint Commissioner's order was erroneous and prejudicial to the interest of the revenue. However, it was determined that the Revisional Authority's interference was not justified as it did not satisfy the statutory requirements for such action. 2. Eligibility to Claim Input Tax Credit: The assessee, a public sector undertaking engaged in refining crude oil and marketing petroleum products, claimed input tax credit on local purchases of LPG from Hindustan Petroleum Corporation Limited (HPCL). The Joint Commissioner found a one-to-one correlation between the purchase of LPG from HPCL and the stock transfer of the same goods outside Karnataka, thus allowing the input tax credit. This finding was based on the examination of purchase bills, stock transfer memos, and other relevant documents. 3. Applicability of Section 17 and Rule 131: The Deputy Commissioner initially restricted the input tax credit under Section 17 of the KVAT Act read with Rule 131 of the KVAT Rules, 2005. However, the Joint Commissioner concluded that these provisions were not applicable as the assessee maintained separate accounts for different transactions and established a clear linkage between local purchases and stock transfers. The court upheld this view, stating that the records maintained by the assessee were in accordance with the law and the circular issued by the Commissioner of Commercial Taxes. 4. Adequacy of Records Maintained: The court emphasized that the assessee maintained separate books of accounts and provided sufficient documentation to establish a one-to-one correlation between the purchase of LPG from HPCL and its stock transfer outside Karnataka. The Appellate Authority's findings were based on a thorough examination of these records, including purchase bills, stock transfer memos, and hire charges paid to transporters. The Revisional Authority's failure to consider these records adequately rendered its order unsustainable. 5. Justification for Remanding the Matter: The court found no reason to remand the matter back to the Appellate Commissioner or Original Authority. The Appellate Authority had already examined all relevant documents and recorded a categorical finding of fact. The court held that the order passed by the Revisional Authority was illegal and contrary to law, thus setting it aside and restoring the order of the Appellate Commissioner. ORDER: a. The Appeal is allowed. b. The impugned order passed by the Additional Commissioner is hereby set aside. c. The order passed by the Appellate Commissioner is restored. No costs.
|
