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2023 (7) TMI 385 - HC - VAT and Sales TaxTaxability - Maize Flakes, Malted Barley, Malt conversion and Malt extract are taxable under KTEG Act or not - imposition of interest and penalty for the period prior to the decision in United Breweries 2015 (9) TMI 1516 - KARNATAKA HIGH COURT - HELD THAT - Admittedly, the decision in United Breweries is rendered on September 14, 2015. Hence, Maize Flakes, Malted Barley, Malt conversion and Malt extract became taxable pursuant to the decision in United Breweries. Assessee was paying tax on hops pallets prior to the said decision. In Jayce Trading Corporation 2021 (3) TMI 956 - KARNATAKA HIGH COURT , the assessee therein had paid taxes for period between 03.03.2010 and 31.03.2011 prior to the date on which the Commissioner had clarified the issue on 07.07.2014. In the case on hand, the basis to impose tax is the decision in United Breweries which has been rendered on 15.09.2015. Therefore, imposition of tax prior to the decision in United Breweries is not sustainable. For the same reason, interest and penalty are also not sustainable. The aspect of fit for consumption has been considered by this Court in United Breweries. Therefore, this contention is untenable and accordingly, rejected. Revision petition allowed.
Issues involved:
The judgment addresses the following issues: 1. Whether the Impugned Order upholding the assessment orders under Section 5(4) of the KTEG Act for F.Y. 2011-12 is lawful. 2. Whether the Impugned Order correctly upheld the non-speaking Tribunal Order confirming tax levy on Hops pellets and incorrect turnover calculation of entry tax on maize flakes for F.Y. 2011-12. 3. Whether the Impugned Order erroneously confirmed interest levy for F.Y. 2011-12 despite no 'default' in tax payment as per Section 7(2) of the KTEG Act. 4. Whether the Impugned Order incorrectly confirmed penalty levy for F.Y. 2011-12 under Section 7(3) of the KTEG Act. Issue 1: Assessment Order Validity The Revision Petitions challenge the assessment orders under Section 5(4) of the KTEG Act for F.Y. 2011-12, questioning their legality. Issue 2: Tax Levy and Turnover Calculation The Petitioner contests the correctness of the Tribunal Order confirming tax on Hops pellets and erroneous turnover calculation of entry tax on maize flakes for F.Y. 2011-12. Issue 3: Interest Levy The Petitioner questions the Impugned Order's imposition of interest for F.Y. 2011-12, arguing no 'default' in tax payment as mandated by Section 7(2) of the KTEG Act. Issue 4: Penalty Levy The Petitioner challenges the Impugned Order's penalty levy for F.Y. 2011-12 under Section 7(3) of the KTEG Act. The judgment revolves around the case of M/s. Anheuser Busch Inbev India Ltd., engaged in beer manufacturing, challenging tax imposition on barley/malt, maize flakes, and hops pellets under the KTEG Act. The Petitioner argued that the tax imposition was based on a previous judgment not applicable to their case and that they had paid the required Entry Tax. The Revenue, however, justified the tax imposition citing non-payment of Entry Tax as goods entered the local area. The Court analyzed the contentions and records, ultimately ruling in favor of the Petitioner. The Court considered whether Maize Flakes, Malted Barley, Malt conversion, and Malt extract were taxable under the KTEG Act and if interest and penalty could be imposed pre-decision in United Breweries. The decision in United Breweries rendered these goods taxable post-September 14, 2015. The Court held that imposing tax, interest, and penalty pre-decision was unsustainable, citing precedents like Jayce Trading Corporation. In conclusion, the Revision Petitions were allowed, setting aside the tax, interest, and penalty imposed under the KTEG Act for the period before September 14, 2015. The judgment emphasizes the importance of legal precedents and the timing of tax liabilities based on court decisions.
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