2024 (4) TMI 333 - HC - VAT and Sales Tax

Reversal of Input Tax Credit - genuine transactions or not - deregistered firm or not - validity of assessment order. Transactions not genuine - HELD THAT - It is recorded that assessee, M/s. Chimco had declared purchase of coffee seeds from M/s.SLN Coffee Pvt. Ltd., and an output tax of Rs. 78,86,156/- has been paid. The assessment has been made by the Additional Commissioner of Commercial Taxes. The document speaks for itself that so far as petitioner was concerned, the tax amount was paid. M/s. Chimco was deregistered - HELD THAT - The document (Annexure-M) filed by the assessee shows that deregistration has been approved on 16.07.2011 and the effective date of deregistration mentioned therein is from 01.06.2006. The assessment year is 2009-10. As on that date, the said firm was not deregistered and it is only on 16.07.2011, deregistration has been retrospectively made. Assessment order - M/s. Chimco does not exist - HELD THAT - The assessment order and deregistration order clearly show that said private limited company was registered with Commercial Tax Department and the assessment has been made by an officer of the rank of Commercial Tax Officer. Once movement of goods is accepted and in the assessment order of M/s. Chimco, the Assessing Officer has noted payment of output tax in a sum of Rs. 78,86,156/-, the contentions urged on behalf of the Revenue are untenable and liable to be rejected. The order passed by the full Bench of the Karnataka Appellate Tribunal, Bengaluru, is set-aside - revision petition is allowed.

Summary

Issues involved:
The issue involves the reversal of input tax credit by the full Bench of the Tribunal in a case where a sum of Rs. 69,15,450/- was not remitted by a company, leading to questions about the genuineness of the transaction and the existence of the company.

Details of the Judgment:

1. Reversal of Input Tax Credit:
The full Bench of the Tribunal reversed the input tax credit of Rs. 69,15,450/- due to lack of material or documents proving the genuineness of the sale transaction between the dealer and the appellant.

2. Genuineness of Transaction:
The petitioner and M/s. Chimco, both registered dealers, were involved in a transaction where the petitioner purchased coffee seeds. The petitioner paid an output tax of Rs. 78,86,156/- as per the Assessment Order passed under relevant sections of the KVAT Act, 2003.

3. Arguments and Submissions:
The petitioner's advocate argued that there was no doubt regarding the movement of goods, supported by the assessment order which confirmed the purchase of coffee seeds and the payment of output tax. On the other hand, the respondent argued that the transaction was not genuine, citing the deregistration of M/s. Chimco and its doubtful existence.

4. Tribunal's Findings:
The Tribunal noted the movement of goods and the payment of output tax as per the assessment order. The contentions raised by the Revenue were deemed untenable, leading to the reversal of the Tribunal's order and a ruling in favor of the Assessee.

5. Conclusion:
The High Court allowed the Revision Petition, set aside the order of the full Bench of the Karnataka Appellate Tribunal, and answered the question of law in favor of the Assessee and against the Revenue. No costs were awarded in this matter.