2025 (2) TMI 474 - HC - VAT / Sales Tax

Dismissal of second appeal - Denial of entire input tax credit and special rebate claimed - absence of any separate account for raw materials traceable to products transferred outside the state maintained by the assessee - HELD THAT - It is found that inasmuch as the Tribunal has merely accepted the findings of the First Appellate Authority on facts that were not disputed by the State in the appeals before the Tribunal there is no substantial question of law that arises for consideration in these OT. Revision petitions. The subjective satisfaction arrived at by the First Appellate Authority based on records and data produced before him would suffice to hold that the revenue has not made out a case warranting interference with the impugned order of the Tribunal. Conclusion - The revenue did not establish a case warranting interference with the Tribunal s order leading to the dismissal of the OT. These OT. Revisions are dismissed.

Summary

The High Court of Kerala considered OT. Revision petitions involving a common issue regarding the assessment years 2009-2010, 2010-2011, and 2011-2012 under the Kerala Value Added Tax Act. The respondent, a dealer in Kraft paper, faced a challenge from the Assessing Authority for not maintaining separate accounts for raw materials traceable to products transferred outside the state without tax payment. The Authority denied input tax credit and rebate due to lack of separate accounts. The First Appellate Authority ruled in favor of the assessee, confirming that all raw materials were used in products sold locally with tax payment. The Appellate Tribunal upheld this decision, noting the lack of dispute on the raw material use. The revenue raised questions on the Tribunal's decision, but the Court found no substantial legal issue, upholding the Tribunal's decision and dismissing the OT. Revision petitions.The key issues considered by the Court were:1. Whether the Tribunal erred in dismissing the appeal and upholding the First Appellate Authority's decision.2. Whether the Tribunal correctly accepted the purchase and sale ratio statement over the manufacturing account requirement.3. Whether the Tribunal's findings on the purchase and sale ratio were appropriate.The Court's analysis focused on the factual findings and lack of dispute on the raw material use. The Tribunal's decision was based on the evidence presented by the assessee, including stock registers and purchase/sales ratios, which were not challenged by the revenue. The Court concluded that no substantial legal question arose, as the First Appellate Authority's subjective satisfaction based on the evidence was sufficient to support the Tribunal's decision. Consequently, the OT. Revisions were dismissed in favor of the respondent assessee.The significant holding of the Court was the affirmation of the Tribunal's decision based on the factual evidence presented and the lack of dispute on the raw material use. The Court emphasized that the revenue did not establish a case warranting interference with the Tribunal's order, leading to the dismissal of the OT. Revisions.