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TMI Blog2014 (4) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... o engaged in packing and marketing of the edible oil of Soyabean and Palmolein oil. In the course of business, the appellant purchased edible oil both from the registered dealers situated within the State and also from the dealers situated outside the State of Karnataka. 3. The appellant filed returns in Form No.100 for the period from April 2005 to March 2006 declaring total turnover and the tax payable and also availed deduction of input tax credit in respect of purchase of oil, rebate on purchase of capital goods, i.e. goods vehicle and claimed deduction of input tax in respect of capital goods. 4. The business premises of the appellant was inspected by the DCCT (Audit-51) on 23-01-2007 for the purpose of verification of books of account for the said tax period. At the time of audit, Siddalingappa, the person in-charge of the business was present and produced the books of account. The Chartered Accountant also produced the books for verification. On verification of the books of account for the period April 2005 to March 2006, the Assessing Authority noticed that the assessee effected local purchase of edible oil from 17 dealers and availed input tax credit. Out of 17 dealers, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er passed by the First Appellate Authority is erroneous and prejudicial to the interest of the Revenue. Accordingly issued notice under Section 64(1) of the KVAT Act to revise the order passed by the First Appellate Authority. 5. The appellant-assessee filed objections to the said notice and reiterated the contentions taken before the First Appellate Authority. The Revisional Authority after considering the matter in detail, by its order dated 4-12-2009 revised the order dated 28-05-2009 passed by the First Appellate Authority and restored the order dated 27-01-2009 passed by the Assessing Authority and directed the Assessing Authority to issue revised demand notice. Being aggrieved by the said order the appellant has filed this appeal. 6. In the appeal, the following questions of law have been framed for consideration: (i) Whether the respondent is justified in denying the registered dealer purchases effected by the appellant from M/s. Healthy Life Agro Foods and thus rejecting the input tax claim made by the appellant in accordance with Section 10 of the Act? (ii) Whether the respondent is justified in denying the input tax claim on the ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Canter fitted with tanker in which the taxable goods are transported during the course of business. Sub-section 7 of Section 2 of the KVAT Act defines the 'Capital Goods' which includes cold storage plant and similar plant, machinery, goods vehicle, equipments, moulds, tools and jigs used in the course of business other than for sale. Section 12 contemplates deduction of input tax in respect of the capital goods. Hence, the order passed by the Assessing Authority in denying the input tax in respect of the goods vehicle and other capital goods is contrary to law and sought for allowing the appeal. 8. On the other hand Sri. T. K. Vedamurthy, learned Government Pleader appearing for the respondent argued in support of the order passed by the Revisional Authority and contended that, to avail the benefit under Section 10(4) of the Act, the appellant has to purchase the goods from the registered dealers. No material has been produced to show that M/s Healthy Life Agro Foods, Bangalore is a registered dealer. The records maintained by the respondent clearly disclose that the said M/s Healthy Life Agro Foods, Bangalore is not a registered dealer. The TIN number mentioned in the tax invoic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pectively totaling Rs.1,26,28,900/-. The seller dealer has also not deposited the tax collected. Hence, Assessing Authority as well as Revisional Authority held that the appellant is not entitled for any deduction towards the input tax credit claimed by him in respect of the purchase made from M/s. Healthy Life Agro Foods, Bangalore. This Court on 09-12-2011 directed the Government Advocate to produce the records in respect of M/s. Healthy Life Agro Foods, Bangalore bearing TIN No. 29020450710. Pursuant to the said direction, the Government Advocate made available the records and also the communication received from the Assistant Commissioner of Commercial Taxes, LVO-050, Bangalore dated 3-8-2012 which reads as under: Sub: Report regarding TIN No.29020450710 of M/s. Healthy Life Agro Foods, Bangalore. With reference to the above, this is to inform you that no dealer is registered in this Office by TIN No.29020450710. E-filing system shows that this is not a valid TIN number. The TIN number 29020450710 is not in existence and not a valid one and not registered anywhere in Karnataka. The copy of the computer print out is enclosed for kind refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n business; 13. Section 12 speaks about deduction of input tax in respect of capital goods which is used in the business of sale of any goods in the course of export out of the territory of India and in the case of any other dealer in respect of purchase of capital goods wholly or partly for use in business of taxable goods. Rule 133 of the KVAT Rules provides that no deduction of input tax shall be allowed where the use of capital goods relates wholly to the sale of exempt goods. Clause (b) of the above Rule provides that where the capital goods used for sale of taxable goods wholly or partly the dealer shall be eligible for rebate on such capital goods. The cumulative reading of the above provisions make it clear that when the dealer purchased the capital goods for the purpose of his business, he is entitled for deduction of input tax under the Act. The language employed in the definition of 'Capital Goods' makes it clear that deduction of input tax shall always be allowed in respect of purchase of capital goods for the use of business wholly or partly for use in the business of taxable goods. Further reading of definition of 'input' makes it very clear that any capital goods pu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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