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TMI Blog2009 (9) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... een sold within the State and more so, the assessee itself being a dealer dealing with such products, the assessing authority and the Commissioner have rightly arrived at the proper conclusion. The Joint Commissioner was wrong in varying the order of the assessing authority. We do not find any question of law which is erroneously decided by the Additional Commissioner, as is sought to be made out in the questions of law raised in the memorandum of appeal. Appeal dismissed. - 85 of 2009 - - - Dated:- 15-9-2009 - SHYLENDRA KUMAR D.V. AND ARAVIND KUMAR , JJ. The judgment of the court was delivered by D.V. SHYLENDRA KUMAR J. Appeal by a dealer registered under the provisions of the Karnataka Sales Tax Act (hereinafter referred to as, the Act for brevity) and under section 24 of the Act. This appeal is directed against the order dated April 22, 2009 passed by the Additional Commissioner of Commercial Taxes, Zone-I, Bangalore, in ZAV-1/BNG/SMR-60, 60A/08-09, who had, by exercising his revisional jurisdiction under section 22A(1) of the Act set aside the appellate order passed by the Joint Commissioner of Commercial Taxes (Appeals)-I, Bangalore, passed on April 15, 2008 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d machinery at the Hassan plant, issued a notice under section 12A of the Act indicating that the assessing officer proposes to add back this amount with commensurate profit margin, as the additional turnover during the period April 1, 2004 to March 31, 2005 which had escaped assessment, unless the assessee was able to come up with a satisfactory explanation and proof of the actual utilization of this quantity of iron and steel, in the erection of its plant and machinery at Hassan. The assessee caused a reply to this notice in terms of its belated reply. Initially, the assessee asked for additional 20 days time and sought further time. However, by reply dated August 16, 2007 which was received in the office of the assessing officer on September 1, 2007, objected to the proposed reopening. It was claimed that the assessee/dealer, M/s. Haryana Steel and Power is a division of M/s. Haryana Ship Breakers Limited, Bhavanagar; that the assessee had established medium scale unit , manufacturing sponge iron a plant located in Hassan to take advantage of the incentives provided under the Karnataka New Industrial Policy, 2001-06 and that the assessee had completed the setting up of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and wanted to place some additional material of the assessee, having taken the bold step of setting up of a sponge iron manufacturing unit, in the backward area of Hassan District of Karnataka State and such material clearly demonstrated that the assessee had not sold the scrap and other iron and steel items, which it had transported or gathered at is factory unit at Hassan but it was utilized for the setting up of its sponge iron unit at Hassan. The appellate authority was fully convinced that the assessee had utilized the inter-State purchases of iron and steel, by way of stock transfer on the strength of F form, in the manufacture of plant and machinery, required for production purposes and being also satisfied about the Hassan unit had been recognised by the competent Department, namely, the Department of Industries and Commerce, in terms of certificate dated June 26, 2004, etc., allowed the appeal and set aside the reassessment order of the assessing authority. The assessee's woes would have ended with this but for attracting the adverse attention of the Commissioner, who thought it proper to exercise his revisional jurisdiction under section 22A of the Act and cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Joint Commissioner (Appeals). It is for achieving this object, the present appeal on the following substantial questions of law, as indicated in the memorandum of appeal. The questions that are projected before us for consideration are as under: (a) Whether in facts, figures and circumstances of the case the respondent-authority was justified in exercising the jurisdiction under section 22A of the Act as the provisions provides for review of only erroneous orders? (b) Whether in facts, figures and circumstances of the case the respondent-authority was justified in discarding all the expert evidence adduced by the appellant and hold that the evidence was not 'clinching evidence' and hence the order of the first appellate authority being rejected and reinstating the order of the assessing authority? (c) Whether in facts, figures and circumstances of the case the respondent-authority was justified in not passing any order on merits under the provisions of section 22A of the KST Act, 1957 and summarily rejecting the order of the first appellate authority when the provisions of the Act clearly empowers the authority to make such inquiry as deemed necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... para Nos. 8 and 9 are unexceptionable. We also find the discussion in para No. 6 which proceeds as under: 6. The order of appeal of the appellate authority was found to be illegal and prejudicial to the Revenue for the reason that even without proof by way of evidences in regard to utilization of iron and steel scraps in fabrication of plant and machinery of the unit in Hassan district, he came to an opinion that such iron and steel scrap is actually used in construction of plant and machinery of the unit. His opinion is based on assumption without the support of evidences. The respondent has failed to establish that the iron and steel and scrap purchased and also by stock transfers have actually been used in the manufacture of plant and machinery of the unit in the State. The evidences produced as explained before the appellate authority do not establish the fact that the iron and steel brought from outside the State is actually used in the manufacture of plant and machinery of the unit in the State. Photographs are not at all evidences and they do not prove anything except they may be the photographs of the unit in the State. They do not establish that iron and steel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arises in case of such purchases or receipts. It is not for the assessing authority even to establish that sale has actually taken place. Such an event is within the knowledge of the respondent as assessee. In the absence of proof of having utilized iron and steel in the manufacture of plant and machinery of the unit in the State, the obvious inference that should be drawn by the assessing authority is that such goods have been sold. He cannot be called upon to establish the suppressed or concealed material fact in regard to disposal of iron and steel scrap. In view of the aforesaid reasons, the appeal order is erroneous in law which factually causes loss of revenue. Deletion of penalty in regard to suppressed turnover and tax evident as it was wilful and mala fide on the part of the respondent in regard to such assessable turnover is also illegal causing loss of revenue. as the reason for which the Additional Commissioner had proposed to exercise his suo motu revisional jurisdiction also a cogent, convincing, legible one meriting acceptability. On an examination of the material on record and the orders by the assessing authorities, we find that the assessing officer as wel ..... 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