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TMI Blog2011 (8) TMI 998X X X X Extracts X X X X X X X X Extracts X X X X ..... y, we pass the following order: The STRP is allowed. The impugned order passed by the Appellate Tribunal is hereby set aside. The orders passed by the assessing authority as well as the Appellate Commissioner are restored. - S.T.R.P. Nos. 32 & 103 - 105 of 2010 - - - Dated:- 4-8-2011 - KUMAR N. AND RAVI MALIMATH, JJ. For the petitioner K.M. Shivayogiswamy, High Court Government Pleader, For the Respondent : B.G. Chidananda Urs ORDER:- The order of the court was made by N. KUMAR J. This revision petition is preferred by the State challenging the order passed by the Karnataka Appellate Tribunal, which held that the assessee is not liable to pay purchase tax under section 3(2) of the Karnataka Value Added Tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aged in the business of works contract and property development. Under works contract, the assessee is liable to pay tax under the Act on sale of goods which are transferred in the form of goods. With respect to property development, where there is no transfer of property in goods, the transfer of building and flats amounts to sale of immovable property, therefore, payment of tax does not arise. Even though the assessee is registered under the Act, he is acting in dual capacity. Since the assessee has consumed the purchase made from unregistered dealers purely for own construction of flats which are exempt from tax, they held that assessee is not liable to tax under section 3(2) of the Act. Aggrieved by the said order, the Revenue is in app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the provisions of this Act. (2) The tax shall also be levied, and paid by every registered dealer or a dealer liable to be registered, on the sale of taxable goods to him, for use in the course of his business, by a person who is not registered under this Act. Sub-section (2) of section 3 deals with the liability to pay tax on the registered dealer when he purchases taxable goods from a person who is not registered under the Act. As is clear from the aforesaid provision, the tax shall also be levied and paid by every registered dealer or a dealer liable to be registered on the sale of taxable goods to him for use in the course of his business, by a person who is not registered under this Act. In other words, if a registered dealer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arises only if purchase is made for use in the course of his business. It does not mean that the said business which he is carrying on should be only sale and purchase of such goods. The words employed are 'use in the course of his business' and not mere 'use'. The use of the goods may be in the same condition if he is a re-seller or the said goods may be a raw product which will be absorbed in the final product in respect of which he is carrying on business. The user of the goods purchased depends on the nature of his business. Therefore, if that registered dealer who purchases these goods, sells the goods in the same form or uses in the course of his business by absorbing the same as an input to the final product and then ..... X X X X Extracts X X X X X X X X Extracts X X X X
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