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TMI Blog2016 (9) TMI 825X X X X Extracts X X X X X X X X Extracts X X X X ..... iture etc cannot be treated as a consumable used in relation to setting up of the unit or in the manufacture of other goods - it is apparent from the Statute itself that the petitioner is not liable for any exemption. Even in Form No.43 submitted by the dealer it is clearly mentioned as house keeping materials and house keeping consumables - ineligible for exemption. Whether in the light of Form No.43 issued by the purchaser whether the petitioner can be imposed with penalty? - Held that: - a bare reading of Section 6(7)(b) would clearly indicate that the product supplied by the petitioner is liable to be taxed and no exemption can be claimed at all. That apart, as rightly contended by the learned Government Pleader, the petitioner di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner had claimed exemption from payment of tax on the turnover based on Form No.43 issued by the purchaser. However, penalty proceedings had been taken by issuance of notice under Section 67(1) of the KVAT Act inter alia observing that the commodity described in Form No.43 did not come within the purview of Section 6(7)(b) of the KVAT Act 2003. Though the petitioner preferred objection without considering the same penalty orders had been passed by which the petitioner had been called upon to pay double the amount of tax sought to be paid for the respective years. Without challenging the impugned orders by way of statutory revision, petitioner had approached this Court inter alia contending that the penalty proceedings had been taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said invoice, the purchasers had issued Form No.43. Therefore, it is a clear case of evasion of tax which has been deliberate and there is justification on the part of the Intelligence Officer who have initiated proceedings under Section 67(1) of the Act and passed final orders. It is also stated that there is no legal bar for issuing a fresh notice under Section 25(1) of the KVAT Act on the basis of the material made available after investigation. In paragraph 9 of the counter affidavit it is stated as under: In the VAT scenario self assessment is being taken place. The Assessing Authority has normally no means to physically verify the goods dealt with by the dealer. It is the duty of the Intelligence Wing to verify those aspects and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estrictions, as may be prescribed, be exempted from tax. 7. Petitioner apparently is a dealer in cleaning material. Statute exempts certain items from being taxed. Contention of the petitioner is that cleaning material being a consumable supplied to an establishment in Special Economic Zone of the State, it is liable to be exempted. But, a close reading of the Statute would show that the consumable used by the developer or industrial unit or establishments situated in the Special Economic Zone should be for setting up of the unit or use in the manufacture of other goods. The cleaning material used for the purpose of cleaning the building and other facilities, furniture etc cannot be treated as a consumable used in relation to setting up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axable component. If the petitioner had clearly indicated that it is taxable and the purchaser had issued Form No.43 it would have been a different situation. Therefore, this is an instance where the petitioner had acted deliberately in avoiding payment of tax knowing fully well that there is an obligation to pay tax on the said consumables. Under such circumstances, I do not think that any error had been committed by the Intelligence Officer in imposing penalty on the petitioner. 9. The same is the situation as far as the proceedings under Section 25(1) is concerned. The Assessing Officer had occasioned to consider the penalty orders and issued fresh notice. There is no legal bar for the same. Therefore, it cannot be contended that ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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