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TMI Blog2021 (4) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... der: M/s. Marudhar Granites (hereinafter referred to as 'assessee' for short) is a proprietary concern engaged in trading of polished granite slabs at Bengaluru, duly registered under the Karnataka Value Added Tax Act, 2003 (hereinafter referred to as 'the Act' for short) borne on the file of LVO-040, Bengaluru. Assessee has filed turnover returns in Form No.VAT-100 for the tax period from April 2006 to March 2007. The Assistant Commissioner of Commercial Taxes Audit (Audit)-4.4, DVO-IV, Bengaluru (hereinafter referred to as 'the AA' for short) has audited the books of accounts and rejected the returns filed by assigning reasons during the inspection of the business premises of the appellant by the CTO (Int), South Zone, Bengaluru on 24.01. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... KAT, parties were heard and KAT by impugned judgment allowed the appeal of the assessee and set aside the order passed by the FAA and AA dated 10.05.2016 and 31.03.2014 respectively insofar as disallowing the input tax credit and considering the excess stock as taxable turnover. The State is in appeal against the said order of the Karnataka Appellate Tribunal in this revision petition. 5. Learned Additional Government Advocate for the petitioner -State contended that the Tribunal grossly erred in setting aside the order passed by the FAA and the AA. He further emphasized that the scheme of KVAT Act is such that only tax that has been collected by a selling dealer is eligible to avail input tax credit by the purchasing dealer and the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enting the assessee supported the impugned order by submitting that when once the purchase is made by the assessee with proper documentation, the assessee can always claim the input tax based on the value mentioned in the invoice and whether his dealer has paid the tax or not is not concerned to the assessee and therefore, sought for dismissing the Revision Petition. 11. He also contended that there is a burden cast on the assessee to establish that he is entitled to claim input tax. In the case on hand, the assessee has discharged the said burden by placing cogent materials on record. He further contended that invoice itself is sufficient enough for the assessee to claim in put tax and therefore, the Inspection Report furnished by the CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority shall, on detecting such issue or production, direct the dealer issuing or producing such document to pay as penalty; (a) in the case of first such detection, three times the tax due in respect of such transaction or claim; and (b) in the case of second or subsequent detection, five times the tax due in respect of such transaction or claim. (3) Before issuing any direction for the payment of the penalty under this Section, the prescribed authority shall give to the dealer the opportunity of showing cause in writing against the imposition of such penalty. 77. Penalties relating to seals, electronic tax registers and to unaccounted stocks.- (1) ..... (2) Any persons or dealer who is found to be in possession of una ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dis allowing of input tax by the AA and the FAA is without factual basis. There cannot be any dispute as to the burden cast on the assessee to establish the transaction to lay a claim for deduction of input tax by production of documents referred to supra. This Court is of the considered opinion that the assessee has discharged this burden in proving that transaction is a genuine transaction. 17. In the case on hand, if M/s. Priya Traders has remitted the tax to the Department, assessee cannot be penalized. Therefore, we do not find any justification in interfering with the order of the Karnataka Appellate Tribunal. 18. Under the scheme of the Act, there is no power vested in the authority to proceed against the assessee for non-remitta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit cannot be deprieved to the purchaser dealer." In our considered opinion the above observation made by the Hon'ble High Court is aptly applicable to the case in hand. 15. No doubt that the FAA in his order relied the judgment of the Hon'ble High Court in the case of Packwel Industries Vs. State of Karnataka in STRP No.1/2011, 324 to 347/2011 dated 20-07-2012. In the said decision the Hon'ble High Court observed that the burden is upon the dealer to show that the dealer from whom he purchased the goods remitted the tax to the Government. 16. But in our considered view the facts and circumstances of the present case and the case in M/s.Packwel Industries are totally different. In the said case the Hon'ble Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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