The State Of Karnataka vs. Simplex Infrastructures LTD.
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Cause title — parties, addresses and appearances
ORDER
This petition under Section 65(1) of the Karnataka Value Added Tax Act, 2003 (hereinafter referred to as 'the Act' for short) has been filed against the order dated 31.10.2017 passed by the Karnataka Appellate Tribunal.
The petition was admitted by an order dated 04.12.2019 on the following substantial questions of law:
"
Whether Tribunal was justified in setting aside the disallowance of input tax
3 credit claimed by respondent - assessee on purchases effected from dealers who had either been deregistered or had failed to discharge their tax liability paid on such sales?
Whether Tribunal was correct in setting aside the disallowance of input tax credit claimed by the respondent though respondent had failed to discharge the burden under Section 70 of the KVAT Act of proving the correctness and genuineness of the claim?"
Facts leading to the filing of this revision petition briefly stated are that the respondent- assessee is a dealer registered under the provisions of the Karnataka Value Added Tax Act and is engaged in execution of civil works contracts. During the tax period from April 2011 to March 2012, the assessee claimed to have purchased goods from various dealers and claimed input tax credit on the basis of the invoices raised by them. An order of reassessment
4 was passed on 28.02.2015 by which input tax credit claimed by the respondent was allowed. Subsequently, the Assessing Authority denied the input tax credit claimed by the respondent on such purchases by a rectification order dated 14.07.2015 on the ground that some of the dealers from whom the assessee had claimed to have purchased the goods had either been deregistered or had filed nil returns and had failed to pay tax on the sales effected by the assessee. The Assessing Authority also levied consequential interest and penalty under the provisions of Sections 36(1) and 72(2) of the Act. The assessee, thereupon, preferred an appeal which was dismissed by an order dated 27.11.2015 by the Joint Commissioner of Commercial Taxes. The assessee approached the Appellate Tribunal . The Appellate Tribunal by an order dated 31.10.2017 allowed the appeal preferred by the assessee inter alia on the
5 ground that the input tax credit cannot be denied in the hands of purchasing dealer, merely on the ground that the selling dealer has not discharged his liability to tax. It was further held that the assessee had discharged the burden cast on him under Section 70 of the Act to prove the genuineness of the transactions in question. The Tribunal also set aside the consequential levy of interest and penalty. In the aforesaid factual background, this petition has been filed.
When the matter was taken up today, learned counsel for the assessee submitted that the substantial questions of law involved in this petition have already been answered by a Bench of this Court by judgment dated 07.12.2016 passed in STRP No.171/2016 & STRP Nos.313-316/2016 (The State of of this Court passed in STRP No.171/2016 & STRP Nos.313-316/2016 decided on 07.12.2016 (supra). Therefore, we hold that the substantial questions of law involved in this petition are covered by the aforesaid decision of the Division Bench of this Court in STRP No.171/2016 & STRP Nos. 313-316/2016 (supra).
In view of the aforesaid judgment of this Court, we do not find any merit in this petition and
7 the substantial questions of law are answered against the petitioner and in favour of the assessee.
In the result, the petition is dismissed. JUDGE JUDGE
CA
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.