TaxTMI 
TaxTMI 
2007 (2) TMI 309
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....-Leave granted. Challenge in this appeal is to the judgment rendered by a division Bench of the Karnataka High Court dismissing the appeal filed by the appellant under section 24(1) of the Karnataka Sales Tax Act, 1957 (in short, "the Act"). Appellant called in question legality or otherwise of the orders passed by the Additional Commissioner of Commercial Taxes, Zone-II, Gandhinagar, Bangalore, dated June 12, 2002. Background facts in a nutshell are as follows: The appellant is a dealer registered under the provisions of the Act. It is borne on the files of the Deputy Commissioner of Commercial Taxes (Assessment), 46th Circle, Bangalore. The main activity of the appellant is construction of mass houses for Karnataka Housing Board.....
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....he assessee is not one of manufacturing or processing of goods for sale and, therefore, it has contravened the specified conditions under the notification. Accordingly, he raised a demand of an amount equal to the difference between the tax payable and tax paid amounting to Rs. 10,71,745 and also penalty amounting to Rs. 18,00,531 as envisaged under section 8A(5)(a) of the Act. Aggrieved by the aforesaid order, the assessee carried the matter in an appeal before the first appellate authority. The said authority allowed the appeal and set aside the orders passed by the assessing authority, on the ground that the assessee satisfied all the conditions prescribed in the notification and, therefore, was entitled to take the benefit of the not....
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....h 31, 1994. The High Court after analysing the notification came to hold that the order passed by the authorities did not warrant any interference. Learned counsel for the appellant submitted that the authority empowered to issue the notification had made it abundantly clear that the dealer who effects the sale of machinery can take the benefit of the notification only after fulfilling the other two conditions mentioned in the notification, i.e., (1) that the dealer should produce a declaration in form 37 duly filled and signed by the manufacturing industrial unit, i.e., the purchasing dealer and (2) satisfactorily prove that what has been sold to a registered dealer is an industrial input for use by him/it as a component part or raw mat....
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....nit located in the State for use by such unit in the manufacture or processing of goods for sale, subject to the condition that the dealer produces before the assessing authority a declaration in form 37 duly filled in and signed by the said manufacturer or industrial unit, as the case may be, and subject to further condition that all the provisions relating to taxation of industrial inputs under section 5-A of the said Act shall apply mutatis mutandis to this notification." Stand of the appellant before the High Court and in this appeal is that the appellant is a civil contractor and it manufactures pre-fabric beams and column for sale and, therefore, is an industrial unit. Though the High Court had reservation about accepting this stan....
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....uts for use either as a component part or as a raw material of any other goods. The residual question is the quantum of penalty. The assessing authority had imposed penalty of Rs. 18,00,531. The sum was reduced to 50 per cent of the amount by the revisional authority. Section 8A(5)(a) which is relevant provision relating to imposition of penalty reads as follows: "Where any restriction or condition specified under sub-section (2) in respect of goods taxable at the point of sale is contravened or is not observed by the purchaser of such goods, notwithstanding that such a purchaser is not a dealer or that the sale value of such goods is less than the turnover specified in sub-section (5) of section 5, such purchaser shall be liable to p....