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2016 (5) TMI 1190

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.... a registered dealer under the provisions of the KVAT Act,2003 (the 'Act' for short). It transpires that the petitioner had purchased iron and steel from M/s Huda Traders Moratagi, in the months July '05, October '05, January '06 - March '06 and claimed input tax credit amounting to Rs. 5,24,283/- in its monthly returns. The prescribed authority exercising the powers under Section 39(1) of the Act concluded reassessment proceedings and disallowed the input tax credit claimed by the petitioner in respect of the goods - iron and steel, purchased from M/s Huda Traders Moratagi, since the selling dealers were absconding and were involved in bill trading. The Prescribed Authority also levied penalty under Section 72(2) of....

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....tting the tax collected to the Government, it is for the authorities to initiate proceedings against the defaulting dealer and not to disallow the input tax credit as claimed by the assessee. The learned counsel appearing for the assessee has placed reliance on the decision of MILANO PLYWOOD SUPPLIERS vs STATE OF KARNATAKA (2014(80) KLJ 206). 6. Sri. Syed Habeeb, learned Addl. Govt. Adv. Appearing for the revenue justifying the orders passed by the Tribunal as well as the authorities would contend that the assessee has purchased the goods from a bogus or non-existent dealer. Despite several opportunities provided to the assessee neither the books of account nor tax invoices were produced to establish that the selling dealer was a genuine r....

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....ent of this Court in the case of M/s MICROQUAL TECHNO PRIVATE LIMITED vs ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, ZONE 1, BANGALORE ((2012)52 VST 362 (Kar))  and M/S PACKWELL INDUSTRIES vs THE STATE OF KARNATAKA (STRP Nos.1/2011 & 321 to 347/2012 disposed of on 20.7.2012) dismissed the appeals. 10. It is apposite to refer to Section 70 of the Act which reads thus:- "70. Burden of proof: (1) For the purposes of payment or assessment of tax on any claim to input tax under this Act, the burden of proving that any transaction of a dealer is not available to tax, or any claim to deduction of input tax is correct, shall lie on such dealer". A reading of this provision makes it clear that the burden lies on the assessee to establish t....