TaxTMI 
TaxTMI 
2018 (7) TMI 1705
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....turn disclosing local purchases made and consequent sales, on which tax was paid, adding GP to the purchase turnover on the scheduled rates of each of such goods. These goods where supplied by the awarder and actually incorporated in the works contract by the assessee itself, the value of which was deducted from the total contract amount before payment to the awardee/assessee. 2. The Intelligence Officer was of the opinion that under Section 6(1)(f) of the KVAT Act, the entire contract amount had to be disclosed in the turnover and tax paid at 12.5% after eligible deductions as available in Rule 10. There was hence an evasion found in so far as the assessee having paid only the scheduled rate of those goods, which were incorporated in a wo....
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....is of the contract receipts as available in the books of accounts ? ii) Whether in the context of the suppression and the consequential attempt to evade tax; in computing the tax sought to be evaded, is it permissible to take into account the component of input tax credit? 5. The proceedings were initiated by the Intelligence Officer and penalty was imposed as per Annexure A orders produced in both the Revisions. On first appeal there was a modification made in one year to the penalty imposed. The assessee was before the Tribunal wherein the penalty imposed was set aside in its entirety. 6. The assessee, as already stated, is a works contractor who, according to the learned Counsel, has in the subject year first entered into the f....
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....entire contract receipts and paid tax in accordance with the liability under Section 6(1) of the KVAT Act after claiming exemptions under Rule 10. The attempted tax evasion is in so far as the statute providing for a higher rate of tax at a uniform rate on goods involved in execution of a works contract; different from the rates applicable to individual goods, as per the Schedule, on a sale simplicitor which is permissible as held in Gannon Dunkerly & Co. Vs. State of Rajasthan (1993) 1 SCC 364. In such circumstance, we find that there is definitely a reason for initiation of penalty proceedings. 8. Cooch-Behar Contractors' Association considered the specific issue of supply by the awarder to the awardee for the purpose of accre....
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....Officer and the turnover found to have been suppressed is from the total contract amount received by the awardee-assessee. 10. M/s.Supreme Food Industries was a case in which deep freezers were supplied to the dealers by the manufacturer of ice-creams. The agreement of franchise with the dealers specifically indicated that the ownership of the deep freezers will be retained with the manufacturer itself. However, there was also a condition that there could be made purchase of the deep freezers at a later stage for a reduced amount. Penalty proceedings were initiated on the ground that there is actual sale of the deep freezers even at the time of initial handing over of the deep freezers by the manufacturer to the franchisees. The Division B....
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....s a different product. However, on the question of penalty it was held that the assessee having disclosed the sale in its books of accounts, the Assessing Officer could have very well ferreted out the liability from the books of accounts and levied tax. We are of the opinion that the said decisions are in the context of a tax regime where there was contemplated a regular assessment after filing of a return; which requires production of books of accounts before the Assessing Officer. Under the VAT regime, Section 21 contemplates a self assessment on the basis of a return filed by the assessee subject only to the provisions of Sections 22, 24 and 25. Hence, there is no regular assessment contemplated as was available under the KGST regime or ....
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....tions under Rule 10 of the KVAT Rules. At this point, definitely the awardee would be entitled to claim input tax credit being the tax originally paid by the awarder at the time of purchase. However, the claim can be raised only in assessment proceedings and there could be no deduction made of such probable claim, in computing the tax sought to be evaded. No assessee can take a contention on detection of suppression that a claim which would have been allowable on the disclosure of the turnover had to be granted in determining the quantum of the suppressed turnover. We rely on Venus Marketing v. State of Kerala, [(2011) 19 KTR 575 (Ker)]. 12. On the reasoning above, we are of the opinion that the decisions in Sree Krishna Electricals, U.K.....