TaxTMI 
TaxTMI 
TaxTMI 
2020 (3) TMI 365
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....ing aside the Appellate Authority order dated 24.07.2017 Annexure - C passed under Section 62(6) of KVAT Act? 2. The brief background which has led to filing of this appeal are as under: Appellant/assessee is a registered dealer under the provisions of KVAT Act and is engaged in the business of Silicon CR sheets and electrical steel coils for the tax period 2010-2011 (FY), an order under Section 39(1) of KVAT Act came to be passed on 28.02.2014 whereunder the input tax credit availed for the purchases claimed to have been effected by appellant from M/s.Tradex Metal Corporation was disallowed. Being aggrieved by said order, assessee filed an appeal before the Joint Commissioner of Commercial Taxes (Appeals) - 3, Bengaluru, which authority who by order dated 24.07.2017 Annexure - C allowed the appeal granting the relief as indicated at the said order. 3. The above said order of 1st Appellate Authority was sought to be revised by Additional Commissioner of Commercial Taxes under Section 64(1) of KVAT Act. Hence, notice under Section 64(1) of KVAT Act came to be issued to appellant herein on 08.12.2017 whereunder it was proposed to set aside the order dated 24.07.2017 passed by 1st....
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.... counsel appearing for appellant, namely that there was no sanction will have to be examined, namely, whether prescribed authority has undertaken the re-assessment proceedings? Or prescribed authority had not granted sanction to Deputy Commissioner of Commercial Taxes to undertake the re-assessment proceedings. In the background of original records which is made available by learned HCGP, we will have to answer holding that said contention is without any foundation and is liable to be rejected for the simple reason that in the order dated 17.05.2013 passed by Commissioner of Commercial Taxes i.e., prescribed authority, it is specifically stated that re-assessment proceedings are to be taken by authorities indicated therein, which is appended to the said order as Annexures containing the names of 219 dealers which also include petitioner against whom permission has been accorded to carryout re-assessment proceedings by the respective authorities, which is found at sl.nos.26 and 27 of the said Annexures. As such, we are of the considered view that first substantial question of law framed hereinabove deserves to be answered against the appellant and in favour of the respondent-revenue....
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..... Burden of proof- (1) For the purposes of payment or assessment of tax or any claim to input tax under this Act, the burden of proving that any transaction of a dealer is not liable to tax, or any claim to deduction of input tax is correct, shall lie on such dealer. (2) Where a dealer knowingly issues or produces a false tax invoice, credit or debit note, declaration, certificate or other document with a view to support or make any claim that a transaction of sale or purchase effected by him or any other dealer, is not liable to be taxed, or liable to tax at a lower rate, or that a deduction of input tax is available, the prescribed 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; (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 impositio....
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....seller of the appellant namely M/s. Tradex Metal Corporation had engaged in bill trading "to evade the tax due to the State Government". In fact, a criminal case has also been registered against said dealer by the jurisdictional police namely, Kalasipalayam Police Station which fact is available on record and completely ignored by the 1st Appellate Authority and said issue having not been addressed to by the 1st Appellate Authority. Revisional Authority having taken note of all these aspects has arrived at a conclusion that input tax credit claimed by the assessee is not sustainable. The co-ordinate bench of this Court in the case of M/s.Bhavani Enterprises V/s Additional Commissioner of Commercial Taxes in STA No.71/2013 disposed of on 13.06.2018, while examining the issue regarding the burden of proof, has held: "9. Having heard the learned Counsel for the parties, we are of the opinion that no question of law arises in the present appeal for consideration by this Court and essentially it is a finding of fact arrived at by the Assessing Authority as well as the Revisional Authority in the present case that the Appellant-Assessee claimed input tax credit on the basis of invoices....
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....athotia indicates that he obtained the registrations in the name of other firms at the instance of a third party Mr. Goutham Chand and he never claimed himself to be genuine Selling Dealers actually selling goods in question to the Appellant-Assessee. Therefore, mere his production before the Assessing Authority and his cross examination recorded by the Assessing Authority does not dispel the fact that the tax invoices produced by the Assessee for claiming input tax credit emanates from the genuinely existing selling dealers. 11. Thus, burden of proving that the claim of input tax credit is correct, is squarely upon the Assessee who never discharged the said burden in the present case. The first Appellate Authority was absolutely wrong in setting aside the penalty assuming such burden of proof to be on the Revenue. The Revisional Authority, was therefore, perfectly justified and within his jurisdiction to restore the order of penalty in these circumstances. We also find that at least two of the dealers from whom input tax credit invoices were claimed in the present case were for consideration before this Court in Microqual's case also [supra], namely, M/s. S.L.V. Enterprises and M....