2022 (7) TMI 417

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....e impugned order insofar as it holds that the Respondent has not violated any of the conditions of the composition scheme prescribed under the KVAT Act and Rules, despite admittedly purchasing goods from outside the State of Karnataka for use in the course of its business? 2. Whether the Karnataka Appellate Tribunal has erred in passing the impugned order, insofar as it holds that the prohibition on purchase of goods from outside the State by composition dealer under the KVAT Act does not apply to capital goods?" 2. Heard Shri. Jeevan J.Neralagi, learned AGA for petitioners. 3. Brief facts of the case are, respondent is a Proprietary firm and runs a Fast Food Restaurant. It has opted for composition scheme for payment of tax ....

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....espondent has purchased the Refrigerator and other items from outside the State. In terms of Rule 135(1) & (2) of the KVAT Rules, the option to pay tax by way of composition shall not be available to a dealer, who makes inter-State purchase. The Assessing Authority and the First Appellate Authority, on appreciation of facts on record have rightly denied the benefit to pay taxes under composition to the respondent. However, the KAT has allowed the appeals on an erroneous assumption that the goods in question are not 'goods held in stock'. In view of the admitted facts, the benefit of composition is not available to the assessee. Therefore, the impugned order passed by the KAT is unsustainable in law. 6. We have carefully considere....