JUDGMENT N. Kumar : This Appeal is filed by the Assessee, challenging the order passed by the Revisional Authority, which has reversed the finding recorded by the First Appellate Authority under Section 72(2) of the Karnataka Value Added Tax Act, 2003. The Assessee is a registered dealer under the Karnataka Value Added Tax Act, 2003 (in short, hereinafter referred to as 'KVAT Act'). He is a manufacturer and dealer in Radio Frequency Components and Telecom Components. The place of his business was visited by the Assistant Commissioner of Commercial Taxes on 24th and 27th of September, 2008 for inspection-cum-audit of Books of Accounts. On verification of Purchase Invoices, Purchase Register and Ledger, it was noticed that he has accounted as local purchase of "Feeder Clamp Sets" on the invoices which are in the names of following suppliers : (1) M/s. S.L. Enterprises. (2) M/s. T.D. and Company. (3) M/s. Pooja Trading Corporation. (4) M/s. Ummed Sales Corporation. By accounting the invoices, which are in the names of above suppliers, he had availed Input Tax Credit thereon and claimed the same in the returns furnished to the Department in the tax periods of October 2005 and September, October, November and December of 2006. On cross-verification and investigation conducted, the Department revealed that the above suppliers were not existing at the addresses given in the invoices and the turnover and the tax collected in the so-called invoices had not been declared to the Department and the suppliers had been 'De-registered' for non-filing of returns. According to the Taxing Authorities, the investigation revealed that the invoices which were in the names of above firms were issued by some benami persons. There was an attempt to evade taxes by way of issuing fictitious invoices by the benami persons and by obtaining the said invoices by the purchase dealer. The investigation also revealed that some suppliers had denied to have supplied any goods to the dealer and further stated that some benami persons had misused their names and TIN numbers. Since the above suppliers were not existing, the purchase invoices were found to be fictitious and found to have been issued by some benami persons who were in the line of Bill Trading and by obtaining the same, the dealer claimed Input Tax Credit which were not at all related to the goods, Assessee had purchased. Since the above suppliers were not existing, the purchase invoices were found to be fictitious and found to have been issued by some benami persons who were in the line of Bill Trading and by obtaining the same, the dealer claimed Input Tax Credit which were not at all related to the goods, Assessee had purchased. In other words, the person who had supplied the goods had not issued the invoice and instead, in order to cover the purchases with invoice, the dealer had obtained invoices from Bill Traders and claimed the Credit. Therefore, as per Section 70 of the Act, the dealer had committed an offence of producing false invoices in support of his claim of Input Tax Credit. Therefore, the Assistant Commissioner found appropriate to disallow Input Tax Credit claimed on fictitious invoices and levied penalty. Aggrieved by the said order, the Assessee preferred an Appeal. The Appellate Authority though confirmed the order of disallowing Input Tax Credit, set aside the penalty imposed on the ground that if the registered dealer who collected the tax from the Assessee, had not paid the tax to the Department, it cannot be said that the Assessee knowingly produced invoices, which are not genuine and therefore, the penalty was set aside. Aggrieved by the said order, the Assessee preferred an Appeal. In the meanwhile, the Revisional Authority exercised suo motu power of revision against that portion of the order of the First Appellate Authority, which set aside the penalty imposed on the ground that it was prejudicial to the interest of the revenue. After hearing the Assessee, the Revisional Authority recorded a finding that the invoice produced were not genuine as the same were procured through a mediator that it was well-within the knowledge of the Assessee and therefore that it could not be said, the material on record did not indicate that the Assessee knowingly produced bogus invoices and therefore, he set aside the portion of the order of the First Appellate Authority and levied penalty. Against the said order, the present Appeal is filed by the Assessee. Against the said order, the present Appeal is filed by the Assessee. The learned Counsel for the Appellant assailing the impugned order contended that, when once it is admitted that the four dealers who sold articles to the Assessee were all registered dealers and they had received payment by way of cheque from the Assessee, which cheque has been duly encashed and if they had not paid tax and not filed returns that would not be held against the Assessee. In fact, all the allegations, which were made in this regard were not substantiated by any material on record. The department did not make available to the Assessee the so-called statements recorded by those dealers or other adverse material on which they came to pass the said order. Therefore, he submits, not only the order is opposed to principles of natural justice but is also illegal and the order passed by the Appellate Authority has been interfered with without proper justification and therefore, he prays for allowing of the Appeal. Per contra, the learned Government Advocate supporting the impugned order contends that the material on record clearly discloses that after the discrepancy was noticed in the course of the enquiry, it is the Assessee who spoke about the mediator from whom the goods were produced and handed-over those invoices. However, when they were asked to furnish particulars, they have neither denied nor furnished any particulars. In the assessment proceedings, they did not make any request for handing-over all the adverse materials and even before the First Appellate Authority, no request was made. There is no obligation on the part of the Department to make available the materials, in the absence of any request by the Assessee. In this case, the Assessee did not make any request for the materials because it was well-within his knowledge. Therefore, he submits that, it is not a mere case of non-remittance of tax but also a case of claiming benefit by producing tax invoices, which was well-within the knowledge of the Assessee and therefore, the penalty imposed is justified and does not call for any interference. Insofar as the principles of natural justice is concerned, we have gone through the records. In the course of the enquiry, when they noticed this discrepancy, they set out the allegations, which the Assessee had to answer. The Assessee gave a reply. Insofar as the principles of natural justice is concerned, we have gone through the records. In the course of the enquiry, when they noticed this discrepancy, they set out the allegations, which the Assessee had to answer. The Assessee gave a reply. In the reply, he did not ask the Department to give the adverse material, which was against him. He did not ask for a copy of the Audit Report, which was the basis for initiation of the proceedings. In the Appeal also, though a ground was taken in the Appeal Memo, no request was made to the department to furnish the adverse material. However, the First Appellate Authority proceeded tangently without properly appreciating the material on record, what had transpired before the Assessing Authority in particular, were regarding the allegations made by the Department, which remained unanswered in the course of enquiry. In those circumstances, the Revisional Authority had rightly interfered with the said order and on proper appreciation of the entire material on record, recorded a finding that the invoices, under which the goods were produced were not genuine. It was not supplied by the registered dealers, it was supplied by a mediator who had handed-over those invoices to the Assessee and therefore, the Assessee had knowingly produced these tax invoices and consequently, he has to pay the penalty. In that view of the matter, we are satisfied that the plea of violation of principles of natural justice has no substance. Insofar as imposition of penalty is concerned, Section 70(2) of the KVAT Act, 2003, deals with the said subject, which reads as under : "70(2) Where an attachment has been made under this part, any private transfer or delivery of the property attached or of any interest therein and any payment to the defaulter of any debt, dividend or other monies contrary to such attachment, shall be void as against all claims enforceable under the attachment". It is not in dispute that, a show-cause notice as contemplated under Section 3(3) of the Act had been issued and the Assessee had given his written reply. Now, the only question is, whether the Assessee had knowingly produced a false tax invoice to support a deduction of Input Tax, which is available to him under law. The Revisional Authority has clearly set out the adverse materials justifying imposition of penalty. Now, the only question is, whether the Assessee had knowingly produced a false tax invoice to support a deduction of Input Tax, which is available to him under law. The Revisional Authority has clearly set out the adverse materials justifying imposition of penalty. They have clearly set out number of invoices raised by the four suppliers with invoice number, date, quantity, value of goods and VIT and IRG numbers. The total Input Tax Credit claimed by the Assessee is Rs. 3,85,183/-. From the dates of the invoice, it is clear that the supply is neither occasional nor stray cases. It is continuous and it is for three months from October 2005 to December 2006. The format of tax invoice of these fraudulent suppliers is almost similar and common. The payment towards these supplies and purchases on the basis of tax invoices are also made by the Assessee on his own terms, i.e., he has not made the payments immediately and the payments are accumulated as due and made at the end of the respective financial years of 2005-06 and 2006-07. The observation of the Audit Authority in this connection is relevant and assumes importance, which reads as under : "Whereas, the cross-verification and the investigation conducted by the Department has revealed that the above suppliers are not existing at the addresses given in the invoices and the turnover and the tax collected in the so-called invoices have not been declared to the Department and the suppliers have been "de-registered" for non-filing of returns. Further, the investigation has revealed that the invoices which are in the names of above firms are issued by some benami persons. There is an attempt to evade the taxes by way of issuing fictitious invoices by the benami persons and by obtaining the same invoices by the purchasing dealer. The investigation has also revealed that some suppliers have denied to have supplied any goods to the dealer and further stated that some benami persons have misused their names and Tin Numbers. Such being case, since the above suppliers are not existing the purchase invoices were found to be fictitious and found to have been issued by some Benami persons who are in the line of Bill Trading and by obtaining the same, the dealer has claimed Input Tax Credit which are not at all related to the goods he has purchased. Such being case, since the above suppliers are not existing the purchase invoices were found to be fictitious and found to have been issued by some Benami persons who are in the line of Bill Trading and by obtaining the same, the dealer has claimed Input Tax Credit which are not at all related to the goods he has purchased. In other words, the person who has supplied the goods has not issued the invoice and instead, in order to cover the purchases with invoice, the dealer has obtained invoices from Bill Traders and claimed the credit. So, the invoices produced by the dealer in relation to claiming of Input Tax Credit are not pertaining to the goods he has received. The goods are supplied by one person and the invoices are issued by some other person, in turn, the dealer has procured the goods from a person who has not issued the invoice and instead obtained a fictitious invoice to cover up the purchases and claimed the illegal credit and produced the same for verification. Therefore, as per Section 70 of the Act, the dealer has committed an offence of producing false invoices in support of his claim of input tax credit. Such being case, it was found appropriate to disallow Input Tax Credit claimed on fictitious invoices and levy penalty as per Sections 70 and 72 and interest as per Section 36 of the Act. Whereas, since the "burden of proof" lies on the dealer to prove the correctness of his claim of Input Tax Credit, as provided under Section 70 of the Act, a show-cause notice/proposition notice as given below was issued and served by providing an opportunity within 10 days of time." Whereas, on cross-verification, it was revealed that the turnover and the VAT collected in the above invoices have not been declared to the Department by the above suppliers and they have been "de-registered" in view of non-filing of returns. On investigation made by the Department, it was revealed that the above suppliers are not existing at the addresses given in the invoices. On investigation made by the Department, it was revealed that the above suppliers are not existing at the addresses given in the invoices. Further, at the time of visit, you have furnished the copies of Tax Invoices and Inward Goods Receipts and Inspection Reports (shortly called as 'IRGN') by stating that you have purchased the goods through a "Mediator" and the "Mediator" has supplied the goods with the above invoices which have been taken into your store vide IRGNs. Whereas, you have not furnished any documents with regard to the following :- (1) How did you know the "Mediator" ? (2) What is the name and address of the "Mediator" ? (3) What is the contact number of the "Mediator" ? (4) Did you not cross-verify why goods have been supplied with invoices having different suppliers for a single commodity ? (5) What are the vehicle numbers which have delivered the goods and what is the freight charge ? (6) What acknowledgement has been given for taking delivery of goods ? (7) Who has collected the cheques from you towards payment and what is his name ? (8) What acknowledgement you have obtained at the time of handing-over of cheques ? (9) What is the reason for making payments only in the month of March 2007 on all above purchases when the date of invoices and taking delivery of goods have been on different dates spread into 6 to 7 months older ? When payment is made in the month of March 2007 against delivery of goods made in the month of September 2006, there should be an Agreement/Purchase Order with terms and conditions for delivery of goods and making payments. Further, the quantity of goods purchases is 20,329 and the same has been subjected to "quality assurance", "checking" and "approval" as per your IGRNs. Such being the case, it should necessarily be followed by a "Purchase Order" with "Specifications" and "Terms and Conditions". Whereas, you have failed to furnish the purchase orders and the documents related with the above transactions from the date of placing the order for supply of goods till the date of making payments. Such being the case, your claim of purchase does not amount to "valid purchase" and the Input Tax Credit claimed on above purchase does not amount to "valid input tax credit". Such being the case, your claim of purchase does not amount to "valid purchase" and the Input Tax Credit claimed on above purchase does not amount to "valid input tax credit". It has to be construed that the goods on which you have availed Input Tax Credit are not covered by "Valid Tax Invoices" and the invoices on which you have availed Input Tax Credit are not pertaining to the goods you have received. That means to say, the suppliers on whose tax invoices, you have availed Input Tax Credit, are not the actual suppliers and they are not the dealers of such goods. Hence, your claim of Input Tax Credit of Rs. 3,85,183.00 on the above "invalid tax invoices" has to be disallowed as the VAT collected in the above invoices has not been received by the department and you have not effect a "valid purchase followed by valid tax invoices". Mere having a tax invoice with TIN Number, making payment through cheques does not complete the "process of valid transaction". The aforesaid facts are not disputed in the sense, that the Assessee has not answered the queries of the Assessing Authorities. The aforesaid material makes it very clear that in order to claim benefit of refund of Input Tax, the Assessee has produced these invoices, which do not reflect a genuine transaction. The very fact that the Assessee was not able to answer any one of the fact makes it clear that he knew the truth, he knew what he was doing. Therefore, it is clear that the Assessee knowingly produced invoices, which are not genuine in support of his claim of input tax refund on the basis that he had paid input tax. It is a clear case of evasion of tax. It is not a bona fide act of the Assessee. On proper appreciation of the entire material on record, the Revisional Authority is justified in holding that the First Appellate Authority committed a serious error in imposing penalty on the Assessee. We do not see any infirmity in this order, which calls for our interference. Accordingly, the Appeal is dismissed.