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2015 DIGILAW 281 (KAR)

Nanjundeshwara Traders v. State Of Karnataka

2015-03-12

ARAVIND KUMAR

body2015
Judgment : 1. Heard Sri Thirumalesh, learned Advocate appearing for petitioner and Sri Vedamurthy, learned HCGP appearing for respondents. 2. Petitioner is questioning the re-assessment orders dated 06.05.2014 passed under Section 39(2) read with Sections 72(2) and 36/37 of the Karnataka Value Added Tax Act, 2003 (for short 'KVAT Act') for the assessment years 2010-11 and 2011-12 - Annexures-J & K respectively. 3. Though these writ petitions are liable to be dismissed on the short ground that petitioner has not availed alternate and efficacious remedy available under Section 62 of KVAT Act, this Court has not adopted such course for the simple reason, petitioner has unequivocally undertaken before this Court to deposit entire disputed tax before respondent - authority and for the limited purpose of ascertaining as to whether input tax deduction claimed by petitioner which has been disallowed by respondent - authority on the ground that invoices produced by petitioner claiming such input tax is based on fake or duplicate invoices, matter is taken up for consideration and disposed of by this order. 4. Perusal of the impugned orders would indicate that petitioner- assessee had claimed in put tax credit on the purchases made from M/s.KRS Coco Products and M/s Agro Coconut products, Tiptur and in respect of invoices for the periods indicated in the impugned orders, in respect of which input tax of Rs.2,79,884/- and Rs.7,600/- had been availed as credit and in the re- assessment proceedings, said transactions came to be verified by the assessing officer and found that supplying dealer had declared Nil returns/declared local sales turn-over and same is not tallying with e-sugam utilised by the said dealers. It is also found by the assessing officer that input tax credit claimed by the dealer is not remitted by the supplying dealer to the Government and turnover declared by the supplier was not found included in the sales turnover of dealer. It was also found by the assessing officer that invoices produced by the petitioner - assessee seeking input tax credit was based on false invoices. Hence, assessing officer held that deduction of input tax claimed by petitioner is not required to be allowed. It was also found by the assessing officer that invoices produced by the petitioner - assessee seeking input tax credit was based on false invoices. Hence, assessing officer held that deduction of input tax claimed by petitioner is not required to be allowed. It is also held by assessing officer that unless the tax invoice, debit note or credit note in relation to a sale has been issued in accordance with Section 29 and same being in conformity with Section 10(4) of the Act, input tax credit claimed by assessee cannot be allowed. Assessing Officer has also found that petitioner-assessee has not proved that supplying dealer has remitted the amount relating to input tax claim to the Government. 5. It is the grievance of Mr.Thirumalesh, learned Advocate appearing for petitioner in these petitions that opportunity was not extended to the petitioner to substantiate its claim with regard to genuineness of the invoices produced by it and on account of said opportunity having been denied to the petitioner by the assessing officer in the re-assessment proceedings, input tax credit claimed by petitioner her been erroneously disallowed. Hence, he submits that if an opportunity is extended to the petitioner, it would demonstrate before the assessing officer that documents produced and claim for input tax credit made is in conformity with the statutory provisions of KVAT Act namely, Section 10(4) and Section 29 of the Act and petitioner would also discharge the burden cast on him under Section 70 of the Act. 6. Sri Vedamurthy, learned HCGP would support the impugned orders at Annexures-J & K and prays for dismissal of these writ petitions. 7. Having heard the learned Advocates appearing for the parties and on perusal of impugned orders at Annexures-J & K, it would indicate that petitioner had claimed input tax credit for the period May and June, 2010 and had availed input tax credit to the tune of Rs.2,79,884/- and for the tax period of August, 2011 a sum of Rs.7,600/- respectively. Said claim came to be disallowed by the assessing officer after verifying the records and finding that invoice which was relied upon by petitioner to claim input tax credit is a bogus invoice or a false invoice. Said claim came to be disallowed by the assessing officer after verifying the records and finding that invoice which was relied upon by petitioner to claim input tax credit is a bogus invoice or a false invoice. In other words, assessing officer has found that in the turnover declared by the supplying dealer of the assessee for the remaining tax periods are not tallying with e-sugam utilised by the said dealer which was in respect of invoice relating to input tax credit claimed for by petitioner. Since burden is cast on the assessee under Section 70 of the Act, to prove that claim for deduction of input tax is correct or is based on the document prescribed under Section 10 of the Act, it is needless to state that said burden has to be discharged by the petitioner alone. In view of the fact that assessing officer has arrived at a conclusion that input tax credit claimed by the petitioner is based on a false invoice even prior to extending opportunity to the petitioner to prove otherwise, said conclusion arrived at by the assessing officer requires to be interfered and matter requires to be remitted back to the assessing officer for being adjudicated by extending opportunity to the petitioner. 8. Hence, for the reasons aforesaid, I proceed to pass following: (i) Writ petitions are hereby allowed. (ii) Impugned orders dated 6.5.2014 at Annexures-J & K are hereby set aside to the extent noticed hereinabove. (iii) Matter is hereby remitted back to the assessing officer - third respondent for being re-adjudicated in so far as input tax credit claimed by petitioner for Rs.2,79,884/- and Rs.7,600/- only and subject to petitioner depositing said sum of Rs.2,79,884/- and Rs.7,600/- within a period of one week from today before third respondent. On such deposit being made, assessing officer shall re-examine said issue relating to disallowance of input tax credit and pass orders on merits. Proceedings shall take place if necessary, on day to day basis and at any rate it shall be disposed of within two weeks from the date of appearance of petitioner which is fixed on 19.03.2015 at 3.00 p.m. It is also made clear that all other findings recorded by the assessing officer under impugned orders are not disturbed. (iv) Third respondent is not required to issue any fresh notice to petitioner. Ordered accordingly.