J.C. Agencies vs The Additional Commissioner of Commercial Taxes

K.L. Manjunath, J.—Though the appeal is admitted, the substantial question of law has not been framed at the time of admission of the appeal. Having heard the Counsel for the parties, we are of the view that the following substantial question of law arise in this appeal.--

Whether the Additional Commissioner for Commercial Tax was justified in reversing the findings of the Appellate Authority on the ground that the Appellate Authority did not verify the original tax invoices said to have been produced by the appellant?

The facts leading to filing of this case are as follows.--

The dispute is for the assessment year 2005-06. The appellant is a registered dealer under the Karnataka Value Added Tax Act, 2003. The reassessing authority noticed that the appellant had claimed excess input tax credit of Rs. 17,361/-. Accordingly, the claim of the appellant was disallowed. Consequently, a penalty u/s 72(2) and interest and Section 36 of the KVAT were levied.

Aggrieved by the order an appeal was filed before the Appellate Authority. The appellant produced Xerox copy of the purchase invoice from M/s. Godrej Consumer Product Limited, Bangalore, to show that he had paid tax and that he is entitled to recover the same from his purchaser. Accordingly, he claimed rebate of the input tax paid by him. The contention of the appellant was accepted by the Appellate Authority. Accordingly, the appeal came to be allowed.

The Additional Commissioner, who is vested with suo motu revision power by exercising powers vested in, initiated suo motu proceedings. He allowed the revision petition on the ground that the appellant had not produced original input tax invoice. Therefore, the present appeal is filed.

Admittedly, the appellant is said to have purchased the goods from M/s. Godrej Consumers Products Limited, Bangalore, whether he had paid the input tax and whether he had produced original invoice before the Appellate Authority or not. The Revisional Authority could have summoned the documents from the respective parties and find out whether there is a loss of revenue or not. Without doing so, only on an inference that original invoice has not been produced by the appellant. He had allowed the suo motu revision. Therefore, we are of the view that the procedure followed by the Additional Commissioner is bad in law and liable to be set aside. It was not so difficult for the Revisional Authority to verify whether input tax was really paid by the assessee to M/s. Godrej Consumer Products Limited, Bangalore. Without doing so, he has allowed the revision petition, which, according to us, is bad in law. In the result, without answering the substantial question of law framed by us, we set aside the order passed by the Revisional Authority and remand the matter him to reconsider the case afresh and it is always open for the appellant to secure the records from M/s. Godrej Consumers Products Limited, Bangalore, to satisfy himself whether the input tax was really paid by the assessee or not.

Accordingly, this appeal is allowed and the matter is remanded to the Revisional Authority for fresh consideration in accordance with law.