ASHOKA CREATIONS PVT. LTD. Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) This revision petition is directed against the order passed by the Karnataka Appellate Tribunal confirming the findings recorded by the authorities holding that the petitioner is liable to pay purchase tax under section 6 of the Karnataka Sales Tax Act, 1957 (for short, hereinafter referred to as, "the Act").

(2.) The petitioner is a dealer registered under the provisions of the Gujarat Sales Tax Act, 1969 and also under the provisions of the Central Sales Tax Act, 1956. The registration certificate produced as annexures K and L discloses that he is carrying on the business as "re-seller". Further it is disclosed that he is carrying on the business of re-sale of ball bearing copper wire. He is not registered as a dealer under the Karnataka Sales Tax Act, 1957. In pursuance of the notice of sale of assets of M/s. Powerflow Ltd., Bangalore, issued and published in the Economic Times dated September 3, 2003 by the official liquidator attached to the High Court of Karnataka, the petitioner made a bid. The petitioner was declared the successful bidder for the plant and machinery by virtue of an order passed by this court in O. L. R. No. 89 of 2004 confirming the sale of machinery which was handed over to the petitioner on March 13, 2004. The sale certificate dated March 13, 2004 came to be issued stating that the plant and machinery was sold for a consideration of Rs. 101 lakhs to the petitioner. The sale of goods was effected by the official liquidator who sold the property of M/s. Powerflow Ltd., which has gone into liquidation. Therefore, the official liquidator was not a dealer as defined under section 2(1)(k) of the Act and he could not have collected any sales tax. Accordingly, it was not so done.

(3.) A notice was issued to the petitioner calling upon him to get himself registered as a non-residential dealer and pay tax on the aforesaid purchase. In reply to the same, it was contended by the petitioner that as he was not carrying on any business in the State of Karnataka, there was no necessity to get himself registered as a dealer under the Act. As the purchase of the aforesaid machinery was only a solitary transaction he was not liable to pay tax and therefore, he denied payment of tax. The assessing authority considered the aforesaid objections and held that the petitioner being a dealer, had not registered under the Act though he had purchased from an unregistered dealer and the machinery in question had not suffered tax under section 5 of the Act and was therefore liable to pay tax under section 6 of the Act. Aggrieved by the said order, the assessee preferred an appeal before the Joint Commissioner of Commercial Tax who upheld the order of the assessing officer and dismissed the appeal. Aggrieved by those two orders, the assessee preferred an appeal before the Karnataka Appellate Tribunal, Bangalore. The Appellate Tribunal after considering various decisions cited by the petitioner in support of his case came to a conclusion that section 9 of the Act is attracted. The goods after purchase were transferred outside the State of Karnataka. It had not suffered tax in Karnataka as the machinery was transferred outside Karnataka other than by way of sale. Section 6(2) squarely applied to the case of the petitioner and therefore, it dismissed the appeal. Against these concurrent findings, the petitioner is before this court.