AAF INDIA PRIVATE LIMITED Vs. KBR INDUSTRIES

JUDGEMENT

(1.) This appeal is filed challenging the judgment and decree of dismissal dated 10.08.2018 passed in O.S.No.992/2015 on the file of the Senior Civil Judge and J.M.F.C at Anekal which has been filed for recovery of Rs.10,12,696/- with interest at 18% per annum.

(2.) The parties are referred to as per their original rankings before the Trial Court to avoid confusion and for the convenience of the Court.

(3.) The factual matrix of the case is that the plaintiff is a private limited company incorporated under the Companies Act. The plaintiff is a manufacturer of Air Filters of different grades and supply the same all over India and outside India also. The plaintiff had purchased their input materials from the defendant from time to time and has paid the total consideration including the VAT. It is contended that on the strength of the payments, the plaintiff has taken credit of VAT in their books of accounts as per the VAT procedure and Act and have filed their returns with the Department of Commercial Taxes. On filing their returns quoting the purchase and tax having been paid with the defendant, the plaintiff was surprised to receive proposition notice under Section 39(1) of the Karnataka Value Added Tax Act, 2003 ('the Act' for short), wherein the department of Commercial Taxes have stated that the tax paid by the plaintiff and collected by the defendant has not been remitted to the Commercial Tax Department. Accordingly, the VAT Department have denied the credit of Rs.4,65,593/- for the period April, 2008 to March, 2009 and further a sum of Rs.5,42,103/- for the period April, 2009 to March, 2010 on the ground that the defendant has failed in paying the tax collected from the plaintiff and so also, the defendant has not filed VAT- 100 Returns.