STATE OF KARNATAKA Vs. KOTAK MAHINDRA PRIME LTD.

JUDGEMENT

(1.) This appeal is filed by the Revenue being aggrieved by the order passed by the Karnataka Appellate Tribunal wherein the appeal filed by the respondent challenging the order passed by the revisional authority has been allowed by holding that the respondent therein is entitled to the transitional relief permissible under section 18 of the Karnataka Value Added Tax Act, 2003 and thereby set aside the order passed by the revisional authority dated March 24, 2007 and restored the order dated August 1, 2005 passed by the Assistant Commissioner of Commercial Taxes under rule 166(7) and the respondent was granted benefit of adjustment of the amounts as indicated in form VAT 270 dated August 3, 2005 issued therein. The material facts of the case necessary for the disposal of this appeal are as follows :

(2.) We have heard the learned Government Advocate appearing for the revision-petitioner and the learned counsel appearing for the respondent. The learned Government Advocate submitted that section 18 is not applicable to the respondent as the respondent is not manufacturing or reselling the vehicle but is only leasing the vehicle which is deemed to be a "sale" and multi-point revision tax has been imposed under the Act and therefore, the question of giving any deduction does not arise. He further submitted that even assuming that section 18 is applicable, since there is no resale of the vehicle and there is only lease, having regard to the provisions of section 11 of the Act, the provision of section 18 would not be applicable and the revisional authority, after detailed reasoning, has held that the respondent is not entitled to the benefit under section 18 of the Act and the order of the Tribunal setting aside the said order and restoring the benefit granted by the assessing officer is erroneous.

(3.) The learned counsel appearing for the respondent submitted that admittedly, the respondent-assessee has paid sales tax and also value added tax under the Act in respect of vehicles purchased and leased during the period from April 1, 2004 to March 31, 2005 and since in view of the transitional provision applicable for the said period, an application was filed claiming benefit of section 18 of the Act wherefore the assessing officer was justified in allowing the application by granting the benefit. As the said benefit was available only for a limited period from April 1, 2004 to March 31, 2005, the assessee had been paying both sales tax and value added tax for the subsequent period, and has not claimed any benefit subsequent to the period March 31, 2005 and therefore, the order passed by the Tribunal restoring the order passed by the assessing officer by setting aside the order of the revisional authority, was justified.