SIDDESHWARA AND CO Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) THESE petitions, which have been filed under Section 23 (1) of the Karnataka Sales Tax Act, 1957 (in short "the Act"), are directed against the order dated July 31, 2001 passed by the karnataka Appellate Tribunal.

(2.) THE petitioners are dealers in arecanuts. Their place of business is situated at Bhimasamudra town in the district of Chitradurga. They are duly registered under the provisions of the KST Act as well as the Central Sales Tax Act, 1956 and they make purchases from the registered dealers as well as unregistered dealers.

(3.) FOR the assessment year in question, i. e. , 1994-95, the petitioners by relying on the notification' dated March 31, 1984, claimed exemption in respect of sales of arecanuts, which they had admittedly sold in the course of inter-State trade or commerce, but the same was denied by the assessing officer and confirmed by the first appellate authority as well as the Tribunal. The reason for denial of exemption was that the stocks of arecanuts, which were sold in the course of inter-State trade or commerce, had not suffered any tax under the KST Act since the three main sellers from whom the petitioners purchased arecanuts were found to be bogus. Secondly, as of fact as borne out from the records, the petitioners attempted to evade legitimate tax. Since the assessing authority having found the entire transaction of purchase of arecanut from the three registered dealers to be fraudulent, the petitioners were subjected to penalty as well under Section 9 (2) of the CST Act read with Section 6a (3) of the KST Act. As could be immediately made out from the bare reading of the Tribunal's order, before coming to a conclusion that the transactions of purchase from three alleged dealers were crude devices to defraud the Revenue, department did fool proof investigation and had given appropriate opportunity of rebuttal to the petitioners. Therefore, there is hardly any ground for this Court to intervene with the said finding.