TRACTORS AND FARM EQUIPMENT LIMITED RAHEJA CHAMBERS, NO. 12 MUSEUM ROAD BANGALORE - 560001 Vs. THE STATE OF KARNATAKA REPRESENTED BY THE COMMISSIONER OF COMMERCIAL TAXES VANJIYA THERIGE KARYALAYA-1 GANDHINAGAR, BANGALORE - 560009

JUDGEMENT

(1.) The petitioner is a company incorporated under the Companies Act, 1956 and is a registered dealer under the provision of Karnataka Tax on Entry of Goods Act, 1979 (hereinafter referred to as 'KTEG Act') filed this revision petition being aggrieved by the order dated 6-4-2010 passed by the Karnataka Appellate Tribunal dismissing the appeal and confirming the order passed by the First Appellate Authority as well as the Assessing Authority for the assessment year 1999-2000.

(2.) The petitioner is engaged in the business of manufacture and sale of tractors. During the course of his business, he caused entry of various raw materials, component parts and inputs, which include tyres, tubes and flaps which are used as parts of tractors manufactured by the petitioner. The petitioner filed the returns on 29-4-2000 for the assessment year 1999-2000, declaring the total turnover and also taxable turnover and paid tax of Rs.1,86,18,500/-. The Assessing Authority after due verification of the books of accounts and documents held that the assessee is liable to pay tax of Rs.73,30,625/-. Then only the assessee realized that he has remitted excess tax of 1,10,87,875/-. The assessee was under the impression that the raw materials, inputs, component parts used for manufacturing of the tractors are taxable and accordingly paid the tax. Subsequently he came to know that the raw materials, inputs and parts of the tractors are the agricultural machinery and they are exempted from payment of entry tax. Since there is a dispute with regard to the fact whether the tractor is agricultural machinery or not? In view of that, he had paid the entry tax. He has filed a petition for refund of the excess tax paid by him. In the meantime, the Assessing Officer initiated the proceedings under Section 3-BB of the KTEG Act. The excess amount was confiscated on the ground that the said amount has been collected from the consumers and hence the assessee is not entitled for refund of the said amount. Holding that collection of tax is contrary to Section 3-A of the Act, the Assessing Officer issued show cause notice to the assessee. The assessee filed detailed objections to the said notice and also brought to the notice of the Assessing Officer that since there is a dispute with regard to the fact whether the tractor manufactured by the assessee is an agricultural machinery or not is pending consideration, he continued to pay the tax. The said dispute has been settled in a judgment reported in 106 STC 309 (RAJA MOTORS v/s ADDITIONAL DEPUTY COMMSSIONER OF ENTRY TAXESCUM- COMMERCIAL TAXES, ASSESSMENTS-III, BANGALORE CITY) and this court held that the tractor is an agricultural machinery and is exempted from the tax. Further, the petitioner has contended that they have not collected any tax from their customers. Hence, they are entitled for the refund of the excess tax paid by them.

(3.) The Assessing Authority after considering the objections filed by the assessee held that no materials has been produced before the authorities to show that the assessee has neither collected any amount of tax under the Act nor passed on the burned of tax liability on the consumers and also held that collection of tax is contrary to Section 3-A of the Act. Hence, forfeited the excess amount paid by the assessee to the State Government by its order dated 30-05-2002. The assessee being aggrieved by the order dated 30-05-2002 filed an appeal before the Joint Commissioner of Commercial Tax (Appeals) (hereinafter referred to as 'First Appellate Authority') in AP.10/2002- 03. The First Appellate Authority after considering the matter by its order dated 20-12-2002 dismissed the appeal holding that the assessee has failed to establish that they have not passed on the entry tax burden to their customers. Being aggrieved by the order passed by the First Appellate Authority, the assessee preferred STA No.542/2003 before the Karnataka Appellate Tribunal. The Appellate Tribunal by its order dated 6-4-2010 dismissed the appeal and confirmed the order passed by the First Appellate Authority as well as the Assessing Authority. Being aggrieved by the order dated 6-4-2010, the assessee preferred this revision petition.