STATE OF KARNATAKA REP. BY THE COMMISSIONER OF COMMERCIAL TAXES V.T.K. BUILDING, GANDHINAGAR BANGALORE - 560009 Vs. M/S R.K. POWERGEN PVT. LTD. 5TH K.M. CHALLAKERE ROAD HIRIYUR-572144 CHITRADURGA DISTRICT

JUDGEMENT

(1.) State of Karnataka is in revision before us under Section 15-A of the Karnataka Tax on Entry of Goods Act 1979 (the Act' for brevity) questioning the correctness and legality of the order passed by the Karnataka Appellate Tribunal, Bangalore on 29-03-2012 in STA Nos. 1614-1618/2008. Under the impugned order by the Tribunal had allowed the appeals of the assessee and had opined that the respondent-assessee has no tax liability in respect of the goods such as twist drills, cutters, reamers, taps etc which the assessee had caused entry into the local area for use, consumption or sale. Tribunal so opined and reversed the orders of the Assessing Authority and the First Appellate Authority, who had taken the view that these goods brought into the local area by the assessee for use, consumption or sale, attract the tax as goods covered under Entry-52 of the I Schedule to the Act. Five appeals before the Tribunal related to the assessment years 2001-02, 2002-03, 2003-04, 2004-05 and 2005-06. This Court at the time of admission of these revision petitions had formulated the following questions of law for examination, which arise out of the order of the Tribunal questioning the correctness or otherwise are required to be examined:

(2.) The assessee is a Company, engaged in manufacture and sale of machines and machine tools. It has its manufacturing Unit at Chennai and causes entry of the subject goods into local area by way of stock transfers from its manufacturing place/Head Office to its branches within the local area for sale and consumption.

(3.) It appears, the question of taxability of these goods as goods covered under Entry-52 of Schedule - I to the Act had been the bone of contention between the assessee and the revenue almost ever since the Act has been legislated and it also transpires that the assessee had experienced fluctuating fortunes in these matters and while the assessee was quite successful in avoiding liability if any under the Act for the assessment years prior to 2000-01. The question of taxability or otherwise of the very goods of the assessee under the provisions of the Act had engaged the attention of this Court in CRP No. 457/2006, a like revision petition for the assessment year 2000-01. But that revision petition was at the instance of the assessee as it transpires that the Tribunal had opined the assessee was liable to pay tax under the provisions of the Act. This revision petition was disposed of by this Court in terms of the order dated 14th September 2007 reported in 14 VST 182 affirming the view taken by the Tribunal and dismissing the revision petition filed by the assessee.