SUNWEAR 1ST FLOOR, SONA TOWERS 71, MILLERS ROAD BANGALORE 560 052 REPRESENTED BY ITS PARTNER SHRI. C.S. SUBRAMANIAN Vs. THE STATE OF KARNATAKA REP. BY ITS FINANCE SECRETARY VIDHANA SOUDHA BANGALORE 560 001 AND ADDITIONAL COMMISSIONER FOR COMMERC

JUDGEMENT

(1.) The appellant is a dealer registered under the provisions of the Karnataka Sales Tax Act, 1957 (for short hereinafter referred to as 'the Act'). The assessment period is for the year 1998-99. The assessee while filing his return of turnover had claimed certain exemptions in respect of the purchases on goods which figured in Entry 3 of Fifth Schedule of the Act such as :-

(2.) The Joint Commissioner in exercise of his powers u/s.21(2) of the Act proposed to revise this order on the premise that, when the assessee has not made good his claim for exemption as, he being a dealer in manufacturing of hosiery could have used for manufacturing purposes and might not have sold it as free flowing cloth and therefore, show cause notice dt. 30.3.2001 was issued to the assessee. The assessee responded to this notice reiterating that he is entitled for exemption etc.

(3.) The Joint Commissioner in terms of his order dated 24.7.2004 dropped the show cause notice being of the opinion that he was now convinced with the assessee having sold fabrics/textiles and as the show cause notice was merely on a hunch, that it might have been used in the manufacture of hosiery etc and opined that as the assessee had satisfied him that it has been sold as it is, no need to disturb the assessment order.