IBEX ENGINEERING PVT LTD BANGALORE Vs. STATE OF KARNATAKA THROUGH THE COMMISSIONER OF COMMERCIAL TAXES BANGALORE

JUDGEMENT

(1.) This appeal by the dealer, registered under the provisions of the Karnataka Value Added Tax Act, 2003 (for short hereinafter referred to as 'the Act'), u/s.66(1) of the Act of the common order dated 6.5.2009 passed by the Addl. Commissioner of Commercial Taxes Zone-1, Bangalore, exercising his revisional jurisdiction u/s. 64(1) of the Act revising the Appeal order VAT/AP Nos.1544, 1545, 1546, 1547, 1548, 1549, 1550, 1551, 1552, 1553, 1554 & 1555/07-08 dated 7.7.2008. Insofar as the present appeal by the dealer is concerned, it is mainly for setting aside the order of the Commissioner two aspects; such as, the correctness of the order of the Commissioner and insofar as it relates to the Commissioner taking the view that the order passed by the Joint Commissioner exercising appeal jurisdiction is erroneous for the reason that the dealer/assessee who had claimed certain sales in respect of what is known as moulds manufactured by it for the purpose of manufacturing a product which was exported to the foreign buyer and which was claimed as an export sale insofar as manufacture of mould is concerned, for which the dealer had received payment in advance called as 'tool development charges' amounts to a sale transaction attracting Section 4 of the Act for the reason that the goods i.e. the moulds were never actually exported, but remained with the dealer?

(2.) The second question is, as to whether the permanent wire tightener manufactured by the assessee is one classifiable within the scope of Entry No. 67 of Schedule 3 to the Act as aluminum extrusions or if it is not so fitting into this Entry, it has to be subjected to tax as residuary entry taxable at the general rate of tax in terms of Section 4(1)(b) of the Act.

(3.) It is because the Commissioner took the view that the value received by the dealer from its foreign business associate amounted to sale price of the moulds and being not an export, even as conceded by the appellant, it was to be subjected to tax u/s. 4 of the Act and therefore, restored such action of the Assessing Authority which had been set aside by the Appellate Authority and even in respect of the levy of tax on permanent wire tightener as one covered under the residuary entry in terms of Section 4(1)(b) of the Act as against the Appellate Authority's view that permanent wire tighteners should have been subjected to tax at the rate as is applicable in respect of Entry 67 Schedule 3 to the Act and with reference to Section 4(1) (a) of the Act, the claim of the assessee was found to be not tenable by the Commissioner and order passed by the appellate authority was set aside and here again the original assessment was restored. The assessee is in appeal on these two aspects.