SAKTHI MASALA (PRIVATE) LIMITED Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) THE assessee -M/s. Shakthi Masala Private Limited has filed STA Nos. 34 and 36 to 69 of 2012 challenging the order dated 17 -2 -2012 passed by the Additional Commissioner of Commercial Taxes in No. SMR/KVAT/APP/2/CR -05/2011 -12 in exercise of its power under Section 64(1) of the Karnataka Value Added Tax Act, 2003 setting aside the order passed by the First Appellate Authority confirming the order passed by the Assessing Authority, for the assessment years January 2007 to November 2009. The State Government filed STRP Nos. 77 and 134 to 142 of 2010 and STRP Nos. 196 and 7 to 17 of 2012 being aggrieved by the order dated 31 -3 -2010 and 9 -7 -2010 made in STA Nos. 2174 to 2183 of 2009 (M.T.R. Foods Private Limited, Bangalore v State of Karnataka 2010(68) Kar. L.J. 585 (Tri.) (DB)) and STA Nos. 380 to 391 of 2009 (Eastern Condiments (Private) Limited, Bangalore v State of Karnataka : 2010 (69) Kar. L.J. 493 (Tri.) (DB)) respectively passed by the Karnataka Appellate Tribunal, setting aside the order passed by the Assessing Authority holding that the assessee is liable to pay tax at the rate of 4% on Masala powder by setting aside the penalty and interest imposed, for the assessment year December 2006 to September 2007 and for the assessment year January 2007 to December 2007 respectively.

(2.) SINCE the common question of law and facts are involved in these appeals and revision petitions, all these cases are clubbed together and disposed off by this common order.

(3.) STRP Nos. 77 and 134 to 142 of 2010 are filed by the State Government being aggrieved by the order dated 31 -3 -2010 passed by the Karnataka Appellate Tribunal in STA Nos. 2174 to 2183 of 2010 (M.T.R. Foods Private Limited's case). The respondent -M.T.R. Foods Private Limited is a private limited company registered dealer under the provisions of KVAT Act engaged in the manufacture and sale of Masala Powders, instant food, food mixture, sweet, pappad, pickles and masala powders constituted mixture of spices and materials like salt, pulse, oil and rice items. For the assessment year December 2006 to September 2007, the assessee claimed the benefit of Government Notification dated 19 -12 -2006 and paid tax at the rate of 4% as against 12.5%. The Assessing Authority initiated reassessment proceedings under Section 39(1) of the Act and issued notice to the assessee. After hearing the assessee, the Assessing Authority passed an order on 21 -3 -2009 calling upon the assessee to pay the balance tax under the KVAT Act with penalty and interest. Being aggrieved by the assessment order dated 21 -3 -2009, the assessee preferred an appeal before the Joint Commissioner of Commercial Taxes (Appeals). The Appellate Authority by its order dated 26 -9 -2009 dismissed the appeal confirming the order passed by the Assessing Authority. The assessee being aggrieved by the order passed by the First Appellate Authority as well as the Assessing Authority, preferred an appeal before the Karnataka Appellate Tribunal contending that the order passed by the Assessing Authority as well as the First Appellate Authority is contrary to law. As per the Government notification dated 19 -12 -2006, for sale of spices in the form of Masala Powder being the mixture of one or more spices, they are liable to pay tax at the rate of 4%. The Appellate Authority, by its order dated 31 -3 -2010 allowed the appeal and set aside the order passed by the First Appellate Authority as well as Assessing Authority and held that the Assessee is liable to pay tax at the rate of 4% in respect of sale of masala powder. Being aggrieved by the order dated 31 -3 -2010, the State Government has preferred these revision petitions.