BPL LIMITED Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) THE petitioner, a manufactures of electronic goods, is a registered dealer under the Karnataka Tax on Entry of Goods Act, 1979, (Act KTEG for short ).

(2.) FOR the assessment year 1996 1997 (01. 04. 1996 to 31. 03. 1997), the petitioner field a return on 30-05-1997, subsequently revised on 29-02-2000, returning a taxable turnover of Rs. 227,84,17,826/ -. The Assessing notice dated 02-03-2003 proposing a taxable turnover of Rs. 462,03,58,237/ -. The petitioner filed objections dated 28-03-2000. One of the objections related to the valuation of goods for the purpose of levy of entry tax under the Act. The Assessing Authority passed an order of assessment dated 31-03-2000 determining the taxable turnover as Rs. 378,24,78,447/- and Entry Tax payable as Rs. 4,42,0l,754/ -.

(3.) THE petitioner is aggrieved by the valuation of the goods adopted for the purpose of levy of entry tax under the Act. The petitioner submits that as per the motivate scheme formulated under the provisions of Central Excise Act, 1944 and the Central Excise Rules, 1944, a manufacturer is entitled to a credit of the excise duty paid on the inputs used in the manufacture of final products. The petitioner contends that under the modvat scheme, it is entitled to modvat credit on all eligible inputs received by it in its factory for manufacture of final products, that it is entitled to utilise such credit, for payment of excise duty on the final products manufactured by it; and that therefore it is entitled to deduct the modvat credit amount availed by it, namely Rs. 57,65,64,844/-, from the total value of goods, entry of which is caused by it into the local area, to arrive at the value of goods that can be subjected to entry tax. Elaborating the said content, it is submitted that though it pays a particular price for the goods (purchased by it for being used in the manufacture of final production the entry of such goods within the local area and entry in its factory premises, it has an indefeasible right to take a credit in respect of the excise duty paid on the said goods; and therefore, the value of the goods for the purpose of entry tax is the price at which it purchased the goods including the cost of transport, packing, forwarding and handling charge, commission, insurance, taxes, duties etc. less the modvat credit for excise duty availed by it under the provisions of Central Excise Rules.