NANDAKISHORE INDUSTRIES Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) THE appellant herein is a dealer registered both under Karnataka Sales Tax Act, 1957 and central Sales Tax Act, 1956 (for short referred to as KST and CST Act ).

(2.) ONE M/s. Indumathi Industries had got the financial assistance from Karnataka State Financial corporation (KSFC ). The said unit was carrying on the business of manufacture and sale of fried gram. The appellant herein purchased the said small scale industrial unit (SSI) in a public auction and had been put in possession of the same on 25. 11. 1992 by K. S. F. C.

(3.) THE appellant, while filing the annual returns for the assessment year 1993-94 had claimed exemption from payment of tax under the KST Act and also under the Central Act under a bonafide belief that it is a new industrial unit and therefore, was entitled for the benefit of the notification issued by the State Government bearing No. FD 101 CSI 87 (1) dated 7. 6. 1989. The claim of the appellant was rejected by the assessing authority while concluding the assessment by its order dated 5. 7. 1995. Aggrieved by the same, the appellant had preferred an appeal by producing the necessary certificate. The appellate authority by its order dated 15. 12. 97 allowed the appeal holding that the appellant was eligible for benefit of the notification till 7. 6. 1994. The appellate authority further held that the appellant was entitled for incentive benefits as well upto 50% of the tax liability. Taking exception to this order of the appellate authority, the Addl. Commissioner of Commercial Taxes, Davanagere issued a notice under Section 22-A (1) of the kst Act. The appellant/assessee, after service of notice regarding proposal to set aside the order passed by the appellate authority filed objections contending that the order of the appellate authority was not prejudicial to the interest of the revenue. The appellant/ assessee further contended that no reason was assigned in the said notice proposing revision of the order passed by the appellate authority. However, the revisional authority held that the appellant/assessee was not entitled for such claim as the industrial unit which was purchased by the present appellant was not a new unit but an old unit. Aggrieved by the said order of the Addl. Commissioner of Commercial Taxes, the present appeal is filed before us.