STATE OF KARNATAKA Vs. INFOSYS TECHNOLOGIES LIMITED

JUDGEMENT

(1.) These petitions are preferred by the State/Revenue challenging the order passed by the Karnataka Appellate Tribunal holding that the goods purchased by the assessee under the nomenclature of 'Work Station' are not items of furniture, they are accessories to the various computer peripherals and the computer itself which are housed at work stations and therefore, the assessee is entitled to 'input tax credit'. The assessee is engaged in the business of development and sale of computer software besides also being engaged in various technical consultancy services. During the course of audit visit by then Assessing Authority on 8-12-2006, it was found that the assessee has claimed input tax under the nomenclature of work stations. The Assessing Authority disallowed such input tax on work stations considering them as input tax restricted goods falling under Entry 5 of the Fifth Schedule read with Section 11(a)(2) of the Karnataka Value Added Tax Act, 2003 (for short, hereinafter referred to as 'KVAT Act'). Against the said order of assessment, the assessee preferred first appeal before the First Appellate Authority. The First Appellate Authority by its order dated 18-7-2007 dismissed the appeal confirming the assessment orders. The assessee challenged the correctness of this order before the Karnataka Appellate Tribunal. The Karnataka Appellate Tribunal by its judgment dated 19-1-2010 allowed all the appeals of the assessee holding that work stations are accessories of technical goods viz., of computer/computer peripherals falling under Entry 3 of Fifth Schedule read with Section 11(a)(2) of the KVAT Act, 2003.

(2.) Being aggrieved by the said judgment, the revenue has preferred STRP Nos. 7 and 103 of 2011 while STRP No. 18 of 2010 is preferred by the assessee.

(3.) The revisions petitions came to be admitted to consider the following substantial questions of law: