LAWS(KAR)-2014-11-315

STATE OF KARNATAKA Vs. KOTHARI SALES AND AGENCIES

Decided On November 05, 2014
STATE OF KARNATAKA Appellant
V/S
Kothari Sales And Agencies Respondents

JUDGEMENT

(1.) The Revenue has preferred these revision petitions challenging the order passed by the Karnataka Appellate Tribunal which has directed the assessing authority to treat the respondent as a registered dealer for the tax period April 2005 to February 2007 and to refund the input tax. The assessee is a registered dealer under the provisions of the Karnataka Value Added Tax Act, 2003 (for short, hereinafter referred to as "the Act"), with R.C. No. 25733606 on the file of the Commercial Tax Officer-II, Mysore. The business premises was located at No. 6, Annamma Choultry Complex, D.D. Urs Road, Mysore. Thereafter the place of business was shifted to No. 2929/1B, Gokulam Main Road, Next to Royal Brigade Apartments, V.V. Mohalla, Mysore. The assessee's business premises during the tax periods April 2005 to March 2006 and April 2006 to February 2007 was not informed to the Department. The assessee is engaged in the business of retail sale of air-conditioners, voltage stabilizers and other air-conditioning accessories. He is also carrying on annual maintenance contract to the customers, which includes labour and service and sale of components/parts for the maintenance of air-conditioners. The prescribed authority took up visit audit on January 16, 2010 and called for production of books of accounts from April 2005 to September 2009 for verification. The assessee had not registered himself under the Act. Therefore the assessing authority treated the respondent as unregistered dealer and he was assessed to tax under section 38(7) of the Act and also penalty was levied under section 73(1) of the Act. Aggrieved by the said order, the assessee preferred an appeal with the first appellate authority, which dismissed the same. It also directed the assessing authority to levy interest under section 36 of the Act. Aggrieved by these two orders, the assessee preferred an appeal to the Tribunal. The Tribunal allowed the appeal in part, affirming the order regarding penalty and interest, but directed the assessing authority to treat the respondent as a registered dealer for the tax periods from April 2005 to February 2007 and to refund the input tax, thereafter to compute the penalty and interest for the balance amount and to levy tax in accordance with law. Aggrieved by the said order, the Revenue is in appeal.

(2.) The learned counsel for the Revenue, assailing the impugned order contends, when admittedly no returns were filed for the period from April 2005 to February 2007 in VAT 100 specifying the input tax and the output tax, the question of giving credit to the input tax would not arise, much less refund of the input tax. The Tribunal was in error in holding that during the relevant period the assessee cannot be treated as an unregistered dealer and the direction to refund the input tax is contrary to section 10 of the Act.

(3.) Per contra, the learned counsel appearing for the assessee submitted, admittedly the assessee was a registered dealer under the Karnataka Sales Tax Act. After coming into force of the Act, there was no obligation on the part of the assessee to file form No. I. The assessee was given a temporary TIN number under the Act and merely because an application was filed on March 28, 2007 for giving regular number, the authorities were not justified in treating the assessee as an unregistered dealer during the period from April 2005 to February 2007 and therefore the Tribunal was justified in passing the impugned order for refund of tax and therefore he submits, no case of interference is made out.