HIND NIPPON RURAL INDUSTRIES PVT. LTD. REPRESENTED BY ITS M.D. VINAY KUMAR PODDAR Vs. THE STATE OF KARNATAKA REP. BY THE COMMISSIONER OF COMMERCIAL TAXES

JUDGEMENT

(1.) THIS Revision Petition is filed by the assessee challenging the concurrent findings of the order passed by the Deputy Commissioner of Commercial Taxes,(Assessments), Bangalore, dated 8.9.2004, which has been confirmed by the Joint Commissioner of Commercial Taxes (Appeals), Bangalore, dt. 13.5.2005 under Section 20(5) of the K.S.T. Act and further affirmed by the Karnataka Appellate Tribunal, Bangalore dt.16.7.2007 in STA 1170/2005.

(2.) THE facts leading to this case are as hereunder: The assesses is a Private Limited Company engaged in the manufacture and export of granites and it is also engaged in the business of hiring of Hydraulic Excavator. The assesses filed the return for the assessment year 2000 -01. The same was perused under Section 12(3) of the Karnataka Sales Tax Act. Earlier there was an order of assessment, which was challenged by the assessee by filing an appeal. The Appellate Court had remanded the matter to the Assessing Officer to consider the case of the assessee afresh. After remand the Assessing Officer passed an order adding of turnover of Rs. 11,26,414/ - under Section 5 -C of the KST Act. Challenging the inclusion of the turnover under Section 5 -C of the KST Act, the assessee filed an appeal before the Joint Commissioner of Commercial Taxes(Appeals), contending that the vehicles and machinery of the appellant -Company were not the subject matter of transfer of right to use the goods as contemplated under Section 5 -C of the Act and that the complete control of the vehicles and machinery including the possession was with the assessee and there was no transfer of property of goads in the hands of its customers. Therefore, it was contended that the turnover of Rs. 11,26,414/ - under Section 5 -C of the KST Act, could not have been considered by the Assessing Officer and the said amount is exempted from tax. The contention of the assessee was turned down by the Appellate Authority. Accordingly, the Joint Commissioner of Commercial Taxes(Appeals), dismissed the appeal of the assessee on 13.5.2095. Aggrieved by the same, the assessee filed a second appeal before the Karnataka Appellate Tribunal, Bangalore in STA No. 1170/2005. The Tribunal after hearing the parties, formulated the following points for its consideration: 1) Whether the Assessing Authority is justified in levying tax under Section 5 -C of the KST Act on the turnover of Rs. 11,26,414/ - and Whether the First Appellate Authority is justified in confirming the same.

(3.) THOUGH two questions are formulated, according to us, only the first question would be sufficient as the second question formulated by the assesses is in regard to the order passed by the Joint Commissioner of Commercial Taxes (Appeals) and the order of the Karnataka Appellate Tribunal. According to us, if the first point is held in favour of the assesses, there is no necessity to consider the 2nd point. Therefore, we would like to consider the question No. 1 as hereunder: In order to appreciate the contentions of both the parties, it would be necessary for us to refer to the facts of this case. According to the assessee certain machineries and vehicles of the assessee were permitted to be used by its customers, M/s Mysore Construction Company. The Mysore Construction Company had under taken the construction activities in different places. Accordingly, the machineries of the assessee were dumped into the site of the Mysore Construction Company. The assesses has not produced any agreements entered into between the assessee and the Mysore Construction Company to show the nature of transaction in order to find out whether the assessee had only permitted the Mysore Construction Company to utilise the vehicles and machineries under the supervision and control of the assessee or not. In order to contend that the effective control of the vehicles and machinery was with the assessee and there was no transfer of right to use goods of M/s Mysore Construction Company, the assessee has relied upon only the bills raised by it on Mysore Construction Company. Therefore, it is clear that the Assessing Officer was required to consider the case of the assesses to bring the transaction within Section 5 -C of the Act, only based on the bill raised by the assesses and not on other materials, since the assessee has failed to produce necessary documents.