SHEKAR BHOJANNA S/O BHOJANNA P.A. HOLDER, YAMAHA MOTORS INDIA (P) LTD. Vs. THE STATE OF KARNATAKA, THE COMMISSIONER OF COMMERCIAL TAXES

JUDGEMENT

(1.) THE petitioner has challenged the order dated 21.01.2009 passed by the Karnataka Appellate Tribunal in STA No. 249/2007.

(2.) THE petitioner is a private limited company -engaged in the business and distribution of Yamaha Motor Cycles and is transporting the vehicles from Faridabad to Bangalore, The vehicles are said to have been delivered to the dealers. The freight charges were not included in the invoice raised by the local dealers. The authorities during the course of the audit noticed that the assessee had charged and collected VAT charges @ 12.5% separately in the tax invoice on the basic value of the goods and that the same was not in accordance with Rule 3(2) of the KVAT Rules 2003 (hereinafter referred to as the Rules'). On issue of notice by the authorities, the assessee has filed a reply on 31.03.2006 and it is admitted therein to the following effect by the assessee

(3.) AGGRIEVED by this order, the assessee went in further appeal before Karnataka Appellate Tribunal in STA No. 249/2007 and re -iterated the contentions raised before the First Appellate Authority as also die Assessing Authority. The Tribunal after considering the contentions raked by the appellant has on facts held that pre -sale expenditure is not an item of expenditure even if it is separately shown. It held that appellant had failed to produce any agreement entered into by it with the dealers to indicate that the freight charge is not a part of the sale price. It is also noticed that the appellant has failed to prove that they have entered into separate contract for undertaking the transportation of the vehicle and hence freight charges paid is excluding the sale price and it was paid at the instance of the buying dealer and has come to the conclusion that the appellant had miserably failed in proving that the risk of transit was with the buyers and not with the appellant and the delivery was completed at the depot and rejected the appeal by order dated 21.01.2009 which is at Annexure -A.