STATE OF KARNATAKA Vs. MADHU TRADERS

JUDGEMENT

(1.) THE State has come up with this revision challenging the legality and correctness of the order passed by the Karnataka Appellate Tribunal, Bangalore in S.T.A. No. 1186 of 2005 dated August 24, 2006.

(2.) THE appeal is admitted to consider the following question of law, which reads thus: In the facts and circumstances of the case, whether the Karnataka Appellate Tribunal was justified in setting aside the order passed by the assessing authority and the appellate authority holding that there was no suppression established by the authorities to reassess the dealer under Section 12A of the KST Act and to levy tax and penalty?

(3.) THE facts involved in this case are as follows: For the assessment year 1999 -2000, the Deputy Commissioner of Commercial Taxes, Intelligence, West Zone, Mangalore, has passed an order under Section 12A of the Karnataka Sales Tax Act, 1957 (for short, "the KST Act"), on the ground that the respondent herein is indulging in clandestine business of dealing in vegetable oils by producing demand drafts in the name of one Parameshwarappa, bearing account No. 860 in Vysya Bank, Hassan. Therefore, based on the statement given by one C. Ajith Kumar, managing partner of the assessee before the Income Tax authorities wherein, he had admitted the clandestine transactions of edible oil and also unaccounted transactions in the form of demand drafts by issuing notice to the assessee, the Deputy Commissioner of Commercial Taxes, came to the conclusion that the order of assessment has to be reopened and accordingly, it was reopened and levied penalty and completed the order of assessment. Challenging the order of the Deputy Commissioner of Commercial Taxes dated March 31, 2005, the assessee filed an appeal before the Joint Commissioner of Commercial Taxes in Appeal No. KST. Appeal 69/2005 -06, which came to be dismissed on October 1, 2005 under Section 20(5) of the KST Act. Aggrieved by the concurrent findings, the assessee filed an appeal before the Karnataka Appellate Tribunal, Bangalore, in S.T.A. No. 1186 of 2005, which appeal came to be allowed by setting aside the order of the Joint Commissioner of Commercial Taxes (Appeals) DVO, Malnad Division, Shimoga, on August 24, 2006. Questioning the said order, the present revision is filed.