Sales Tax Appeal No. 2485 of 2011. Case: Shankarnarayana Construction Private Limited, Bangalore Vs State of Karnataka. Karnataka Appellate Tribunal
| Case Number | Sales Tax Appeal No. 2485 of 2011 |
| Counsel | For Appellant: Sri G. Rabinathan and Sri M. Thirumalesh, Advocates and For Respondent: Sri B. Vasanth Kumar, State Representative |
| Judges | S.L. Subramanya, CTM and Basa Varaj S. Sappanna Var, DJM |
| Issue | Karnataka Value Added Tax Act, 2003 - Sections 63-A, 35 and 38; Karnataka Value Added Tax Rules, 2005 - Rule 37(2) |
| Citation | 2013 (76) KarLJ 236 |
| Judgement Date | April 26, 2013 |
| Court | Karnataka Appellate Tribunal |
Judgment:
S.L. Subramanya, CTM
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This appeal filed under Section 63(1) of the Karnataka Value Added Tax Act, 2003 (for short, 'Act') is directed against SMR order bearing No. JCCT/ADMN-1/SMR/CR-13/2011-12, dated 20-9-2011 passed by Joint Commissioner of Commercial Taxes (Administration), DVO-1, Bangalore (for brevity, 'FRA') by which the proceedings of the Deputy Commissioner of Commercial Taxes (Audit-11), DVO-1, Bangalore (for short, 'AA') issued on 28-6-2010 was revised under Section 63-A of the Act.
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Briefly, the facts are stated thus:
The appellant is a private limited company. It had opted for composition method of payment of tax under Section 15(1)(b) of the Act. AA called for the books of accounts for the tax periods from 1-4-2005 to 31-3-2009 by issuance of statutory notice in Form VAT 275 in order to verify the correctness of returns filed by the appellant. After verification of the books of accounts and evidences as well as after hearing the appellant represented by its Accounts Officer, the AA found satisfied with the returns filed for the tax periods in 2006-07, 2007-08 and 2008-09. AA observed that the appellant had executed civil and structural steel works for M/s. BMM Ispath Limited, Hospet during the above periods. Copy of agreement with respect to execution of works contract was also examined by the AA in addition to books of accounts. After the above process, it was found by AA that there were assessable turnovers for 2006-07 and 2007-08 and there was no turnover for 2008-09. The turnovers reported in the returns at Rs. 11,35,98,300/- for 2006-07 and at Rs. 4,23,70,350/- for 2007-08 were accepted and accordingly found no discrepancies. Reassessment proceedings were not initiated for the above reason. Proceedings were issued on 28-6-2010.
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The FRA observed that the proceedings of AA issued on 28-6-2010 were erroneous and prejudicial to the interest of Government Revenue. He observed that the works contract receipts are at Rs. 5,15,00,716/- for 2007-08 as per profit and loss account attached to the balance-sheet, whereas turnover at Rs. 4,23,70,350/- which was reported in the returns was accepted by AA resulting in loss of Revenue. The appellant submitted that the turnovers were correctly declared in the returns which would tally with the annual figures of 2006-07 and 2007-08 and consequently, there was no under declaration of assessable turnover. With annual return filed for 2006-07, difference of tax payable was...
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