State of Karnataka Vs Tallam Apparels (Karnataka High Court)
The Karnataka High Court considered a Sales Tax Revision Petition filed by the State challenging the order of the Karnataka Appellate Tribunal (KAT) dated 21.08.2017 in STA No. 3/2016. The Tribunal had allowed the assessee’s appeal and set aside the orders of the First Appellate Authority (FAA) and the Assessing Authority (AA), which had disallowed the assessee’s claim for input tax credit (ITC) under the Karnataka Value Added Tax Act, 2003 (KVAT Act).
The assessee, a registered dealer under the KVAT Act, was engaged in the purchase and sale of textiles and readymade garments. It purchased goods from registered dealers within the State and sold them by charging tax through tax invoices issued under Section 29 of the KVAT Act and the Rules. Following an audit, the Assessing Authority passed an order under Section 39(1) of the KVAT Act on 26.12.2014 rejecting the assessee’s claim for input tax credit. The assessee’s appeal before the FAA was dismissed by order dated 30.10.2015. Aggrieved thereby, the assessee approached the Karnataka Appellate Tribunal, which allowed the appeal and set aside the orders of the authorities below. The State challenged that decision before the High Court.
