Commissioner of Commercial Taxes Vs Jindal Aluminium Limited (Karnataka High Court)
The Karnataka High Court dismissed the Sales Tax Revision Petition filed by the Commissioner of Commercial Taxes challenging the Karnataka Appellate Tribunal’s order dated 05.10.2018 in STA No.247/2017. The Tribunal had allowed the respondent-assessee’s appeal, set aside the orders of the Assessing Authority (AA) and the First Appellate Authority (FAA), and remitted the matter to the Assessing Authority for the limited purpose of adopting the assessee’s method of computing non-deductible input tax under Sections 11(a)(5), 11(a)(6), 14 and 17 of the Karnataka Value Added Tax Act, 2003 (KVAT Act), recalculating the liability, penalty and interest, and issuing revised demand notices.
The respondent-assessee, a registered dealer engaged in the manufacture and sale of aluminium extrusions, used petroleum products such as furnace oil/fuel oil as fuel in the manufacturing process and claimed input tax rebate/input tax credit under Sections 14 and 17 of the KVAT Act read with Rule 131(3) of the KVAT Rules, 2005. During the tax period 2008-09, the assessee effected local sales, inter-State sales, export sales and stock transfers.
The assessment was reopened under Section 39(1) of the KVAT Act, and the Assessing Authority initially disallowed the input tax rebate on petroleum products by order dated 11.03.2011. Upon the assessee’s rectification application under Section 69, the Assessing Authority reconsidered the matter and accepted the claim by order dated 15.04.2011, resulting in a nil demand. Subsequently, another notice under Sections 69 and 39(1) of the KVAT Act was issued on 27.06.2015 proposing disallowance of the input tax credit, culminating in the order dated 16.10.2015 disallowing the claim and raising tax, interest and penalty demands. The First Appellate Authority dismissed the assessee’s appeal, following which the Tribunal allowed the appeal.
