Karnataka High Court
The State Of Karnataka vs M/S. Rajesh Exports Limited on 20 February, 2025
Author: Krishna S Dixit
Bench: Krishna S Dixit
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STRP No. 14 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 20TH DAY OF FEBRUARY, 2025
PRESENT
THE HON'BLE MR JUSTICE KRISHNA S DIXIT
AND
THE HON'BLE MR JUSTICE G BASAVARAJA
SALES TAX REVISION PETITION NO. 14 OF 2023
BETWEEN:
1. THE STATE OF KARNATAKA
THROUGH JOINT COMMISSIONER OF
COMMERCIAL TAXES (ADMN.),
DGSTO-1, TTMC COMPLEX,
BMTC BUS STAND, YESHWANTHPUR,
BENGALURU-560 022.
2. THE DEPUTY COMMISSIONER OF
COMMERCIAL TAXES (AUDIT-1.6)
DGSTO-1, TTMC COMPLEX,BMTC BUS STAND,
Digitally YESHWANTHPUR, BENGALURU-560 022.
signed by
CHETAN B C ...PETITIONERS
Location: (BY SRI. ADITYA VIKARAM BHAT.,AGA)
HIGH COURT
OF AND:
KARNATAKA
M/S. RAJESH EXPORTS LIMITED,
NO.4, BATAVIA CHAMBERS,
KUMARA KRUPA ROAD,
KUMARA PARK EAST,
BENGALURU-560 001.
REPRESENTED BY MANAGING DIRECTOR
...RESPONDENT
(BY SRI.RAGHU HULIKAL.,ADVOCATE)
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STRP No. 14 of 2023
THIS STRP FILED UNDER SEC.65(1) OF THE KARNATAKA
VALUE ADDED TAX ACT,2003, AGAINST THE JUDGMENT DATED
23.12.2021 PASSED IN STA NO.148/2020 ON THE FILE OF THE
KARNATAKA APPELLATE TRIBUNAL AT BANGALORE, PARTLY
ALLOWING THE APPEAL AND SETTING ASIDE THE ORDER
DATED 21.12.2019 PASSED IN JCCT(DGSTO-1)/SMR/CR-
G9/2018-19. ON THE FILE OF THE JOINT COMMISSIONER OF
COMMERCIAL TAXES, DGSTO-1, BENGALURU. MODIFYING THE
RE-ASSESSMENT ORDER DATED 24.03.2018 FILED UNDER
SECTION 63-A OF THE KVAT ACT 2003 . PASSED IN TIN
NO.29020079929 ON THE FILE OF THE DCCT (AUDIT) 1.6,
DGSTO-1, BENGALURU. AND FOR THE TAX PERIODS OF THE
FINANCIAL YEAR APRIL 2011 TO MARCH 2012.
THIS STRP, COMING ON FOR ADMISSION, THIS DAY,
ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE KRISHNA S DIXIT
AND
HON'BLE MR JUSTICE G BASAVARAJA
ORAL ORDER
(PER: HON'BLE MR JUSTICE KRISHNA S DIXIT)
Revenue is in Revision before this court for laying a
challenge to the State Appellate Tribunal's order dated
23.12.2021 whereby, Assessee's STA No.148/2020 has
been partly favoured. The relevant part of the operative
portion of the order reads as under:
"The appeal is partly allowed.
The order of the Respondent No.1 is set
aside.
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The appeal is remanded back to the
Assessing Authority to the extent of
ascertaining the departmental action taken
on the franchises/agents who have issued
VAT-140 to the appellant and if the action
already been initiated, to give exemption on
the turnover of franchise/agents, who have
issued VAT-140. If no such action initiated
against such franchise/agents, AA shall have
his liberty to pass appropriate order in
accordance with law.
The AA is further directed to verify the claim
of deduction of sales returns and to allow
exemption on such turnover after
verification.
The AA is directed to pass revised re-
assessment order in the light of
observations made above and issue revised
demand notice within 4 weeks from the
receipt of this order."
2. Learned AGA appearing for the Revenue
submits that in the fact matrix of the case, its appeals
ought to have been favoured whereas, conversely the
appeals preferred by the Assessee have been allowed and
matter is remanded for consideration afresh contrary to
the established norms. Learned counsel appearing for the
Assessee makes submission in justification of the
impugned order contending that the movement of goods
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within the State per se would not justify an inference
being drawn as to there being a transit/transaction.
3. Having heard the learned counsel for the parties
and having perused the Petition Papers, we are not
inclined to grant indulgence in the matter inasmuch as we
are broadly in agreement with the following views of the
Tribunal recorded at para 19 which reads as under:
"19. Coming to the 'turnover' definition
under Section 2(36) of the KVAT Act, it is
defined as follows:
"2(36) 'Turnover' means the aggregate
amount for which goods are sold or
distributed or delivered or otherwise
disposed of in any of the ways referred to
in clause (29) by a dealer, either directly
or through another, on his own account or
on account of others whether for cash or
for deferred payment or other valuable
consideration, and includes the aggregate
amount for which goods are purchased
from a person not registered under the
Act and the value of goods transferred or
dispatched outside the State otherwise
than by way of sale, and subject to such
conditions and restrictions as may be
prescribed the amount for which goods
are sold shall include any sums charged
for anything done by the dealer in respect
of the goods sold at the time of or before
the delivery thereof.
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Explanation:- The value of the goods
transferred or dispatched outside the
State Otherwise than by way of sale, shall
be the amount for which the goods are
ordinarily sold by the dealer or the
prevailing market price of such goods
where the deals does not ordinarily sell
the goods."
As could be seen from the above
definition, the value of goods dispatched
outside the State otherwise than by way of sale
could form part of turnover but not goods
transported within the state to agents.
Therefore, difference between the value of
goods transported and the consignment sales
declared by the Appellant cannot form part of
'turnover' and brought to tax. Thus, the action
of the Rspondent-1 in taxing the turnover is
totally wrong and required to be set aside. We
therefore, answer Point No.3 in the Negative."
In the above circumstances, the question of law
raised by the Revenue in the petition does not arise for
consideration and therefore, the petition is dismissed,
costs having been made easy.
Sd/-
(KRISHNA S DIXIT)
JUDGE
Sd/-
(G BASAVARAJA)
JUDGE
DH/cbc
