- 1 - NC: 2025:KHC:7577-DB 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, YESHWANTHPUR, BENGALURU-560 022. …PETITIONERS (BY SRI. ADITYA VIKARAM BHAT.,AGA) AND: 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) Digitally signed by CHETAN B C Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:7577-DB 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. - 3 - NC: 2025:KHC:7577-DB STRP No. 14 of 2023 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 - 4 - NC: 2025:KHC:7577-DB STRP No. 14 of 2023 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. - 5 - NC: 2025:KHC:7577-DB STRP No. 14 of 2023 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 List No.: 1 Sl No.: 23