IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 31^ST DAY OF OCTOBER, 2025 PRESENT THE HON'BLE MR. JUSTICE S.G.PANDIT AND THE HON'BLE MR. JUSTICE K. V. ARAVIND SALES TAX APPEAL No.26 OF 2017 BETWEEN:

M/S KATHARE ENTERPRISES, REPRESENTED BY ITS PROPRITRIX, SMT. SAROJA BAI, W/O UMAKANTHSA KATHARE, R/O: WARD No.05, (NEW WARD No.13)

BEHIND PATTANA PANCHAYATH OFFICE, ANJANEYA BADAVANE, BHAGYANAGAR, TQ:DIST: KOPPAL.

…APPELLANT (BY SRI ASHOK G. V., ADVOCATE)

Digitally signed AND:

by VALLI MARIMU THU

1. THE ADDITIONAL COMMISSIONER OF Location:

HIGH COURT COMMERCIAL TAXES, OF (ZONE-3), 8^TH FLOOR, VTK-1, KARNATAKA GANDHINAGAR, BENGALURU 560 009.

2. THE JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS), DAVANAGERE DIVISION, DAVANAGERE-577001.

3. THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT BELLARY), BUDA COMPLEX, II FLOOR, MOTHI CIRCLE, BELLARY-583101.

…RESPONDENTS (BY SRI ADITYA VIKRAM BHAT, AGA FOR R1 TO R3)

THIS STA IS FILED UNDER SECTION R/W SEC.9(2) OF THE CENTRAL SALES TAX ACT, 1956 R/W 66(1) OF THE KARNATAKA VALUE ADDED TAX ACT,2003 AGAINST THE ORDER DATED 21.3.2017 PASSED IN No.ZAC-3/DVG/SMR-15/16-17 ON THE FILE OF THE ADDL. COMMISSIONER OF COMMERCIAL TAXES, (ZONE)- 3, 8^TH FLOOR, VTK-1, GANDHINAGAR, BANGALORE, SETTING ASIDE THE ORDER BEARING No.CST/AP/10/2016-17 CAS No.298925050 APP DATED 24.12.2016 PASSED BY JOINT COMMISSIONER OF COMMERCIAL TAXES, (APPEALS) DAVANAGERE, DAVANAGERE DIVISION, ALLOWING THE APPEAL FILED AGAINST THE REASSESSMENT ORDER DATED 29.04.2016 PASSED BY DEPUTY COMMISSIONER OF COMMERCIAL TAXES , AUDIT AND RECOVERY BELLARY, UNDER SECTION 9(2) OF THE CENTRAL SALES TAX ACT 1956, R/W SECTION 9(2-A),9(2-B) OF CST ACT,1956 AND SEC.39(1), 72(2) AND 36 OF KVAT ACT,2003.

THIS STA HAVING BEEN HEARD AND RESERVED ON

09.09.2025 AND COMING ON FOR PRONOUNCEMENT OF ORDER THIS DAY (THROUGH VIDEO CONFERENCE), K. V. ARAVIND J., DELIVERED THE FOLLOWING:

CORAM: THE HON'BLE MR. JUSTICE S.G.PANDIT and THE HON'BLE MR. JUSTICE K. V. ARAVIND C.A.V. JUDGMENT (PER: THE HON'BLE MR. JUSTICE K.V. ARAVIND)

Heard Sri G.V. Ashok, learned counsel for the appellant–

assessee, and Sri Aditya Vikram Bhat, learned Additional Government Advocate for respondent Nos.1 to 3.

2. This appeal by the assessee is filed under Section 9(2) of the Central Sales Tax Act, 1956, read with Section 66(1) of the Karnataka Value Added Tax Act, 2003, assailing the suo motu revisional order dated 21.03.2017.

3. The assessee–appellant is engaged in the business of selling human hair to exporters. During the year 2009-10, the appellant sold human hair valued at Rs.98,68,098/- to the exporter M/s. Srinivasa Hair Industries, Eluru (AP), and raised the corresponding sales invoices. A proposition notice was issued, proposing to treat the sales made to M/s. Srinivasa Hair Industries as inter-state sales and to levy tax at 12.5% on the turnover. The explanation offered by the assessee was rejected on the ground that the ‘H’ Form combined the invoices of the first and third quarters of 2009-10, which was held to be in contravention of Rules 12(1) and 12(10)(b) of the Central Sales Tax (Registration & Turnover) Rules, 1957¹. The contention of the assessee that additional tax could not be levied without rejecting the books of accounts was also rejected holding that the turnover of deemed exports declared in the returns or in the books of accounts was not in dispute.

3.1. The assessee, being aggrieved, preferred an appeal before the Joint Commissioner of Commercial Taxes (Appeals)² The JCCT (A), by order dated 24.12.2016, relying on the judgment of the Andhra Pradesh High Court in Mahabaleswarappa & Sons vs. Assistant Commissioner (LTU), Anantapur and others³, held that a dealer supplying goods for the purpose of export need not submit ‘H’ Forms for quarterly periods to claim the benefit under Rule 12(10)(a) of the Central Sales Tax (R & T) Rules. It was further held that while it is mandatory that the ‘H’ Form should cover inter-state transactions of the quarter, combining transaction