I R
IN Tfiii HIGH COURT OI' KARNA'I'AI'iA. BANGALORE
{)A"I'1-31) TI---118 'I'H'E£ 15*" DAY OF FEBRUARY. 20
PRESENT ,.], s
THE I-ION'BLE MR. JUSTICE K.L.M.ANJUN13ITIfI .. __f ;_. A'
AND -- ~ .
THE HON'BLE MR. JUSTICE _
S.T.A E\EO.8w/_2é'§O'7_ ; "
BETWE{C1\E A "
Sn. '1'. Shiva kuma r.
PWD ConE.1'ac1.0r.
Ecfigas Sireei.
H0le11arasipur~57321 1. "
Hassan District. "~
(By S11,K.K.Ch:ii':z1.V:fiy21. 'A,£1{ta.t€" for RaghL1ramaI1 Associates)
AND:
The C0mj11iss1s;1é1' or C ()1T1EH€I'CiE1I Taxes
V.z1f*:'i}yz1 'I'c:ri K2i1j\ra_I_;13=va:-1 .
'V " Ga1I'1rihi';i£1géir,
' £3a11_gaI--()_:'cz:56OvQ09.
: Respondent
(Smt.Ge::tF1é;1j'..--1'\/£e:1()11. Govern Ineni Advocate.)
as Civil work which is labour oriented. The appellant i.se'Va"}s0
carrying on {he business in I--ISD, Petrol diesel l»:;:b4rir:9;_:1-ifrsll'
etc.. as a subsequem. seller. For the assessnrzerltl";5eavr:_si.9'97é
98 appellant had opted for the behel'ilZ"ef eornp.qsi<tiorrln
respect of C()r1l'.1'E1Cl work u1'1derta.ke1'14'arld_the jlLrrisdit?tiC:riaEp 9'
Assessing OlTiC€1~_ namely V of
Commercial Taxes [Assesspaenfi'"Pls,_sseii'1.levied"4'5Pxw~3[aX On
earthen work under Sectlllexlrll order dated
26-4-1999 whieh.lig.__ai Officer
levied tax at labour work
cf to Rs. 15,56,671/~
rejegxtixaglllthel' :'le2l<rfie11ipti0n of receipts relasuing to
labour." -. LA 9 A V
{ii}-"9'A f"\§§%§1'K'V<*lClH """ "by the order of assessment dated
thee.:vegssessee preferred an appeal before the
Joint' C(mm"1'i_.s'si0ner of Commercial Taxes in appeal
~.._*N0.KSTZAl'1;94/§999~2O0O who by order dated 22-6-2000
';iiEmve'd the appeal and set aside the order of the Assessing
6
22m6~2()00) and {he order passed by the Adclitional
Commissioner of Commercial Taxes Zone ll. Ba.;v'i~g¢'1l.ore
(dated 6«6~2003) are prejudicial io the inieresi. .
and accordingly called for reply from the appellaii-ijassessee.__4
in response to the said notice the ei»ppe:ll'anii' lierein" 'C
objections to the proposed revisionary"proceedings: vby reply'
dated 6--2«2007 (Annexure~H) wliitrli came ioconsidered
by the Commissioner of C_o:ri1m--ereialCu "i"~a1_;;es«,a11d by his order
dated 1-fl~»3~2007 1fejeetedAAi:_he_elairn ihe Cerise;-eVssee--appellant
and restored ilieéottdepr .p::assedV"Vb3r"tleieixbepiiiy Commissioner
of ConiiiiercialTgxesg by his order dated 14-3-2007
rejected the (.:i_aim_oi' ijjlrlebVass'e«ssee--appellant and restored the
order Vpassed""b}} the Depiiiy Commissioner of Commerciai
ppvTa"x§j:g'}I:.Ar3,'§€-3§n1e;%1_i';ufflafisall dated 29"4~1999. H was hfifld
Ezhmiein. il"::~;1i,.ori:":e the assessee has opted for composition he
1e.21CVnr1()Vl.i' "oo=i'_:ar1d accordingly confirmed (he. order of
E ' 'fly
Ass _ss1ii5j_ Oi \.I" {T
(V) The appellembassessee being aggI'ieved by the said
order dated 14-32007 passed by the Commissioner of
Commercial Taxes, is assaiiing the same In this appeal:
3. We have heard Sri.Cha.ii.ar1ya,
appearing for the appeiianbassessee ii
Menon. learned Counsel appearing for, fihei resp'c)v:i'diAen.i,.i
revenue.
4. At the time of admissioriivioiiithe apf)eai,":the iolioudng
two questions have vfbeen _-.'o1'niu~lai:eCi'..by this Court on
1 l~7~20:{)8 ihrxhe!:ng_a;1Asw'e»re<;l: . _'
{i] i'=.Wii1ei.her ':C'oi'4r1iT1issioner of Commercial
was ."_§usi.ii'ied in coming to the
<3,O11c!1,is'io--r1--«that. when once the contractor
=.VhaVs~--.__submii:ted himself for composition
withdraw the same subsequently?
. aié. Li
as - {ii"}*...: Whether the amendment made to Rule 8-
8(1) of {he K.S.T. Rules is prospective and
whether the same was in force on the date
01' withdrawal of the application by the
appellant'?
5. Sri.Chait.anya for the appellant--assessee "mid
contend as follows:
{i} The power under Section 22~A(1} of M
with the Additional Commissioner Whiehwis in f"ate.;?ia
with the power available under Section 1) of
Tax Act and thus the Additional _C'on1n1issione_r lWas'..ji"i'srtiEied
in his order dated 6-6-3--2QQ3 pern1--itt'ing"~i;lie to opt
out of tjornpositi.-9Vn.__Vggrovision and allowing the appellant-
assessee 1'<;,p'pr;_ i'o'r~.asse'ss'nien't tmder Section 5-133.
,{ii) x1helj1,,.1'c1giiieIit' in Karnataka State Construction
l'Co&r};5orati-o'{1 .I,in1it.ed lllll "was passed subsequent to the
lre\?1sioi1a_l"'~._ordcr_:..of the Additional Commissioner of
Cormfne1'(:ia.1liiigviles. Zone 11 dated 66-2003 and as on the
.«._'said dat1e'i--i.e.. 6w6v2003 Mycon Construction case was
the field and hence the order of the Commissioner
'""
"bag: V'ia3.;g.
in holding that orders of Joint Commissioner {Appeals}
(dated 22~6~2000) and order of Additional Commissioner
[dated 8~6~2003) cannot be held to be erroneous on the
basis of the subsequent judgment.
(iii) When two views are possible the View ta__1{eh' --l)f_V--- _
Additional Commissioner cannot be said to be_.err.oijeo't;a.s. .
{iv} The decision of Karnatetlia
Corporation Limited Vs. State Vof.4_Kar1"1ai'_aka
75 did not deal with the specific of Colrripositioni option.
In the decision in Wip1*oi_4I'nfote_eh. reported in
(2000) 1.20_STC'C'..iVii9V:'<.it'has___beer;. held pure labour charges
are not ezxfigihle io'rsal'es as such the levy of sales tax
on seijviees when there is no transfer of property in goods is
it " contended that the Commissioner of
Coin-rnere.ia1_fiiaxes in exercise of his power under Section
.u""«.__V"2.2wA[2]z iota the Act. is not empowered to review both the
"o"1'ders"} i9€'I the order of the Joint. Commissioner dated
(200412 .. gm: 0
22~6~2000 as well as the order of the Additional
COi'I1FT1lSSl(Ji"i€'.F of Commercial Taxes. Zone ll dated 6--6--"?,_O'O3
since the said provision permits him to disturb Einy..~o:1.e; A'
at a time.
6. Per contra Smi.Geetha Merion.llle'.9.rried.;'counseldfor
the revenue, would contend that once the"assesse_e lias'~opted l'
for composition under Section l"I?g[.6}.ol" the-. 'Act. :i_l1eylllc2inlnot
be perinitted to opt out pai'ti'C:ull:arll§".._in the-A revisional
jurisdiction. Ii i.s also ;_l'cor1tende:{:Iev:l_ fihéii: the Mycon
Const1'uetio°i a- _ cfiaselll :?':~.'«1iz:a.s"--re-n.dere'd"' in the background of
cor1sideri,ng'~1l1e elliV:{llerige"lto'the vires of amendment brought,
to Rule 8-B"!._ollKarri2_ii.é1ka _Sé_;v1es Ta.x[Amendment) Rules 2001
xvherejuridger tliewvires was challenged and in the said case it
vvas ":3 co'i'ice:-ysion given by the State and as such the
petit_ioners_'therein. and similarly placed persons were allowed
t.o.'opl'i:lloi.1tof:'§'(iiiI1posit.ion and submits that order passed on
'nconcession cannot be a binding precedent. She further
1;' " ,..
s. gym
.
elaborates her subnlission that in B.V.Subba
DCCTS ease reported in 125 STC 287 the .
was extended by relying upon i\/iycjonfs cas’e””andj ,boii,.f1′.ythev
judgments were rendered by the ieéimedi s.i::1gIee. Jui;i’ge
Court and she brought to ofiii”-.noticte’.f;haty t]i;te”‘s.gti.d_yySttbba
Reddys case came to be set a E;)€I1tj§h of this
Court by its Hpetssed in
W.A.No.1740/.?.OQl anci__ that neither
Mycon’s nor ‘the—-position of law has
been iaid i4’ti1;tyl1§3~’~-v¢;ul:§’;jnits that in Karnataka
State CLons_tr1.1Vc%1’ifon..y_Corpoféition ease, the Division Bench of
this Cotirthéts heid t”hVat_ oneethe assessee exercising option
for C.’O:iIipC_)SitiO£T»Q{V,FEtX would be estopped from going back on
«”thyeV’groti’-no tiitat some work or portion of work is not Works
I also contends that in the ease of
‘I’.i~I.~3[enk.ettggowda Vs. Commissioner’ of Comrneroijai Taxes
-‘«.___V’-reporteeivni 2006{E:Sl} Kar.L.J.289. the issue relating to levy of
it “«f’;3;:y_i_ni.;*espe(:t: oi’ Labour Cont:r:;:ct.s, it has been held by this
{W
Court that Once the assessee opts for C0mp0si’L1’0r1 CanV11oj; bf,’
permitted to opt. out and on these grounds she reqiiés*;5s_’ _
Court. {:0 answer the que3si.i0ns of law in I’2′:v011r.~3i7..tf1’e 1’C.VCnu€ ”
and against the assessee.
7. In support of ih..§: ‘~.._subriaiss1onS~_ i’;.1éi(ieV “by
Sri.Chai1ayna he reiies upon theAC.f91I0Wii1g deCiSior1s:_J3
1. Malabar 1nd?us,fu”:;1i’ j’ Vs. CIT
[;2.Q00g_24;3 11jRgi33.'{sC3-.._V ‘ ” ”
C1T5j/S. QM: .,.;\/11:,-m1 .su§ii{iess Steel [P]
1 1;%.d;.=; (2d0:3;_V”*2£?s_3 .j1*rR 2%-§5″‘(sC)
Ivasc-.._1’r1r11;i Ltd. (2007) 295 {TR
K.a_ma._:h*._Res-{aux-ant vs. ACCT (2007 8
\”/€-T:i72 mar.)
. E$.~_CIT vs. Abdulkarim Stone Contractor
V .,r:’1997} 225 ITR 1032 [Raj].
‘ Parikh 3: C0. vs. CIT (1980) me 610
‘ [Guj.)
7. sum Amiya gala paui vs. C1T[2oo3) 262
ETR 407 [SC] j
13
8. Mycon Construction Ltd. VS. Sidie of
Iiarnataka and Another [1998] 111 S'”FC_–.__
322 (Kala) T
9. av. Subba Ready vs. DCCT (2o02:;’~~–:–2′::.’_ _ “if
SEC 287 (Kan)
10. lqbai Ahamed vs.__~I§)C_C’I’
KLJ 390 [Kali]
8. Per contra Sn1LGeetha ‘M.er1on’,-..iéarnegf’}$;§.di1iV0:31al
Government Advocate appearing__{ic$i=..1_he_» res}.) c)nd:¢nt vfievenue
wouid reiy upon the 1’c)EE()v\2’¢-Y-i1″Vig_de_cisaj1.0nS’:_ ‘ .
(i) Karnataka S{.e…i”_e’» VCQ:1stri;.cti'<§n Corporation
V"'T'i.–injF'.;'i.eci« ,:E33 11'ga&1"c3re \fS';"S"£é1t.e of Karnataka (2004)
{ii} '"wr, A.VN;§. 1'174Q'/'2..uG'01_ disposed ex' on 10422004
V 'V in VU'i1."3 I1IEl'{v[€1' of Deputy Commissioner of
. Ci<;1j11r11erc'i'é{l Taxes and others Vs. B.V.Subba
I.__;i '1’€ie1* to appretriafe the cromerltions raised by the
V1;e9P?53Ct,iv£3—- “advocates. it wouid be ntécessary to extract the
‘
relevant provisions of KS’? Act as also Rule -8 of Karnataka
Sales Tax Rules:
Section. 22-A of KST ACT _
[22~A. Revisional powers of
Commissioner] and ” it
The {Additional Conm1issi.on’er]A’ ”
own motion calI”:_i'{;r__ anda.
record of {any ordenpassed orprotteeding
recorded] uvrider [Syeetioifi:f2tVO’s.Q_r Sectioirii
01] this Act. that any
order.passed.~the1f*einv–.by afiy who is
not i:;i”1e7 ‘rani-.’:K.,_oif a “(Joint
” erroneous in so far as it
a is . ‘the interest of the
it necessary, stay the
operaiion sttch order for such period as
L he de’ern,s___ifit and after giving the assessee
.:;1An–..Voppori:iinit:y of being heard and after
“nia–ki_r1g or causing to be made such
“Vii”.;r{uiry as he deems necessary, pass such
order thereon as the circumstances of the
case just’ify._ including an order enhancing
or modifying the assessment, or canceling
i6
[1] or sub»
sect.ion {2}. as the Case may be. ii!
(21)
has not expired:
Act 4 of i992 [1-+92 to 31-3-99)
power} under subsection
(b) the matter has been subject’-t_Q L”
appeal under S€CtiOI12?.””()Z’~.a 1I’evisi()”n..”ir1V
the High Court: or}
(C)
more than four years”have1.e*}{p.ired
after the passing oidrhet»0rder’sdught i£5–.3o”e”‘
revised. V _
(4) Noiwithstarrding ain}ftEi.i_i’2.g”contained in
L ” the . {Additi0r1a1
subsection (3),
Ce5rn_misAsi0:1’e1’~}:01″ the Commissioner, may
” pass ‘order’un’d.er sub–seetion {1} or (2),
the _f°’:~:t_1_b~seetior1 [3], before the expiry of a
/, of one year from the date of the
. n’;-,-“de.r in such appeal}. or revision or before
the expiiy of a period of four years referred
{C}
whichever is 1ater.]
subsection
:;{%>/” a
to in clause of that
the time for appeai against the ordergfl.
[[5] Every order passed in revision unde1*;'”–
sub-se(:t’ior1 {1} shaii. subject to the
provisions of sub~seCt.ion (2)
section. Seeiions 23. 24 and
Fina}.
(6) Every order Passed ’10 i{é\I’isiori~_iIf1,C’ierV
sub~seCi’.ion {2} .sh-2i_li, ;i:o”
provisions of SeCiion’sLf23. 24
finai]
{Explanation-I» i . béissed or
prooeedi_ngs V_ the«v:.e’pp1’opria£e
a1V13:horiiL’y_.refe:rred to Vsuibiésection [1] or
V'{2sji\::>iI1\}€£Vf3S”‘”ah” iss’u”e*’o’n which the High
: Co.ui*i.f1:isgiVen”‘ii,s’ decision adverse to the
i revenue ‘in some other proceedings and
}ap.p¢–a1 “go the Supreme Court against
Vs:.ichA””‘d.e§:_ision of the High Court is
penvding, the period spent between the
L1iéu~e:f.raI’ the decision of the High Court and
date of the decision of the Supreme
.’Cnouri shall be exciuded in computing the
period referred to in clause of sub
K
section [3].
permission shail be in Form 8–AB and shall
valid for the entire year to which it relates. ‘
{tit}’I’he [Assistant Cgmmtssieherii y erf * _
Commerciai Taxes] or [COH1ri»1€I’C”iE’1–!A.;Ta}l.Offi’C€f}
may cancel such permission. if thehdealezf?’
(a) fails to pay tax i11’t’.:/my nj0r1th’w:itthin the
time specified; . ”
fh) c:on1,raven.es_”ar,1y’prQvtsion’ef—-the Act or
:_ ” Rttl e ::rI&1a3de”‘Vth’e’1’e: den’:
gttriiéndxfgent Rage s-a’ t~e
Ifi_n.il.e Jrules, in sub–ru1e(1}:-
i. or the “thirty days”, the words ” one
httnd.reti and twenty days” shall be substituted:
the words “course of the year”. the
Words shall be inserted, namely
. _’f’.afid such application once filed by the dealer
electing to compound the tax shall not be
permitted to be withdrawn by him”
iii. The proviso shat} be omitted.
10. The Lmdisputed i’act.s leading to the i’e\Iisec§vo1’*der
being passed by the COI’IHI1iSSiOI16l” of Con1merciaI«VTaxesatifei’ V.
Assessee is an individual P.W.D. contractor.invoived in
the works Contract and had opted “i”orA_ ‘assesisnient*:by0.”1
composition method under Sectior1’:’«.1__’/’b’t5V}A. of Act:._ ”
Assessing Officer in respect Voi7.Vt:’Works “carried the
Contractor to the tune Q.–f– levied at the
rate of 4% which ‘c1I1’1OLil”i4″E’€V’d:”L.’)”- rejecting the
ciaim fovr’i’ev::ertij;ptiori;”oi”–receipts'”*reiatir1g to Labour. The
assessee be.ir1g.2tggrietfed”by.the same filed an appea} before
the Joint Conin’1is’sio’ne’1′,.oi’—-Commerciai Taxes (Appeals) and
the }\4;o1je1t]o.ate uAt1Eit1orityV”i3y order dated 22-6-2000 held that
0″worksV’eot1t.1’ar;t: r€C€iW[‘)tdCOI1C€rI1iI1g the execution of earthen
of Rs.i.65,70,899/– be reduced from the
gr’)s’::.__wo’i*iés_v.contract receipts and only the rest of the tum
over’~be to tax under Section 17(6) of the Act,
thereby reducing the tax liability to Rs.8.93.835/~.y”‘”ron1
Rs. 15.56671/– . One curious aspect which reqriiyifoslylltol”hoV
noEiCr:*d at this juncture is that. the assesses being.._se1£is.iiéd.lof
the same did not challenge the se1r1iey\Fi’iicl1 obvzi’oé,is sirirce
the same being beneficial to it.
11. Be that as it. may. t.hé’»AEiditior2al.Coni1:r1issiorier of
Commercial ‘I’axes. Zon-“‘e._li. £5é1″i1g;z:il’orésA..in exercise of his
Powers under Sec’aio1’1 22-Ail] (‘fine Aoii;fs_;uo’vi11oiu issued a
notice dated 2~9e2QQ)2 aippollant assessee to
show L’.ElfJ1S€ 1.11%?réE.iéi”‘give’l-1 by the First Appellate
Aiithoriiy bii1:1*c:éitirigy’lafivozjiilori of the contract work should
not be broiiglfii to fax ‘qs”i.i an ‘error’ warranting revisional
EECliQl};.’ byVplac:i11.grelialice on the Case of S.S.Muddam1a Vs.
of_vl&”s.rn§it;–1ka reported in 89 SEC 90 {HC](DB]. E1 is in
ii. was contended by the appellzmi. that
t,l1mi’§;11 had filed form No.8 and had sought for
_’Eh..eVibe11e’i’iE of ctomposiiion. Ehere was statutory duty cast. on
of the First Appellate Authoiities order l”i)d1’1g the liability t.o
Rs.8,93,835/y .
12. The respondent Commissioner in eXer’cis_e’~.o’fghi.s
power under Sub~Section 2 of Section 22»A of .
both the above said orders narnely,_the order'”oli’_the*.J’oVint.
Commissioner’ dated 22~6~2000
Additional Commissioner dated 6-_6–2tl03llby hisvllorder
14-3-2007 holding that the aslsesseey had’ made any
request before the Assessing to_’\zl7i’thdraVxr permission
granted,to—.hiln’i.tol’G;o1; leom.;3osit.ion either during the
assessrrient at the time of assessment by
Assessing l£\L§tll1:)rilt’y_ a’nd” at the Appellate stage. It was
11()tiC«é§d by the “v–.Con1n1issioner of Commercial Tax that
Ad’d.itior_;al_ Commisslorier of Commercial Tax, Zone»lI,
vflrelied upon the judgment. in Mycon
Const1’L1et4ior1″l Limited referred to supra and permitted the
_las-syesseerto revoke the Composition option. By perusal of the
T\.)
(J:
judgment. in i\/Eycor: Co’r1st’ruct1ion L-iriiited’s Case it i’s:rio”ti.ce<:!
by us that assessee therein were permitted to oVu.t_'o1i"thVe'e M
basis of the concession made by.:th_e._Sta~*__e. }"1:I.'4thev.,S«aiEi..
decision. the constitutional xralidity ofhSub?'se'ctiori
Section 17 was under coris_id'eratioIi" arid it "this "
background. the learnect J u.dgeV_oI':V:t.h._is' 'Court in paragraph 13
of Mycorfs case held as 'i'o3viflows.{ }
"However._'in__ view} "of '«.ca_tegoriea1 statement
made b_Vy?_:theit'estVat.e"* rstatemeht. of Viotfiections stating
that i.his_:.'Cotirt~.. ca"f11:'p,e'rmit the"petitioner opt for
5~B: and I have
ta;1._§ef1"th'at as the factors to come to the
CO1'1'C"3.LtS'if)vI'1VV't1"iEt;LA:'U'!<%"'i»I'Xit)ugI1€d provision is a way
,resi.1.!ts.V a'rbitrai*iriess or violation of the right
.15*g1;iai*a1nteedxHtowhe petitioner either under article
145 orv1i1i'de1~ articie i9(1}[g} of the Constitution; it
reserve liberty to the petitioners to
A opt. :i§r}.,.a€égt;_1ai- assessment under section 5-13 of
'the'«:_Ae1. 11otw'ithsta1'1ding the fact that they had
i * ooted for COl"I1p0Si1'iOI] under section 17(6) of the
..«*«Aet. if the petitioners. within 12 weeks from today.
i,,
26
make a.n appiication to the concerned assessing
authority that they may be assessed as provided
under section 5-8 oi’ the Act, and further direct”-
the assessing authorities to proceed to assess
petitioners and ail others, who are not ‘7’ V
Court. as provided under section 5–B_otft_heV _
This direction is binding on”the'<Sta.te .:atAtCil._it_Vs"«x'
assessing. revising or ap"pellate~ au.th0_riti&es"'~~_H7A
wherever an appiication islflrnade fseeiging
assessment under section"5_-13. of the" vahdlltyhey
are directed to pass approfir"iate~~..orders*vsi.iitably
modifying the assessi:f;1ent.s.'Z'_' . "
Stibsequventlyepi l5l§edVdy's case similar issue
nameiy zwhle«the1'- off.-'composition is permissible by
an assessee""eai'ne_l1or 'consideration and on scrutiny the
"~,l_earn_e'cl Judge ofxlthis-~~«Court following the dicta in MyCon's
ear'-ed held.the"'issu.e in favour of the assessee and the relevant
pa'i<agraph l"v'vl€:)'j_.7..–::II.'1 Suloba Reddy's case reads as follows:
*7. The assessee in this case had prayed for
composition be1.1eiit'.s under section 17(6) of
the Act. Thereatter. realising that the
COIi'1pOSi1.i()!} application fiied by him
not be beneficial to him, had thot1gh_i§f_:'.i"i't' '
approach the assessing at1th_ori'ty
complete the assessmen'tfs'—i.n his
the assessment year 1'A99??9Ei tiridee
provisions of section_5–B oi' the Aet;;V5._iV_11:my
opinion. the assessi'itef'"authoritif 'iinV.'.vie"vg
the observations m;;Lde:b*,r_ the learned.A.J1i.ie1ge
of this Court" _ {_i'v'Ii/"eo'1'i.Tflonstruction
i iifii should
i 1-9981'
Lin1ited's case
hatxrueifiasssefsi orrie_;1jM;T_Veoiiio1etinz{ the
section of the Act
{1qii1iott't. iiiiiptigined endo:"semenl..
l'1*1i'~.j\?i_Ve*.=trféoi' _t'h.e above. the endorsement
"issue_ci'_assessing authority is
"'–<:4oriitreiry to the}observations made by this
Court in"I\/Iyeon Construction LimiteCi's Case
3.3998} i"i"i"STC 322. In that View of the
V'.'l"}'..'gVi:f'{!ifI'. it is difficult to sustain the
:""'iV1_npitzgned enclorsernent. Therefore. the
. :.?,nE4}:;.i"IAi<-1' reqttires to be set aside by this Court."
{emphasis suppiieci by us}
3: '2
"Fhereaf1.erwards the above said Subba Reddys case.'l:wavs
1.al<en up in appeal by the State in
whereunder the coordinate Bench oi""'tl"~:-is'Cot1rt'lloy.'ii'sl order.'
dated 1012-2004 reversed i,he:"';
B.V.St1bba Reddys case thrill’VJ:P.No”.274i§Q«{2GtlO'”dated
20- 102000 and allowed the a.p.peal_i1’l–ed by “t’i”–1e_SVtate. It is
held by Coordinate Ben(:hlyoi’l’.*,his Subba Reddy’s
case (paragraph No.8 in:.W’;A_:l’toV.’i.7.4_Ol/to the following
effect:
.vr[hevrefg}e{l.;_:in oar _::theL§o1’der passed by the
Jttdge is -liable to be set. aside on
:t’hels_hort.lground._:ijhat_.the conclusion reached by
him,_.~u»jls”‘¢($u§n;ef_”_;~to the two Division Bench
1 ‘ ‘d.ecision-sh ElhisV’Court, referred to above. Further.
as riightilyfl l’f)’o’inted~out. by learned Additional
Gvo¥*¢1’ift”ment Advocate, in the case of Mycon
Court has not laid down the law
the View that if once an assessee seeks for
assessnlent by Way of composition under Section
is .lV?{6] oi’ the Act. it would still be open for him to
Opt out of it and seek for assessment under
* 1[é1tthe rate of four per ce1’1t.]I
31
14. Section 17 of the KS?’ Act” pro\IideSr’»for
composition of tax. The reievant provision VVhiC?1’1..~’~€1JT’i’S~€’.S'”‘ for”
consideration in the present appeal is sL1bV__Se-ctiof1″~ 6 of» _&
Section 1’7. The same reads as i’o11o\-fie. _ V _ _ V
“Sec.17(6){i) Karnataka Ta}:-v_tA.AAct.’V n
Section }7{6} {i)’_
contained in Section t..V_g,eibject. f.OHSVEA,1Ch
conditions and in as
may be Ae;SeS:sth’g”At1thority of
the ar’:eétTvj’;?1f1et3:/2,.V’Vif-.et’~c1VeaIe_rHlgiabie to tax under
Se’ct1’on accf/’Pt in lieu of the
amou{1n_Vt pf by him during the
.«.§;year und’e’1<._thHis by Way of composition an
on total consideration for the
évcohtracts executed by him in that year
:State in respect of works contract
spsecified in Column {2} of the Sixth Schedule
ii) Any dealer may appiy to the
assessing authority to be __
permitted to pay t.he amou_nt_fl._4i_i’-._
under Ciause (i) and, on beirj1g’so_~ :_.
permitted, he shat} payV__t:ax. i
advance as provided. ‘for _:.u_n*der in
Section 12-13 and” all
provisions ‘S-ecxtion
mutatis mutVan_ti’is_ shail. A_app1y:’:§to
this sub section]s;’;
iii} The amount 1–i11dei5;elause (ii).
‘ ””su’ovjeCt to such
may be necessary
‘ ,.4’:”eorn’p1etion of final
No tax shail be payable under
tiii.sj~..s”ubi’~~section on the turnovers to amounts
‘paid. fej. ‘sub–c:ontra(:tors as consideration for
exvexfjtation of works contract’ Whether wholiy
” riwaéorvwpartiy subject to production of proof that
Vsueh sub–eontraetor is a registered dealer
.. Hie ” it A
liable to tax under the Act and that
turnover of such amounts is incltidecl
monthly statements or return of ttirnotier, it
the case may be, filedmby
contractor. ”
15. Ifa dealer is liable tol.t’éL”2i.Vunde’l” Section t.o S’
elect for composition. inlieu olf_ahiiour1t_V of ‘payable by the
assessee during the yea”1″=.~ion ‘iihef,t,ol.4éi’lVt:(:Q»fisideration for the
works contract e>:ecutec’l”b’y~ y.ejar in the State, in
respect of woijks5t3o.i1traict’specified irimcolumn No.2 of VI
St:hedul’e.l”‘iThe’j;.rate}:of wotil’Ci”l:>e 40/o. Conditions and
CiI’CLll’1}S-tai;l{“.€S’ ]_)Vi’e.:écribeti’–..girlder the said Section is to be
found in of the Ii.-érnataka Sales Tax Rules . 1956.
~ , A Rule ‘ 83B rezids a駒i’ol__lo_wvs:
Composition of tax in the case of
lAV.l.Ve”2iecuting Works contracts- (1}’I’he
elects to compound the tax for any
y.eeii§_ tinder sub-section (6) of Section 17. shall
*n,_suSl5rz1it. an application in Form 8–AA to the
~ASS(3SSil”lg Authority each year. within [one
34
hundred and twenty days} from the date
(.'()fI}i”I1€’I}C€’i’I1EZ11l of such year. or of the bUSlI16’SSl’~’l’
if he has crommencecl the business diigmg.
Course of the yeariand such application. .
filed by the dealer electing tofeonrtpeurlid l£l’l€V:ltE?~.)_§._l”‘V’l
shall not be permitted to be 2 ” A
{X X x X x X}
(2){l]The assessing Wpautuhority lhavilifig
jurisdictiori, after Jjlsmzch _’\?erilieati=ol’11_as may” be
necessary permit saeh l’de.aler,_lsuj’bjeet to the
concfitions speeifie:d”‘m~ .;éi1b~’rt1’lte to in lieu
of the 21I§_lOtt§}.1_’ of §pa”yable_lb}.k “l1-Em during the
year, .o’i’~.jjwhie_h’p. such’ permission is
g;jaI1t_edA,l’a_r: ..arnotm_t””.by .w_’ay of Composition as
prlo-vietedlm L5] of Section 17.
(ii’)S,uCh7’permission for composition shail
J!’l’be§_gra.r1ted\3vith–iri’ thirty days from the date of
_V re_eeipt..’vTo{._the application during the year for
composition is applied for. The
l’ lllpermis’-s_1:)l1 shall be in Form 8-AB and shall be
it \-ialld for the entire year to which it relates.
Com1’1’1<~rrcial 'I'a_xes] or [Commercial Tax Oi'§TiMc:er.;."i.'l;.
DJ
LI}
(1'ii]The [Assistant Commissioner of ..
may Caiicel such permission, if the dealei'.-fl"
{a} fails to pay tax in art}? rtiorith :\J'\i"iLlf1i],lV'l.l'1'CV
time specified; or
{b} contravenes any'-vproyisioh voi''the'*_Ae't–ao'r''' '
the Rule made thereunder]
Amendment to Rate' 8–By is it
in rule 8~B.of the:.saiti:rt1les;»_irt.sv1tti;i:€1};e(1):-
For the ._.wortw’er1ty” shall be substituted:
it ._Afte_rV ‘«the “course of the year”, the
l.__4f’C)ll.Vo\2V\}’i:_1g shall be inserted. namely
iii. *
“a1’1-dyilsuleh V’appliCat;ion once filed by the dealer
leleet1rig”‘”‘i:o’V compound the tax shall not be
‘pei’m_it,ted to be withdrawn by him”
g’
proviso shall be omitted.
36
16. The words “and such application once filed by
the dealer electing to compound the tax shall no’t’*.be
permitted to be withdrawn by him” came to be
the Karnataka Sales Tax (amendment) Ru1es.””~_2:O{I1_”.~.iixiiltlfi.
effect from 8-6-200i. It. is contended; ‘Chaiij.zalri§/_a.Vv”then”.
learned Counsel for the appelianiwassessee, their abovev send
words came to be added to SU.§;”Rul€ {i}, width
effect from 8~6~200l a.nd,.– as sueih’*dn”assessee«iwas prevented
from withdrawing the c¢’£ri’p_:;s:1t’,:_gf;’:;:a£1n§1=A.§p¢ed with effect
only from the_’s:-V1__id :dat’e’,f p’eir?Ltiie_1’iié;ri}jxlithe period of
assessntieni to _31~3~1998. The said words
added iofisub Rule’vV[A:_i.~},_:oii__l{L1’1e 8~B not being in existence
during theEa:sVsevssrner1’ir._Vperiod in question i.e.. 1~4-1987 to
31~3e§i9iV98 canno{..1::>e applied to the facts and circumstances
‘o:’.:;hé czalse :a_n’d.z1<:eordi13gly submits that the reasoning given
lay of the,Con;:Vi:..i,ssi()11er of Commercial Tax in his Revisional
ordeefdafged'i3l_<1.513~2OO7. passed in exercise of power under
fVSecti.o1?.. 22~}X(2} of the KS'? Act. is erroneous and liable to be
set aside. The undisputed facts on this issue in the
iiistant case are: the assessee had opted by way of4e.]:e'c-tien
to get the eomposition done under Section l7{61 _
and had obtained an assessment order_-on….i2944fl999_"
(Annexure B) which resulted in fitirig
Joint Commissioner of Comnie_rCia1V"7{'aX (App'ea}s)
came to be aliowed by order 22-'8–'2Gt:)O and the
assessee having ac:cepted"~V.§he _shariiei"i:r.i .eii"ect wodldiiviresuit in
an inevitable conclusion that assessee'dVid_'_'..not have any
grievance in, ;so~._f'=;1r =as,g eortipos-i_t–ior1__f'method adopted
partieuiarly .hiatfirig_V"11cot.«..ei5'erosed the said order of Joint
COrI1rI1iSS'i'(}.i_1'€'I',Oi'; the dealer has accepted the
order ipasseditinder Seetioh 20 of the Act. dated: 22~e~2000.
v€'he_n themadditionai Commissioner proposed to
revision.Vifjroeeedings under Section 22–A{ 1) of the
Act '.,§t1O .~l]1t_)t&?;1AVV by issue of notice dated: 2–9«2002, the
~'«4___V'~assesseeV__iAh its repiy dated: 24-5-2005 sought for withdrawal
"–E'ro.r_n t:on1posi't',ioz.i method and sought for being assessed
under Section 5–B of Act. There is no separVat.e"<.Vor"
independent application made by the as'sess_ee '
withdrawing from composition method… it is seen" i'ro;m Sciause-._V
(ii) oi’ Sub Section 6 of Section l.’7.:”:.tl1e_”dealer Will”
apply to the Assessing Authority–.V.i’or p’errniti.ingtVo’vpa_y–‘ithe
amount under clause [1] and _o_n’-.’oei.ng so ‘–permitted, the
assessee is required tovpafi’ _th’e i’n.Sjadv’o..nce as provided
under Section l2,.–_B of _E~1’iF:._l:’\C’t’- aisidfiavllvél”t:h’e: provisions of
Section 1213 the”Actfihaitellibeeltir.rr;ade'”applicab_1e to Sub
Section (6) of i3_ee_tion Vlifiwflittanciis and the said
advance tax _;5afivSd~Vwo:u.ldvneeessaiily be paid subject to such
adjustrnent, has it S’–rna.y”‘*«.__ai’l’se on completion of final
assessrneni. The provision of Section l2~B reads as follows:
1233 l5aj}fIient of tax in advance~{{l}
;t.:o’~.such mles as may be prescribed.
“T._evér§¥’_’aea;’e’£ shall send every month [X X X X } a
sta.__te’1ri,eSni containing such particulars as may be
p’resé:ribed including the taxable turnover
it l”v.during the preceding month and shall pay in
advance the full amount of {tax payable by him
[under this Act within twenty days after the 2
ciose oi’ the preceding month to which
rekates on the basis of the turnover p21I’t.i.C:”t:1’1aI’_S7VV””.:”‘
shown in the stateme’nt]] andmthe arr’Io’u–ntf*t.so*v.o ‘
payable shat} for the purposes ‘[2; x__
Section 13 be deemed to bea’~anH_amoLintA. due ”
under this Act from Loutah. dealer.’}
1′?! 1
{Provided than’
(i) in the case ofa’i’deaier_.¢iX7hfetre’payment
by way o1’4:;§or1_1poeitVioVI’1′ (1) of
Sect,i0n_Vi1_7 go” _ac.eept.e_dV. theAt.prouvisi’ons of sub
section 1 [AV Ushadtlo not dapply: and
‘=,(ii} in Vi’–he”‘r§dase””‘of’dealer being a small scale
A.iE1dLlS{]’:y regist.e’red’. with the Director 01′
[:5$’h1;C111St;_I’ies Commerce, Government. of
_V £§arnataka_, such dealer shall send such a
«;Astv;ate1_nen’:.oéh accordance with st,tb–section(1) but
in advance the fuli amount of tax
2 payable for every quarter within twenty days
at , after the close of that quarter:}
.1′ ts; ‘ rule.
. /\”‘
it A .
vz
40
(iii) in the ease of a deaier whose
turnover in any year is 1101. more than seven 3 ‘
fifty thousand rupees shall submit stafe_eVri1.eIit:§SL’*
for each moriih in aec0:jdahee.wi1h_v. _s’ub– ‘A
S€3(.’li0I1{1] once in a quarter arid p_ay’ii111adVar1Ce
the full amount of tax payable ibr_ every –.qi;’x’;j1’I7t§I’
within twenty days after theyyVe2»0se ol”‘{h_ai aquarier
to which such tax ire-1ates,E”” -.
Provided 1″urt11eIr:Ih’a1:b =i11e.._dfuA1fi.i.Vainount of
tax payahi4e::by_tl1e_’ the year
as rediieed the idaxwalready paid
under withiri thirty
the:f1::i’i*0ae.ye’f tiiedyeardio which such tax
1Pro’\ridedi.A’ai:_s”C«–._ihadt where the tax payable
for au:’1y_V Cguariier a small “scale industrial
“‘3’«:.urider1aki1aig«ianot paid within thirty days after
thieVA..e1’6’se of the quarter to which such tax
fs.ii.el1 undertaking shaii be iiabie to pay
Ea); .ihei’e:ai”t’e1′ as provided under this sub–seeti0I1
2 (.:’}<i'C,IL1.dxiI1g ihe first proviso]
Act 5 of 2000 (From 1.4.2000}
{[2} If default is committed in the payment.
of tax for any month or quarter as the case 5 . i
be. beyond ten days. whether or not. a stat'e.r_nent«..
as required under sub~seot'.ion»A{~l)_yis l.'i1edV;'u if"
the arnottnt. of tax paid is lessrtlian it
of tax payable for any month oi=ycl1'uart.er,ais.the
case may be, the dealer'defaulting'..paj,:nientgVo"l'''' '
tax or making short pay_r11Vle:i'tt_ tax' 'shvallui-in
addition to the interest"oale'u1ated at the
rate of two per cent. date of
such default', or to date of
payment of .tax{:'or_T V up. t V ' 'date specified
for pa5'_n1e:_nt;.v_ tinder Section 12,
1 l' ['{[3}}: liiiljfioihs1;44eh__:s't.aten1ent is submitted by
a dealyerl ttnder'.lsubh1's.eoti0n [1] before the date
jrpreserihed or if the statement submitted by him
to""t*–he'l assessing authority to be
._ineo«rreet'vo_r incomplete, the assessing authority
the dealer provisionally for that
A V 1noVn.1_}:1't,he best of his judgment. recording the
reasons for such assessment. and proceed to
V " 4_ dernand and Collect the tax on the basis of such
aassessnient: [[r/W rule 17(2)}
Provided that before taking action under _
this subsection the dealer shall be given
reasonable opportunity of being heard]
[Exp1anation~For the purpose _ .. Of '
Section "Quarter" means the'Npe'ri.od".s'of:.three:' A
months e1'1diI1g on 3151- clay 'h315'~_day' of
August. 30"' day of Noxfiember a11_d'28'*' {or
29" day] of February.}
[3~A] When:_4_'''mak.i:ngV_ : assessment oxtder
subsection (3). the :sAsses:'s§'V1'1.g._A:jt:.horit.y may
also direet_'t'he deahlerto ad.-;fitto1'1 to tax
21vssess'ede;' » a
hh ta} riot one and a 1'1a,1ft}:fI1€S but
Vhot_VV1Vr:ss*v_th'a}1 one half of the amount of
_ V tax._g_I__L"1«e. on turnover that was not
V, dise1osed by the dealer in his
V h = 5:t:;aten1e1'1t.: or
' 'V~V't:(j}'31.';1ot exceecEi11g one and haif times the
J tax assessed in the case of faiiure to
submit a staétement]
{{4} {fat the end of the year it is found "
the amount of tax paid in advance '
dealer for any month or quarter n1f_,l:oi=. .
whole year in the agg1'e,glat,Ve"wa's"..fes.s
the tax Payable for tl1at.:"1«(f1C5'\l3_Atet*1"lV
or the tax for the s_2\;hole"y_ear as.'Vl'in;a1ly
assessed. as the clasedlmay "b3*V-lnaoire
than fifteen,– 'per th-»e_ assessing
auth.ority may 'direct to pay, in
addition to petiavltyfi/:hi"Ch shall
not..be.#less than one 'halfjo.[ tax so paid
__in X X x X} the
a-.r_r_1<'jul1:*;:_tp the so paid fall
payahlve for the month or
"duarter:"o.rl for __whole year as the ease
mzay be! A '
vl"Provided,t_ha1r no penalty under this sub»
sdseetion shall be imposed unless the dealer
has had a reasonable opportunity
'()'f't&'_'.,Vl::::)V\/'1I1g Cause against such impos1t1on;]
_A'i{Provided further that no penalty shall be
levied under this subsection after a period
44
of eight years from the close of the year
V»
which any tax paid in short relates]
17. Under Section 128 t.here…is__a duty,’
cast on every dealer to declare the “taxabl..e’ turnover
the preceding month and t.he’l_dea.1er”i’s.. lrer1_t1ireld
advance the full amount. of taxdoagxgabie unjder this
Act within 21 days after “month to
which such tax re_lat.es on the basis
of the tttrnovef: A:iVn’:’l.t’nett:statement filed by
the assessele, relex*antc’i_’Rt:l-e apfilicable in, so far as
payment of 5i;.1–:1 ad3\.{ance”~is concerned is Rule 17. The said
Rule reads __
“‘–f_'[1’Z.[Pay’ine–n of tax, in advance.
itxicimbuursemefit of excess tax paid on
:l’:i11;_;!i1stzfial ii1p’~u–ts,etc~§{(1} The statement under
(l) of Section 12-8 shall be {in Form
“ariti:ir;x.”t’l1e case of an industrial unit in }”*’orr11 3
A along: a statement in the form of Annexure
t.ol’E’:_orr:13] and t.he return underisub-section {3}
V ” ofVVVSection 25-8] shall be in Form 3~B and shall
Vxk} M/M.
i E
be sent in duplicate to the Assessing At1.tl10ri_i»y.
[or the Registering Authority. as the case n1;;y”:3:~,..__i’ 5 ~
. so as to reach it withinltwenty days] arid the.
close of the month to which such4staE.en’1e’ht;0rV”
1-etum relates. Such staternentgor re? p7rr17shall”-be”if–..__
accompanied by a receipt i’r0rri«.Aa”..Govejrri.ment
Treasury. a acrossed p0s_fLla~l._ 01’derV.__ a-,_ci*Qs”s.eld’ l
cheque or a Crossed (Zl61T1t’–_’;t’f’1VVVC’l»._Cl1′.'<)._ f'L ir.1.'i'ayQ_urJ-53f
the Assessing :«tj'_i3eA'*,Regist.Aering
Authority. as the case=i.liI1ay~lbe,}__.ahdfei'1'eashable
at a post gf"i"ice/bahlksituated' place of
locatioribf thee" lpffice authority!
or the. lo:r"'the Registering
Atiivthcrityjfls maybe.} and encashable
atha post tsa_ril: 's1_tuated in the place of
local the oiiéfthe Assessing Auth0rity[or
:ti1eLI{egiVst-ei'ingl' Authcrity. as the case may be .]
xix} 't'hel"ull arnount of tax payable by
_him'0nl._thve__basis of his actual taxable turnover
V"K.,,.\°l'L1Vl}"iV.IA41"5/ifl,l'l4bmIE"l0I1l'.l'1 to which the statement. or
ret u~r~n_ i'rjei21t.es.]
[Provided that the statement. to be
V " '"~.4 L'-'3L1l5I}'1i1.'i(?C?l for the month of April 2001 shall be
48
direc:t.ed to pass appropriate orders suitable
iiiodifying the assessments…@. We there1’o1’e. __
request your good authority to canoe} thedd
composition benefit sought by us and to ass.e_ssVd’x.K.
u/s. 5~B of the Act and thus render jL1st’;ie’e
us. We have fiied herewith purchase sta’t1eine{nt:s;”»: ‘
Expenditure incurred detai1s;;”RA ‘proves it
the works Contract undertaiten “no it
transfer or property is irL4roi<.:ed ette-..Vier_ehat)ii:r1g
you to finalise the assessrnent.' _
18. Thus. the assessVee_Ain_ qgevstiorz Fully aware as
to the nature of tra.r1saeti,o*n~ar:d Vbei:1g’e’0_ns'(;i.ous of the same
had e1eL:ted_ ifoxbe .governed- by. alternate method of taxation
nameiy eo.1_n;:osit.iVon;-. ‘Was no compulsion on the
assessee to opt for inethvod taxation as provided under Sub
Sfifieetiion o’i7.Seet,ionmt;7. It was voluntary C1’10iC€ and it was
“t~.ht».;_;m iLi”1Vti’–~_va:SS€SS6€ on its own Voiitioh. Thus, the
atssessee Vbfiifigtltktélre oi’ the fact that it had iess than 5% of
hworks eQr_it:rac:t im-‘oiving transfer of property would not have
“«,/}£;V<)_se'£A_: for composition tinder Sub Section (6) of Section 17
50
the Contract. and the tax thereon for
purpose of payment of tax as ‘V’
judgment of the Supreme Court .
chosen to hold in our Vjilexvl’agaiiiisif ‘t.’.tV1ev'”‘
assessee. The Appellate has._r1g.htly
in our View held th’atv.”‘the assesseev.vha_’v’ing
Voluntarily, and with of
the features ofiftihe of
taxation. opted to cannot
be heard question’ ‘sul:§seVq.uer1t’ly” the levy of
ta); . Revisional
Aut.horjtyl_lll;~after’ iggoiuaog option under
notieing the iegal error
eo’rnfn_ittedll . the Assessing Authority, has
rightly’ ehos’e_nl’to” review the assessment order
_;jor1i.i:he ground of prejudicial to the revenue of
State. The order of the Revisional
” fully backed by Section 17(6) of
.””lthel;i’;%j:t’ also by the ruling of the Supreme
Coti.rt’.”””l’he Appellate Tribunal, on the facts of
.. this Case is perfectly justified in confirming
v _ “lithe revisional order”.
19. One another aspect which requires to
by us is with regard to applieabil_it::y~..e. the
antendment/added words with »Hfrorn”._8~:6w–2_O’O_
Rule making power is a delegated Legi_slation. ltgpannlot ‘oxfer *
ride the statutory provision naniely.Section..:1″?Et3} ‘act.
Sub Clause (2} of Sub VSe.ction.’rt{l5}”.otlj l7’ postulates
that assessee after elect.ir1g method
would be pern}it.ted_-.byauthority to pay the
amount urider’flat:-se_V__{.l erily on being granted the
permission” lldeaieif would pay the tax in
advanctéfas pr()videdAAe4t1ndenr__’Section 12-13 of the Act. In effect
it would that oitcebernlitted under the Act of election
by vthfie assesseetl”thee___assessee cannot retrace the steps and
‘&1§lfi’}it -t0″,Ci£.)_ “t1__11do what has been done. The same is
li:’n:;l)erniVisslib]_elftihdei’ the Act itself, which is the only
conclusi’or1.”which can be drawn by reading the words in sub
._:c’l::1Iu..se {2} of Section {6) of Section 17 of the Act and no other
U”!
2.0
the Rules. Thouggh Sri. Chaitanya Hegdelhe learned
for the Peliiioner would contend that Rule 1’1Ei\’iIT;g:”CO}’%lV€”..:l’1’1lis-, ‘
effect on 8~6»2001.. is to be interpreted’ asi5fo’syfiie::{i’~xexiii’-_
nature by pressing into service ihe”‘:de€:’i:sio:n of {he
Apex Court. in Hitendra Q sflafitate-‘E of
Maharasht-ya reported in AIR that
law relailng E0 righi ol’V£:e.ili0_1jusu’los1’antiVe in nature
can only be prospectiveondii. e;;n1ioi”.«’heVIioeiieospeciive and
accordingly added Words in
Sub Rule (1):: jhsvsdio be substantive and
not .Losg§ree with the same since
the Acid’ iiself $30-Orrecl proposition namely
p€I’l’I1i:{:’:’svi()_Al’1 being gréiritied ihe Assessing Officer when so
delecztjed they assessee ii. cannoi be said thai. the assessee
‘Veinop_Lion=.i,.o_}.withdraw from such election. The Act. does
11of._.provi.de”2_1n option to the assessee io withdraw from
*.eon1posii.ioi1 scheme. The amended rule only clarifies the
[l] 82 (ii) of sub~seotion [6] of section 17 which has
54
to be held procedural in nature and thus it. woi,ild_’b_e
applicable to the period anterior to amendment alsof’ ‘ d
20. It is well settled that a dis-i.i’nc’i:i.r)r1 fl121s.t”of¥g;e drn.af.;ie7.,
by the Courts lvhile interpreting profiisions’ of taxing’ s.ta’i_ti_t¢]–.
between charging provisions _impose__ the
and machinery provisions’. xxrhipc-h-dduphrovide niac’i1i.ne:f3; for the
quantification of the tax collection of tax
so imposed. V .\N\E1.i_\l(3 are construed
strictly, ddgednderally subject to a
i’i_s_?:UI{)lI£.~}”-L?Ovf1_i%.l.i’ttC:l:lE§_§1. P’lor:’.bie§ Supreme Court: in the
(vase Company Limited Vs.
commerciht :e*a:§”‘o_f}E”;:ei§;_”_.’eKota and others AIR 1981 so
. _ 1 33 :{.h’as~ held has-..fopl_low:s:
_V “‘Fdl’1e.Va1rgi.11r1ent pressed be-I-‘ore us on behalf oi’ the
.is»t.hat since Section 7 of the Act does not
expressly: say that a registered dealer who has not
it filed return or a person who has claimed that
his ‘turnover or any part thereof is not taxable and
ffghas not paid tax due in respect of such disputed
turnover should also pay interest on the tax
is Eegitimat.e1y due to the Government. 9 V
by him. no interest can be ctaimed Llnder
of the Act in such cases. SeCtj1’o¥i 1* z§sC:t’W_}1.ieh:t.v
deals with the submission 1:et.i;1rns’._i’s
Charging section but inachinety” sectt:ion,.:’_v1ti
settled law that a dist:ine’tion. has to_V_be.”‘made”
Court while iiiterpreting ‘At,-he…joroy*isions«’of-a .12-axing
statute between eft–atgingp2.royisions’which impose
the charge to tax and” which
provide the~:tn’a.ehiinery’ -the’_q_tian’:.itieation of t:he
tax and of the tax so
imposed. ‘];5roy§isions are construed
~ are not generally
sti’bje’c4t. to The courts are
expected toV”coasi~:rLi”e the machinery sections in
gsueh a heat1i’1er that charge to tax is not defeated.
above 1itiIe****oi’ construction of a taxing statute
__has’«.be.env _adopted by this Court: in India United
EC\Ar’i’i’1t’S’~._yvI’;i€n1″_’vV.Commissioner of Excess profits Tax.
£3omb’ay.’C{1955; 1 SCR 810: [AIR 1955 so 79) in
wI’ti’ehvSectio11 15 of the Exctess Profits Tax Act came
C ” tttffor COI1Sid€I’::1Ii.iO1″1. The Court observed in that.
tase thus {at P82):
56
‘That section is. it should be en1phasise–d’;.__’_i’ , A’
not a cha1*gii”1g section. but a r11aei’?.i_’r1e.ry._ ‘M
section. And a rI1ElChiI1€l’»’y~ section sh*o.L:;1dV” ‘
be so construed as to :effiEi3tteE>1tieA.’
charging section.’
21. It is no doubt true thatKs~t1wb RVu1e”(‘i–} 8–B of
the Rules came to be vi”whei”e«.L1nder the words
” and such app1icationAVoV_rii<:eV fiiéealer electing
to compound" "not*:.'"be….fSermitted to be
withdrawn:py.;_i::xi;?*"—ca{h:é'j;a.£§ at iihserted with effect from
8~6~2G7O1 t',h_otigi1 "i1j1__ existence as on the date of the
a.ssessmer_1_t'oV1"der._"29–4~1999, it was very much
prese-11–t as oh t.he'e11ate'V'oI'hpplieation made by the assessee
ii'"seeitiifig»–f'"i,oVVi'xyithdréi'iX}'««I'rom composition method and for
under Section 5-8 of the Act by its
apgtiheatioriih 24~5~2003 and 21130 as on the date of
isstiinggz' notice under Section 224(1) dated 2-9-2002 by
"«_"_:,?r1e 4'A(:idit'.io1'1e1i Commissioner of Commercial tax. Even
oilierwise ii is we}! mcrogiiiseci rule 01' iI1LE.'1'p1'€1dI.iOI1
aI11€'I1(h'1'1€I'1I wfiicrh is by way of a criarifieatiori;"tvo_uid:'he"
useful aid in construing the existing earlier e_ver1"
though such ameiidmeiit is not
A subsequent legislation on t'V.he_.4_sar1ie'–. éuhjeet ..
into by the Court in 0rdei*i»::to see" hgiroper
coristructiori to be ptivtiup oii::VAdeii'V1_ vtrherevveither it
is silent or £1£11bViguOtiS.W in the
earlier 1egis};i"tioiiL:V1"thei=i iegislation would
guide the bropdeij i.iit:erpre'i:aAtiC-fitwhich is to be put upon the
earlier.
22. 31-1, View of 1~h€K,P’1b()V€ proposition of law laid down
uiollowing the pririoipies ehunciated by_the
‘ H'(‘)’1′”~1.’1§)i'<?,_VSli}3i.I'é'i1i€ Court as discussed hereinabove. we are of
{he'veoiisidveireélvopinion that Rule 8» {BN1} of the Rules which
has come.' into effect from 8–6»2001 is aiso appiicabie to the
xperiod anterior to the same. since the said addition is
cEari["iCa1():y in I1d1,L1I'€. ACC01"ding}y.. Question
answered againsi the assessee and in favour of t_1j€=: Ft'3_\jV'é3'1'T.'1",1'€._: "'-, '
23. Accordingly the foliowing ”
(1) The appeal filed ~-/the xassrvssss-axe ‘H1;1ve¥’eby
dismissed. . n u ‘& V’
[ii] The SLibS1.a1’1″L%£{}’; forrnuiated
1″1€§!’€’i”Af1; VL:i}1bo\:%_’e _.s,.§;3insi the assesses:
”
[iii] ” No g1?dé:jr_;1s ,:6–s_:o”sg,s.
S&f~
E”?
.
S&gw