ORDER
R. Gururajan, J.
1. Petitioner is a Civil Contractor at Mandya. He is registered as a dealer under the Sales Tax Laws. During the assessment year 1996-97 petitioner executed certain civil works for the irrigation department of Government of Karnataka and received a sum of Rs. 31,85,983/- as consideration. Some of the contracts executed involved use of material as also labour, while some contracts were pure labour contracts such as earthwork excavation without involving use of any materials. Petitioner opted for composition assessment under Section 17(6) of the Act and filed return in form No. 8 and produced certificates issued by the irrigation department in support of the works executed and the amounts received. The assessing authority verified the same and considered that out of Rs. 15,27,866/- related to pure contracts that did not involve use of any material and therefore outside the purview of taxation. The balance receipts at Rs. 16,58,117/- that involved use of materials was subjected to tax @ 4% under Section 17(6) of the Act. The said assessment order was reviewed by the Joint Commissioner of Commercial Taxes (Admn.), Mysore Division, Mysore. The assessment order was considered to be erroneous and prejudicial to revenue for the reason that the exemption claimed by the petitioner was not supported by any documentary evidences likes tender agreements, work order copies, etc., Aggrieved by the revision order, petitioner filed an appeal before the appellate tribunal. Appellate tribunal dismissed the appeal. It is in these circumstances, petitioner is before us raising the following questions of law;
1. Whether the levy of tax under Section 17(6) of the Act is attracted in respect of receipts relating to pure labour contracts executed, not involving use or transfer of property in goods (whether as goods or in some other form)?
Whether the appellate tribunal is legally justified in upholding the levy of tax relating to pure labour contract receipts, on the view that under the provisions of Section 17(6) of the Act, total turnover constitutes total receipts and liable to tax?
Whether the decision of the Apex Court in 1997 104 STC 134 authorised levy of tax even in respect of pure labour contracts not involving use/transfer of property in any goods, merely because the petitioner opted for composition assessment under Section 17(6) of the Act?
Whether the appellate tribunal is legally justified in approving the levy of tax by holding that in a composition assessment, total receipts constitute total turnover that is liable to tax, irrespective of the fact that the contract did not involve transfer of property/use of any goods?
Whether the levy of tax under Section 17(6) of the Act is authorized even in respect of works contracts not involving transfer of property in goods and thus not listed in the sixth schedule to the Act?
2. Heard the learned Counsel for the parties and perused the material on record.
3. The Assistant Commissioner of Commercial Taxes, assessing authority has chosen to hold that the taxable turnover amounted to Rs. 16,58,117/-. The said order was challenged by the petitioner in appeal and the appellate authority has chosen to set aside the said order in appeal. Against the said order, a further appeal was filed before the appellate tribunal. The appellate tribunal has chosen to frame the following two issues in para five of its order;
Whether the total amount received towards works contract is to be subjected to compounded rate of tax under Section 17(6) of the Act?
Whether the exemption can be allowed under Section 17(6)?
Thereafter the appellate tribunal notices the option under Section 17(6) of the Act by the petitioner, and therefore it has chosen to dismiss the appeal thereby confirming the order of the revisional authority. Let us see as to whether the said order is acceptable or not.
4. Section 17(6) of the Karnataka Sales Tax Act would read as under;
17(6)(i) Notwithstanding anything contained in Section 5-B, but subject to such conditions and in such circumstances as may be prescribed, the Assessing Authority of the area may, if a dealer liable to tax under Section 5-B so elects, accept in lieu of the amount to tax payable by him during the year under this Act, by way of composition an amount on the total consideration for the works contracts executed by him in that year in the State in respect of works contract specified in Column (2) of the Sixth Schedule (at the rate of 4 percent.)
(ii) Any dealer may apply to the assessing authority to be permitted to pay the amount under clause (i) and, on being so permitted, he shall pay tax in advance as provided for under Section 12-B and all the provisions of Section 12-B mutatis mutandis shall apply to this Sub-section);
(iii) the amount paid under Clause (ii), shall be subject to such adjustment as may be necessary on completion of final assessment.
A reading of the said section would show that an option is available to a dealer in the matter of permission to pay the amount under Clause (1) of Section 17(6) of the Act. A similar provision has been considered by the Supreme Court in 104 STC 134. In the said judgment, the Supreme Court has noticed a salient feature of the option and thereafter the Supreme Court has chosen to say as under;
The first feature to be noticed is that the alternate method of taxation provided by Sub-section (7) or (7A) of Section 7 is optional. The Sub-sections expressly provide that the menthod of taxation provided thereunder is applicable only to a contractor who elects to be governed by the said alternate method of taxation. There is no compulsion upon any contractor to opt for the method of taxation provided by Sub-section (7) or Sub-section (7A). It is wholly within the choice and pleasure of the contractor. If he thinks it is beneficial for him to so apt, he will opt; otherwise, he will be governed by the normal method of taxation provided by Section 5(1)(iv). Sub-section (8) provides that the option to come under Sub-section (7) or (7A) has to be exercised by the contractor “either by an express provision in the agreement for the contract or by an application to the assessing authority, to permit him to pay the tax in accordance with any of the said sub-sections”. In these circumstances, it is evident that a contractor who had not opted to this alternate method of taxation cannot complain against the said sub-sections, for he is in no way affected by them. Nor can the contractor who has opted to the said alternate method of taxation, complain. Having voluntarily, and with the full knowledge of the features of the alternate method of taxation, opted to be governed by it, a contractor cannot be heard to question the validity of the relevant sub-sections or the rules. The impugned sub-sections have evolved a convenient, hassle-free and simple method of assessment just as the system of levy of entertainment tax on the gross collection capacity of the cinema theatres. By opting to this alternate method, the contractor saves himself the botheration of book-keeping, assessment, appeals and all that it means. It is not necessary to enquire and determine the extent or value of goods which have been transferred in the course of execution of a works contract, the rate applicable to them and so on. For example, under Sub-section (7), the contractor pays two percent of the total value of the contract by way of tax and he is done with all the above mentioned botheration. The rate of two percent prescribed by Sub-section (7) is far lower than the rates in First, Second and Fifth Schedules referred to in Section 5(1)(iv)(a). In short, Sub-sections (7) and (7A) evolve a rough and ready method of assessment of tax and leave it to the contractor either to opt to it or be governed by the normal method. It is only an alternative method of ascertaining the tax payable, which may be availed of by a contractor if he thinks it advantageous to him. The Constitution does not preclude the Legislature from evolving such alternate, simplified and hassle-free method of assessment of tax payable, making it optional for the assessee. The object of Sub-sections (7) and (7A) is the same as that of Section 5(1)(iv); it is only that they follow a different route to arrive at the same destination. Several taxing enactments contain provisions for composition of tax liability which may sometimes be in the interest of both the Revenue and the assessees. It must also be remembered that in the field of taxation, the Legislature must be allowed greater “play in the joints”, as it is called.
The said judgment would show that the said option saves the contractor from the botheration of book-keeping, assessment, appeals etc. It provides a ready solution to the contractor. Having opted for Section 17(6), it is now not open to the assessee to bifurcate the contract and the tax thereon for the purpose of payment of tax as sought to be argued before us. In fact the appellate tribunal after noticing the judgment of the Supreme Court has rightly chosen to hold in our view against the assessee. The appellate tribunal has rightly in our view held that the assessee having voluntarily, and with the full knowledge of the features of the alternate method of taxation, opted to be governed by it, cannot be heard to question subsequently the levy of tax by the authorities. The revisional authority after noticing the option under Section 17(6) and after noticing the legal error committed by the assessing authority, has rightly chosen to review the assessment order on the ground of prejudicial to the revenue of the State. The order of the revisional authority is fully backed by Section 17(6) of the Act and also by the ruling of the Supreme Court. The appellate tribunal, on the facts of this case is perfectly justified in confirming the revisional order.
5. In these circumstances, this petition stands dismissed without considering the questions of law.