Karnataka High Court
Bengaluru Water Supply And Sewage Board vs The State Of Karnataka on 4 January, 2023
Author: P.S.Dinesh Kumar
Bench: P.S.Dinesh Kumar
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CRP No. 184 of 2017
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 4TH DAY OF JANUARY, 2023
PRESENT
THE HON'BLE MR JUSTICE P.S.DINESH KUMAR
AND
THE HON'BLE MR JUSTICE G BASAVARAJA
CIVIL REVISION PETITION NO.184 OF 2017
BETWEEN:
1. BENGALURU WATER SUPPLY AND SEWAGE BOARD
1ST FLOOR, CAUVERY BHAVAN,
K.G. ROAD, BANGALORE 560 009
REP. BY ITS FINANCIAL ADVISOR
CHIEF ACCOUNTS OFFICER
SRI R RAMANNA
...PETITIONER
(BY SRI. VENKATESH S ARBATTI, ADVOCATE)
AND:
1. THE STATE OF KARNATAKA
REPRESENTED BY ITS
ASSISTANT COMMISSIONER OF
COMMERCIAL TAXES (ENFORCEMENT),
SOUTH ZONE,
BANGALORE 560 034.
...RESPONDENT
Digitally signed (BY SRI. JEEVAN J NEERALGI, AGA)
by RAMYA D
Location: High
Court of THIS CRP IS FILED UNDER SEC.15A OF KARNATAKA TAX
Karnataka
ON ENTY OF GOODS ACT 1979, AGIANST THE ORDER DTD
30.11.2016 PASSED IN STA.NO.1091 TO 1100/2014 ON THE
FILE OF THE KARNATAKA APPELLATE TRIBUNAL AT BANGAORE,
COMMERCIAL TAXEX MEMBER AND DISTRICT JUDGE MEMBER,
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CRP No. 184 of 2017
DISMISSING THE APPEALS FILED UNDER SEC.14(1) OF THE
KARNATAKA TAX ON ENTRY GOODS ACT 1979.
THIS PETITION, COMING ON FOR FINAL HEARING THIS
DAY, P.S.DINESH KUMAR J., MADE THE FOLLOWING:
ORDER
This petition challenging the order dated 30.11.2016 passed in STA No.1091 to 1100/2014 by the Karnataka Appellate Tribunal, Bangalore (for short 'KAT'), has been admitted to consider following questions of law raised by the petitioner:
4.1 Whether the Tribunal was justified in upholding the lower authorities' orders in a routine manner without dealing with the Petitioner's contentions independently on merits?
4.2 Whether the Tribunal was justified in treating the Petitioner as "Dealer" and Business in terms of Section 2(4) of the KTEG Act inspite that the Petitioner was performing statutory obligations only under the BWSSB Act? 4.3 Whether the Tribunal was right in holding that the limitation of 3 years under Section 5(6) of the KTEG Act is not applicable to the -3- CRP No. 184 of 2017 case of the Petitioner on the ground that the returns were not file at all?
4.4. Whether the Tribunal was right in holding that since the Petitioner was registered under the KST Act/KVACT Act and CST Act, the Petitioner was required to be treated as the Dealer under the KTEG Act?
4.5 Whether the Tribunal grossly erred in not even considering the Petitioner's case against levy of entry tax?
4.6 Whether the Tribunal's order suffered from very serious deficiencies and amounted to an abuse of process of law warranting interference from this Hon'ble Court."
2. Heard Shri.Venkatesh S. Arbatti, learned advocate for the petitioner and Shri.Jeevan J. Neeralgi, learned AGA appearing for the respondent/state.
3. Brief facts of the case are, Petitioner/Bengaluru Water Supply and Sewage Board (for short 'BWSSB') is a State owned Board established under The Bangalore Water Supply And Sewerage Act, 1964. The Commercial Tax Department issued a notice under Section 18(1) of the -4- CRP No. 184 of 2017 Karnataka Tax on Entry of Goods Act, 1979 (for short 'KTEG Act'), calling upon BWSSB to show cause as to why the proposed tax should not be confirmed. BWSSB submitted its reply contending inter-alia that BWSSB is not a dealer as defined under the KTEG Act.
4. The Deputy Commissioner of Commercial Taxes (for short 'DCCT'), confirmed the proposal and imposed an entry tax of Rs.34,43,784/-. The First Appellate Court ('FAA' for short) and the Karnataka Appellate Tribunal, Bangalore (for short 'KAT') have confirmed the order passed by the Assessing Officer.
5. Sri.Arbatti, learned Advocate for the petitioner urged following contentions:
• that BWSSB is not a dealer under the KTEG Act;
• the demand made by the revenue is barred by limitation in view of Section 5(4) r/w 5(6) of the KTEG Act;-5- CRP No. 184 of 2017
• the jetting machines which are the subject matter of these petitions are not liable to tax as per the clarification dated July 22nd, 2010, issued by the Additional Commissioner of Commercial Taxes (Policy and Law), Bengaluru;
• that the contractor is liable to pay the tax and not BWSSB.
6. Sri.Jeevan Neeralgi opposing the petition submitted that BWSSB is an industry. In view of Explanation I to Section 2(4) of KTEG Act, BWSSB is a dealer. Therefore, it is liable to pay the entry tax.
7. So far as the clarification issued by the Additional Commissioner of Commercial Taxes that the jetting machines not mounted on vehicles, are not liable to tax Sri.Neeralgi submitted that said clarification has been issued on July 22nd, 2010 and the relevant Assessment Years being 2000-2001 to 2009-2010, the said clarification is not applicable in this case.
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8. We have carefully considered the rival contentions and perused the records.
9. The main question involved in these cases is, whether items in question i.e., jetting machines are mounted on vehicles or not. Same is not forthcoming clearly from the records.
10. Sri.Arbatti, learned Advocate has produced copies of three invoices dated August 27th 2008, March 3rd, 2009 and March 21st, 2009, issued by KAM-AVIDA ENVIRO ENGINEERS PVT. LTD., Pune, and argued that machines are loaded on the Tata Chassis. He further submitted that some of the jetting machines have been mounted on the Chassis manufactured by other companies such as Ashok Leyland Limited.
11. In reply, Sri.Neeralgi submitted that it is not precisely discernable from the records as to whether the order passed by the assessing authorities is only in respect -7- CRP No. 184 of 2017 of the mounted machines or it involves other machineries also. He also submitted that there is no specific reference in the impugned order passed by the KAT.
12. Thus, the factual matrix as to whether the goods involved are mounted on the vehicles or not, requires to be first determined.
13. We are of the view that once the Revenue has taken a stand that machines mounted on the vehicles are not chargeable to tax, the assessment year should not matter. To that extent, the arguments advanced on behalf of the revenue is untenable.
14. In view of the above discussion, the matter needs to be remitted to the file of Assessing Officer for re- consideration to decide whether goods are mounted on the vehicle. Hence, we proceed to pass the following:
ORDER
(i) The petition is allowed.-8- CRP No. 184 of 2017
(ii) The order dated 30.11.2016 passed by the Karnataka Appellate Tribunal, Bangalore in STA No.1091 to 1100/2014; order dated 31.01.2014 passed by the Joint Commissioner of Commercial Taxes (Appeals-3), Bangalore, under Section 13(5) of KTEG Act, 1979 and order dated 09.11.2009 passed by the Deputy Commissioner of Commercial Taxes, Bangalore, under Section 5(4) of the KTEG Act, 1979, are set aside.
(iii) Matter is remitted to the file of Assessing Officer for re-consideration after first recording a finding whether the goods are mounted on the vehicles.
(iv) BWSSB shall be at liberty to file all necessary documents in support of its case.
(v) Petitioner shall appear before the authority after issuing notice to the petitioner. -9- CRP No. 184 of 2017 In view of remand order, the questions of law have not been answered.
All contentions of both parties are kept open. No costs.
Sd/-
JUDGE Sd/-
JUDGE DR List No.: 1 Sl No.: 76