Karnataka High Court
Kennametal Widia India Ltd vs The State Of Karnataka Rep By The Commr Of on 16 December, 2009
Bench: K.L.Manjunath, Aravind Kumar
IN TPIE HIGI-I COURT OF KARNATAKA, BANcA.LQRE
DATED THIS THE 16TH DAY OF DECEMBE1R_;"2V'()(§9_. ~ V.
PRESENT
THE HONTBLE MR. JUSTICE K.1..N'LANJUNATH' _
THE HON'BLE MR. JUSTICE '
S.T.R.P. 11 OF '2008
BETWEEN L A A
Kermametal Widia. Ii1d1a.AI;td.?~;.»' iv .
New known as _ 1 " 9
Kennameizal I11-011-:1 L:t(:'i."* -- 1
No.8/911* I\/I;i1é;gTuInI~:urg Rrjad, X " ..
Bar1ga10i'<3 ~-:j_5§300"73_ A' ~ g
Representé-r_1 b"y'::;:§t.4s '--=J_i{:e'Pfesi.dei1t 81 CFO
Sri.¢f_Xnja11i"{{urp&r. --. ' --
' V " % " . Petitioner:
(By S1'.'L_.V1k1'a11'£ A 'H_Lii«1_g(>}' . Adv.)
V' «,'_I'he «Qf Kanlataka
L Rep1"e..$€I51"t€§d'*by1.he
._ 'C_Qrn1n'i':s,siof1t?r 01' (3o1n1ner(:ia1 Taxes,
'Vanijya "-I1'._er"eg_{ere Karyalaya.
Barigéiiore -- 560 009.
r Sri.Vedamurfhy, GA)
Gandhinéigar.
Respondent:
<~/ l\.) This STRP filed u/S.23{l) of the KST Act. against the order dated 28.05.2008, passed in STA Nos.8l2 and 813/ 2005 on the file of the Karnataka Appellate Tribunal. Bangalore.
This Petition coming on for hearing;~--.4lfp.i_si'lfday. MANJUNATH J. delivered the following: = * JUDGM_Is:;gMi"»:'1_'._.4 « 'V ' it The revision petition i.s".vfiled' _tli.e _a's_se_ss~ee challenging the order 0 pas.sed by' ._tlh_:ell"'--lKa1'nataka 0 Appellate Tribunal in _STA. "N 13 /02005-' 'passed on 2862008.
The i'la%;'i:.sllleadiiigto this case are as hereunder.
The Limited Company engaged in r_nan1E1_pfacVti.11*el"a1'1.d__.sales of small machine tools (cutting V tTo'olsv-..a'ndi~nWea1' parts) etc. The assessee is a dealer ..rlProvisions of the Karnataka Sales Tax Act and tilflder the Central Sales Tax Act also. During the 0' V._as'sessment year 200102 the assess effected sales of M the machines manufactured by it and claimed concessional rate of tax under Section 5--A of..the"KST Act against issuance of Form 37 sold Classified as consumables. _--'Ba'set_i.V"on'.V the". notification dated 7-6-2001 by .
It also Claimed eoncessio_n'~.,of 1% on v.Vt1;1'1._':r'IO'..'T€"I:T payable under Seetiion ""i'~1<2.e ease of the assessee has not the authorities below in 1'egarti -to V'to«'be granted to the assessee n:ot,i:1'iC.ation dated 7-6-2001 KST Act. Aggrieved by the same. the i)i"f?S€:'Iw1"i. petition is filed. The revision petition 5a7C1ni'itt_,ed 1'V.t')H"'A<".2()r]Si(3i(31' the following substantial A c;z.;iest~i.on oi"v1.aw:
it ,. 'i'x..W'het,he1'. the Karnataka Appeiiate Tribunal was right in law in eonfirniing the order the JCCT (Appeais). Bangaiore City Division -- I. 'H/,_ Bangalore. holding that the goods sold by the Petitioner. namely small machine tools, are no'tv_ eligible for the concessional rate of tax Section 6-8 of the KST Act. as per the *' Notification No.FD 143 CSL 7/6/2001. when the same' Wgocds "..'l'1g1_:\;'(3:'\V.:,t?§§I1::'; accepted for the concessional rate"lVof Section 5A supported.by.__~For1n37'?
3. Heard the learned co'Iins'cga1l:j:"or"et-he part.iesIx
4. The learned c:ot1_n:;.el ifo:"'~. assessee mainly contendsmrhlen auth»o';?ities"haV"e accepted the case of the assessee '.u11der'lS'e_ction'.$¥;A of the Act and tax benefit has been gilven to the Jlthe authorities below were not justified co";-1sld_eri'1ig the case of the assessee for the puc»1'§'3ose'of gran't:ing___exemption at a lower rate of tax under .A Se.c_t;'1on the Act'. He contends that when the relief V' nn.de1'.vSectio;1.V5~A has been given to the assessee when the for:°h'j_ No.37 has been produced by the assessee ciairning reduced rate of tax under Section 6-8 in regard to resaie based on turnover tax. shouid have considered the case of the assessee by the revenue. According to him without proper understanding the provisions of Sectio'n_i'5-A and 6-8 the relief to the assessee has been Therefore he requests the Court g_rant_--'the" thvei"
assessee by answering the question cg'i'"'.aw in 'favouiilidof 'the assessee.
5. The learned Governrnerit Pieader._u:Mr.VefdaInurthy does noii."evdiAs_';:ute':'the"reiief to the assessee under Section 5'~--A of: _;w'hat he contends pursuant to the notification -'?-.6-200} the material sold by the assiézssee does.'n'oivVifa_iip.wit.hin the notification dated 7-6-2001 ~ and t1.1Vri1o\.rei'*~tax resurription under turnover tax cannot be H *g_ra--r.iteVd.' to ascertain the actual position it would be proper"*--VAto"'us to consider the notification dated 7-6-2001
2 V. wvhich reads as hereunder:
(V, NOTIFICATION No. PD 143 CSL 2001. dated 7"" June. 2QQ_i* >V " ' Karnataka Ga7,ei'I.e. Extraordiraary, dated h ' !CarI('eH<3c1Izaagfll------I2{}():2bI;No1§iic'(z!I'cmNo.Ff) <':.=;1,2oo2m. a'of.<;~u'~8.0;E3'--~2002.{Sl.«No.893} --« .. 'V In exercise of the f,Iowe.reAfj.
Section 8~A of the KarnjatakahS__a:1'es. (Karnataka Act. 25 of the __(3:o\(Ver=IfIri'I_ef:'tV»of Karnataka hereby l"€C1LlC'€'::§'-S?:\'Fi'I;b'I iII1.I.I'1€':CK1'ié.1€v?3ff€Cl to one per eent.,:"t'he t.'orI1ovey payahhlex by a dealer under SeCt'1o;I_i'6h--eBV'VI"of on the turnover ' _reE_atin,{.-g" Io" ' h to another regisiefed {£ea_V1eIf4'fg)r7_LiSe e_1VsA._(:offi'p*ohem parts, raw '(:ojr'1eo:Inab3'.eVéI excluding such goods 1 to Section 5--A of the said4_Aei.v. II'). »-niigenofaeture of any other goods '*irI:side i:lIAeV'Si.e-1i.e' for sale or for packing of such ggAoodVsA EI'}'c;1V'I'I.'L£i'7&'t'C:lvL1I'€Ci. subject to producuon of a dec1a:éi1Io_I'I from the selling deaier along with t*IvIo';<zV,I_.h;j('vs%;aieIIIem. to be filed by him based on the decI;iI:e1'I.i()r1 obtained from {he buying dealer in the .. specified beiow:
From the reading of the notification it is clear to" that State of Karnataka under the iiot,il'ication_ ldated.lV?'i=:6<2Ot}1 has reduced the turnover taxto 15/t:__ fia}}able.lVby"~a under Section 8-8 of the Act on 'vthe«,iu1*no\'€_1; to sale of goods to another :":7e.gist.e1'éd't. "_jt~1éa-»:.._g;- for"'us'ing the component parts, raw mateif_ialsc-a.hd excluding such goods as specified V" Section 5--A of the said Acts-in goods inside the State for sale sujci'i.:lgood's....n'lanufacttzred subject to production 'oi' the selling dealer along with fI1OI1l,hV'l}{" st,_a1ter11e'nt"!'o_ibc tilled by him based on the declaratiori obt.a'ine.dv frorn the buyer in the "forms specified. A'~._There_fo:*eA.ait--_is,clear that if the assessee has sold the cons'u_mablé_"article and if he produces the declaration from V _ the 1:$'uye1~..;: .t.he"l assessee is entitled to request the Assessing . (5f;':'iC'3..r to"'collect the turn over tax at 1% based on filing of W monthiy statement in accordance with the notification. "The revenue has not raised any corlteiition that the assessee-..clid not file any n'iont.hly statement. nor did not declaration to be issued by the buyers from"tiiie.:'assessee.__ Therefore what is required to be consicierecin i';»;::;_r whether the turnover of the assessee is iiriiespeet' the raw materiai components parts and co1<:_s'urifiables*. ._:il"'theV}case of the assessee white coie1sidei'i--ng--the. .pro.yis_ions of Section 5-A has been accepted thereventieLetreatingjthe sale of the material as Co.§asti'rnable:--. for of Section 6-B pursuant to t_iie'lvii.iOiiViiicatiQeri*in question, the relief cannot be . V -- 43,-' n'/ _ denied to the ii1§S'i1I1#'aSp€Cl. oi the matter has not been co1isid.€'redvl'any one of the authorities below. t'i'hereiforei[=the..questionl formulated in this revision petition has to be in favour of the assessee.
{lie result, the revision petition is allowed. The ll"Oi:"de:'i__pass"ed by the authorities in regard to turnover tax is 'g?/..
hereby set. aside holding that the appellant is enii'iI.e{:1«_ tQA request the ASS€SSi}'1g__{ Officer to collect the Eumeveri ' 1% in View of Section 63-8 of the Sa_1_e.s Tax the notification dated 7'-6-2001.
gii isaes i iS@eE sbb/--