Biddle Sawyer Limited vs The Deputy Commissioner Of Commercial ... on 16 June, 2010

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Karnataka High Court

Biddle Sawyer Limited vs The Deputy Commissioner Of Commercial ... on 16 June, 2010

Bench: Anand Byrareddy

 

I
IN THE HIG H COURT (3? KARNATMQA AT BANGALGRE

BATES 'mm THE 16*" am 0F JUNE 2.61121
Bemae

THE z-mime MR. JUSTICE mama    5  

 

Biddie Sawyer Li-mime!   ' 
A campamg  amass me
C£}¥ﬁ§aﬂ¥€%$'A£;§, 1.9% agzéhaving
Its! V r,wisf.eredA itfflce. Vat:

N6.2'52*,' E)?r.Annie Beﬁant Read

 Wm}, %mmna2»4ae%%,a%25
 . 'A:':d its regianai afffsa at:
*?!¥3a.;§f.V, Attaiika'-« Warehousing
  V rsexz as am'  *
 _  :1'~'..M.'.i'm"iiT Park, 12"' Km, Mysare Ram
'-.;-»_Bairiga!¢m: +~'- sec: 059 

 ;F7ie_'p%&;'32':w by henein by rm

sejrrier. Ma nagep-Finance

%  % M:f_;G ..K. 613:4! ...PETITE€)NER

 {By sm. K.P.Kumar, senior Advecate far was King &

pamzaw g



 

 

Etsai Pharmaceuticais India Private Lima:_e<3.'_,
A campany registered under the*_  
Companies Act, 3.956 and having 

:3 registered office at _   
1*' Ftmr, B-Wing, Marwah ¢'.:e;=21tre_«""   j_ _ 
Krishanlal Marwahfvlarg " =  " '
Andher! (East)

Mumba£--4€39G?2   ; - _  - 
And :3 raglonaiofrgceat'    "  
12*" K:.M., Next  %    %
iwysore mad '   " ' . 

Banga!9re- 5.5-€3'~':.'i.$§;  _ -.
Reprwented,hereIn"E;s~y...V}ta  " 

senior Ma nagvgr'-'F1 manta'      % 

Mrmrish Hingozam   ._  ' ..PE'r'rT'IONER

(Bi v,*.St1r3V. Seﬂcir Advecate for M/5 King 8:
Wdge>         

2§g.«*:»§_.: %%

- ~ The WWW. itemmissianer at' Cammerctai
    ?axes;{Aud2t~22)
  :s\1o--2,LIc Buiidlng, 2"" Fiocr
   %m';)ige Read, Malleswaram
 ' 'Ba§1,ga!ere ~--~ 560 003.

 The Cemmtssianer cat Commemlai Taxes
  Vanijya Thartge Karyaiaya, Gandhsnagar

 

sasmxere - 56:3 909.

$

 



different and mcrdenmny, me kind er mlsinem sn$&§:ued%%  K

is a's%§h3  srLK.P.Kumar, 

Advocate appearing for the cou€'i5a!.. fof th s   .

and the iearned Gevemmerjt   .
3. The facts as are :fo:.:_ti*2§ .§:I iarpcse er

this case are as fa!;!~ﬁw§:f-  2:  " 

These :'pet§tlaVﬁ§e7:~s£ registered under

the Ccmpanta§%.__;_Vﬁu;t,4V' are engaged in the
b;;a§r3amV_fc§.f up§:r¢_hansé'--'§s{___?Paﬂt' mbiets and sale of time

same; .:.*'f'i*:$ pezzaénem entered into a Ccmsignment

 with G13:-:23 smithldine

.. '1A§?i§a'rnjaceLItt§a;?5V Limited, we is their agent. The

   transfer alt their producm be the agent

"",bn. mﬁs1gnment basis fur sate within and oumde

°  ""Ka.;i'fnataka. The agent: sells a aortlor: of sash stack in

 ﬁtamabaka am pays statue admci tax thereaarz. It aim

 



 

stock transfers the balance shock to lts ot1'Ier. tn    

outside the State of Karnataka 

transfen-ed ls sold by the agentVthrouoﬁ.Vl't'  

Kamatalca and remlts the 
respectlve State Governrherlts§«V:L_  secures
Forms 'F' as requIre{:.grnder"leséjr:   In other
States and such  transfer of
not only  also the agents

The petltlonere 'returns every month
 e,nt:lre""ve.lue stock transferred to the

agent' eta". and clalrned exemption of

 san're_"'lhaen'l'i:';:ri; as all the sales are effected by the

epetltlrzner through the agent whether In Karnataka or

 the petltloner does not Independently

l e!'feet__a§ny sale. The petltloners have declared 'nil'

 turnover every month. The Comrnerclal Tax

Cirﬂcer, south Zone, Bangalore, had visited the

3



 

business premises of the petitioners and had.' 1  0 

the books of accounts and did not mite oi.-7tion'.=.:  A'

second respondent, however.' -l.ssued.'_'1'notice"V"  3

Section 63-A of the Kamataka Act 2003 (hereinafter referredeiop as Act", for brevity) proposing to 2008-09 on suoh which were not petitioners replied to the said respondent, thereafter dropped 0 However, the first 0 in V lngs under section 39 of respondent: initiooed' the'seKV.eT'vAct:_'provposino to re-assess the petitioner for yearpzoosese 2003-09 to levy tax effectively on ._0_'i;i1e_"mk tronsfers caused by the agent to its units Though, the petitioners sought to ii.iruﬁ__tii1eir case, it was overlooked. The first passed orders dated 12.10.2009 and i2'0.10.2009, respectively, levying tax on the stock 6 transfers effected by 11143 agents during the T' 1 'V 95 to 2008-09 and aim ralaed tax aggregating to a sum Q?_41'Rs.3§;$*9,923}*'f.., §§nd_j'; Rs.85,34,56e/- resspecmezy. rggs :n:s;%%u§n:ch are sought to be cnauenged sntiva pfe£{éﬁt~1pe:t3ti¢ns.

4. It is being registefed sales acruss India, and who in turn has rm ta)?'{#111fnsV%VVV§§§AI.LjVf=§:f'§§§':LWt.T«100 by declaring its total tumgmr ..§j¢jv§n§f'L1$i'i}e 91' mt arm; the saies s*;'a:-.rjsigr§V:V§?::é&x'zt agent on its behmf In me Sf.:at.;e--- also me stock transfers made T' by its ceiislgrritfxéiﬁ agent: an its behalf ts mates cumicie VF:?§;:m the tyatal turrmver so deciared, the 4""'»."."vj§e§flti'd:1ér"éiaims deduction of tm entire tcatat mmmrer sates affected by me agent within me statue of and stwks transferred) ur3®r the head 5 $9 this Act raising an Tunsusizatname and mega: demaru§,f'f"L:«.V:"--._ whtch is bad in iaw, for the reasan that thz-36"

respondent ought to have natezd mat:-ﬁ'se---agehVt: V been assessed in them other 3tateS ..(1&#hére"'.§§'%had"

stock transfeyred the gmds), s~§ith::'1*a*erVé:"i*.:¢'~t:i.: J foiiawmg the stock transfrs-.'f,..«_th¢?s"';;i§éié!t§§'i§'tee«:fs tALJﬁ1céi}er reiatabée ta such stuck again is": the state of Ka:%;1a7t;a££:§'4 #5 resutt in dcubie taxaéagna arise only on sales and stmk tr.a"ri'str:5'§rs Jsaies, are aitogemer imrnggne 2',a;'xa:':!&its?:V therefare, the impugned leafy % ISA cantentlon on which rm gmunﬁ _ . §¥7€!.4_§ﬁ!'!3piEﬂ"E.ﬁ it Is mntendad that in the absence of V' 3313. pfﬁgtsiﬁ-ns or pracedure prwmbed, in 5:; far as me being requimd has me such Forms cor ether w%,{,,i,,. " afet:.s#'i':s in ressrmf; of the stock transfers, which are 8 ':3 is net acceptabie. The exemption a!Eowab§§7t§ H agent wine has obmined F-Farm in h:§'$W?z§§Arr:g"car;;*§§§t--i;<a{_' "__ extendad tn the mncipai since _4'su§4h--1A taxes V':t'£o{j ' ' pmvided under Ruie 3(2) of me %Fj:$;;2:m%. :s availabte to the agent, w§:il& be name ta pay me tax for me;-Maggi»snmman which is as: cmrerw uf1.¢:%'§"

Gm otﬁijgg; mlncipals awe sheutd get :exer21§ﬁifi':*9as';':-is [email protected]':1:accﬁptat>!e, is that there are Irmumera bia _Vt:afisﬁ'é§}§::%i§ "i:§1at aye carried out by l§eﬁ§'ifV:,V;;f_'.:many mncipass and many dIffere£:t" he therefore, £mpcm§ble far the :51"{axing';3;§iti1aif§§§?i':t§f5'Véscertain as be: whether the agent . 1'1A§zas_"sgId gwds ta ancther and has properly

5 acceii'ﬁ!,»%3d"'A.«for the same and whether the sarne are V. "9"c"a:»'t a[b; I_e_S ar exempted am we period when mas gwm :..": a:*e 7seld and therefore, it is the aractical diffmulty In 3 éuch transacticzns, which was nat enwta the 6 petltteners to await exemption an the grcuz1d1.tt3}é§'§:.Vg€:;:§41:s;' T' 1 V are said through their agent Karnataka and that the pemener s&m:§u:::

exemption In respect of the s:V:i:i:::!1<.§ _:t ::*aI'*'f::?::fe:*, which are net otherwise:. _é*.ri¢%1:;#§i!i'~--V!5%:'a{:y rﬁ:-':Af;er:aE made avafiable to me V' while by V' iléérned Senior Advecate " there is no pmvisien uixaertﬁéagéjerypégagaas, wmcr: tam within its $6696 the 'f;'r;ﬁ:1.r}sa:c'Tfi§az;§.i9i% £'a';s:':§i;§i.éstion. The transactlcms r3;&~t'1be::;g{.§;1?"tije V n'at.1:rg.Vc:f sake, for the tween that these :I.$"n¢;;'v,s:,§a:'iV2:£§f§3e--rat!on mvalved, we petimners are ::"'v}.__g;1abié fﬁ«;3r§:7é.d:{3t;1é.v}:'v§":1ateriat ta dewmnswate that there _ . §h_as=;'.!g:e«en1i:*:f§:tVstock transfar cf gowns, which are sold State of Kamataka by its ccznsignment an 3:3 behalf and which can be pmaucee in 'fLV4:.iev§¥ﬁence, in suwcrt of their case and tha stock cf 'goods sum eumsae the State saute: not be made 5% '£4 avanabte in team of me 3(2) of the KVATV_£§;i;~--!: ex*51.A.§:;i_e7 T weuld further mbmit that if the rlgcfar §§;f'AEh'e»;i{;;é?:i$3:~srjf.'§'V::

are read dawn ta enable me peﬂ§ioné'e*.__£e matertat, which wouzd satigy thé"éQthgrIfies'._VVas': reﬁards the compliance cf _;0f'. tzs_;.:. ' t:2_' f&:9;ect cf such goods invaived Ir: the stcjac:5:v:.tt:f;ar*:scf§.:-.,:f V§h :&".agent and the Departme{}t,§---.:Vyvé:*Q§{: verify the particulars effected by the agent, nsdt 5:11;? 6! the goods cf the petltwners, of goods cf other parﬂes §€e*!tE§1wf?§L§'$:!i;§§*z-g_a§ér§ mgvht have deait. It is seught by tHe.A}' +7§ét!tiainér5j". ::ﬁ3§t, wink sewng aside the re--- 1? the consignment agent of me .. " pue4_i:'§!:1<:nars~~ arapemmed to ma a deciaratien. wt-me ail the parmulars ef me several Uansacﬂons " um by their agent In respect of ma salma, 'AVw?zich are stock trarzsferred mztside the State of V "Kamataka, which wwla enawe the responaents ta 3 15 appreciate, that the petiaaners are enmed ta deducticns he which they are legitlmamlv this View of me ntatter, the Fﬁtitians are a:IaW3€3é. ." i" : {T - The tmmgned Armexures In th e,»..ts»vc: mﬁf:'§%.'_§. V 'F1 to F4' and 'G1 to <34' mac:-gyeuyg aha quashed. The petitioners are gfaﬁaed to file through their c0ns!gnmeﬁtV:.."a_gén:._ 3 ééelaréuen ans furnish aﬁ part:icuiars'4'7a5;.*-:T_'ra'g.=«.§'i*c3s whlch are the agent and which are in tum sold £3uj:s$.dé' 6? Karnataka and the responda-§afs5__iA_'s?§all'.62':ygrifieatim of such transacﬁons, gra.ni:.:s'L':ch as the petitioners may be entfded in rmpecttve assessment perioeis.

with ahmwatiens, ma peﬁaens mad 3% V petmmer shat; take steps to ensure that the . 'agént.s shalt furnish dectaraticns and such tamer 6 reiestant partlcuiérs, ta Um respondents withlfj -- 1' of ttnree weelw.

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