Karnataka High Court
M/S Kisankraft Machine Tools Pvt ... vs The State Of Karnataka on 16 January, 2018
Author: Vineet Kothari
Bench: Vineet Kothari
1/10
IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 16TH DAY OF JANUARY 2018
BEFORE
THE HON'BLE Dr.JUSTICE VINEET KOTHARI
W.P.Nos.24507-24508 OF 2016 (T-RES)
& W.P.Nos.31496 - 31517 OF 2016
Between:
M/s.Kisankraft Machine Tools Pvt. Limited
No.4, 1st Main, 7-A Cross,
Maruthi Layout, Dasarahalli,
HAF Post, Hebbal, Bangalore 560 024
(Represented by its Director
Sri Ankit Prakash Chitalia) ...Petitioner
(By:Mr.R.Dakshina Murthy, Advocate
for Mr.Naveen Kumar K.S., Advocate)
And:
1. The State of Karnataka
(Represented by its Finance Secretary)
Vidhana Soudha, Bangalore 560 001.
2. The Commissioner of Commercial Taxes
Vanijya Therije Karyalaya-1
Gandhinagar, Bangalore 560 009.
3. The Deputy Commissioner of
Commercial Taxes (Audit-5,6), DVO-5
Room No.508, 'B' Wing, VTK-2
Koramangala, Bangalore 560 047. ...Respondents
(By:Mr.T.K.Vedamurthy, A.G.A.)
Date of Order 16-01-2018 W.P.Nos.24507-508/2016
& W.P.Nos.31496 - 31517/2016
M/s.Kisankraft Machine Tools Pvt. Limited
Vs. The State of Karnataka & Others.
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These Writ Petitions are filed under Articles 226 & 227
of the Constitution of India praying to quash the Notification
dated 31.3.2010 issued by the R1 vide Annexure-A and
clarification order dated 30.9.2010 issued by R2 vide
Annexure-B and reassessment order dated 14.12.2015 dated
30.1.2016 and dated 30.1.2016 vide Annexures-G, L & M
respectively, as being illegal and untenable in law and etc.
These W.Ps. coming on for Preliminary Hearing 'B'
Group this day, the Court made the following:-
ORDER
Mr.R.Dakshina Murthy, Advocate for Mr.Naveen Kumar K.S., Advocate for Petitioner. Mr.T.K.Vedamurthy, A.G.A. for Respondents.
The petitioner - M/s.Kisankraft Machine Tools Pvt. Limited has assailed the impugned Re-assessment Order, Annexure-L dated 30.1.2016 under Section 39(1)(a) for the tax period imposing 5% VAT under the provisions of the KVAT Act, 2003 (Act) on the sale of "Manually Operated Sprayers", which are used for spraying the fertilizers and chemicals on the crops and which Sprayers are sold by the petitioner - assessee.
2. The Assessing Authority appears to have relied upon the Notification No.FD 82 CSL 10(III) dated Date of Order 16-01-2018 W.P.Nos.24507-508/2016 & W.P.Nos.31496 - 31517/2016 M/s.Kisankraft Machine Tools Pvt. Limited Vs. The State of Karnataka & Others.
3/10 31.3.2010, whereby, the State Government has reduced the rate of tax w.e.f. 1.4.2010 to five per cent on "Agricultural Dusters, Sprayers, Sprinkler and Drip Irrigation Equipment and their parts and accessories", whereas, the learned counsel for the petitioner, Mr.R.Dakshina Murthy has argued before this Court that First Schedule to KVAT Act, 2003 exempts from tax "Agricultural implements manually operated or animal driven".
3. He has further drawn the attention of the Court towards Clarification Order No.CLR.CR.33/ 10-11 vide Annexure-B, dated 30.9.2010 issued by the Commissioner of Commercial Taxes (Karnataka), Bangalore, under which order the rate of tax for 16 commodities was clarified and notified for the general guidance of Assessing Authorities under Section 59(4) of the Act and vide Serial No.2 of the said Clarification Order, the Commissioner of Commercial Taxes has Date of Order 16-01-2018 W.P.Nos.24507-508/2016 & W.P.Nos.31496 - 31517/2016 M/s.Kisankraft Machine Tools Pvt. Limited Vs. The State of Karnataka & Others.
4/10 clarified the rate of tax on "Agricultural Sprayers"
whether manually operated or Battery operated Sprayers at 5%, but, vide Serial No.3, the "Manually Operated Agricultural Implements" were clarified to be exempted as Serial No.1 of First Schedule of KVAT Act, 2003.
4. The learned counsel for the petitioner - assessee has submitted that, as far as "Battery Operated Sprayers" are concerned, the same have been taxed at 5%, which tax has been paid by the petitioner- assessee, but since for the commodity in question, viz., "manually operated sprayers" are concerned, there is no clarification available from the side of the learned Commissioner under Section 59(4) of the Act nor "manually operated sprayers" are separately dealt with in the Notification dated 31.3.2010, hence, the present Writ Petitions have been filed by the petitioner-assessee Date of Order 16-01-2018 W.P.Nos.24507-508/2016 & W.P.Nos.31496 - 31517/2016 M/s.Kisankraft Machine Tools Pvt. Limited Vs. The State of Karnataka & Others.
5/10 assailing the Re-assessment Orders passed by the respondent - Assessing Authority.
5. Mr.T.K.Vedamurthy, the learned Additional Government Advocate appearing for the Revenue, however, supported the impugned orders on the ground that the term 'Agricultural Sprayers' without any distinction of they being manually operated or power operated would attract 5% rate of tax in terms of the Notification dated 31.3.2010.
6. Having heard the learned counsels for the parties, this Court is satisfied that the said question need not be straightaway decided by this Court, as there is no sufficient material on record to embark upon such enquiry as to the nature of commodity dealt with in the present case or decide the question of interpretation about the said commodity falling under the Entry described in the Notification dated 31.3.2010 as "Agricultural Sprayers" or "Manually Operated Date of Order 16-01-2018 W.P.Nos.24507-508/2016 & W.P.Nos.31496 - 31517/2016 M/s.Kisankraft Machine Tools Pvt. Limited Vs. The State of Karnataka & Others.
6/10 Agricultural Implements" covered by First Schedule of the Act. Such question deserves to be first decided by the Head of the Department, viz., the learned Commissioner under Section 59(4) of the Act. The provisions of Section 59 of the Act are quoted below for ready reference:-
"59. Instructions to Subordinate Authorities (1) The Government and the Commissioner may from time to time, issue such orders, instructions and directions to all officers [including Commercial Tax Inspectors] and persons employed in the execution of this Act as they may deem fit for the administration of this Act, and all such officers and persons shall observe and follow such orders, instructions and directions of the Government and the Commissioner.
(2) No such orders, instructions, or directions shall be issued under sub-section(1) so as to interfere with the discretion of any appellate authority in the exercise of its appellate functions.
Date of Order 16-01-2018 W.P.Nos.24507-508/2016 & W.P.Nos.31496 - 31517/2016 M/s.Kisankraft Machine Tools Pvt. Limited Vs. The State of Karnataka & Others.
7/10 (3) All officers and persons employed in the execution of this Act, shall observe and follow such administrative instructions as may be issued to them for their guidance by the Additional Commissioner or Joint Commissioner within whose jurisdiction they perform their functions.
(4) Without prejudice to the generality of the foregoing power, the Commissioner may, on his own motion or on an application by a registered dealer liable to pay tax under the Act, if he considers it necessary or expedient so to do, for the purpose of maintaining uniformity in the work of assessments and collection of revenue, clarify the rate of tax payable under this Act in respect of goods liable to tax under the Act, and all officers and persons employed in the execution of this Act shall observe and follow such clarification.
(5) No such application under sub-section (4) shall be entertained unless it is accompanied by proof of payment of such fee, paid in such manner, as may be prescribed.
Date of Order 16-01-2018 W.P.Nos.24507-508/2016 & W.P.Nos.31496 - 31517/2016 M/s.Kisankraft Machine Tools Pvt. Limited Vs. The State of Karnataka & Others.
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7. The very purpose of enactment of Section 59 of the Act is for general guidance and uniform application by the Assessing Authority of the Department and there is no restriction on the Commissioner to decide such questions, even though the assessment orders have been passed or re- assessment proceedings are pending.
8. Thus, the petitioner - assessee has an option of either assailing the impugned Re-assessment Orders in the regular course in the appellate channel and remedies provided under the Act, viz., First Appeal under Section 62 of the Act before the Joint Commissioner (Appeals) or under Section 63 of the Act in second appeal before the Karnataka Appellate Tribunal or he can resort to the remedy of seeking a clarification from the learned Commissioner under Section 59(4) of the Act.
Date of Order 16-01-2018 W.P.Nos.24507-508/2016 & W.P.Nos.31496 - 31517/2016 M/s.Kisankraft Machine Tools Pvt. Limited Vs. The State of Karnataka & Others.
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9. In view of an equally efficacious and alternative adequate remedy being available to the petitioner - assessee under the provisions of the Act itself, this Court will not adjudicate the said mixed questions of fact and law under Article 226 of the Constitution of India. It would be appropriate for the petitioner - assessee to first avail the regular and alternative remedies provided in law to him. Accordingly, the Writ Petitions are disposed of with the aforesaid liberty and direction to the petitioner.
10. In case the petitioner - assessee files such application under Section 59(4) of the Act, it is considered appropriate and expedient for the learned Commissioner to decide the said question, which may affect many assessees in the State. To avoid conflicting orders and different approaches by the Assessing Authorities, the Head of Department, viz., the Commissioner, should undertake this exercise and Date of Order 16-01-2018 W.P.Nos.24507-508/2016 & W.P.Nos.31496 - 31517/2016 M/s.Kisankraft Machine Tools Pvt. Limited Vs. The State of Karnataka & Others.
10/10 issue appropriate Clarification under Section 59(4) of the Act.
No order as to costs.
Sd/-
JUDGE VGR