M/S Raja Charity Trust vs The Additional Commr Of Commercial ... on 17 July, 2008

[Cites 3, Cited by 1]

Karnataka High Court

M/S Raja Charity Trust vs The Additional Commr Of Commercial ... on 17 July, 2008

Bench: K.L.Manjunath, B.V.Nagarathna

S'I'A.No. 1 . 2007

IN THE HIGH COURT OF' KARNATAKA AT BANGALQRE

DATED THIS THE 17"! DAY 0? JULY, 2008' Q ._

PRESENT

THE I-IODPBLE MR.JUSTICEmi(».L.'MAN%IU§~iPsf1;H   

AND  _ '
THE HOWBLE MRs.JU_<;§r.;cE B;\f.k¥AG.$f§§${;"H.NA3

_s.*1'.A.:~:Q_A:.[f1j;,{» ,2eo;_r_ .

BWTWEEH:

M/S RAJA ,C1HARi'i*YiTRt£s*1i '_ «
No.24«s'A,BAR1=c0M1?LEx"~  'V 
3RD..FLO€§R._» ., A    
RE:431Df5.*NC:V'-.RoA1j),LBANGALQRE 25
REPLBY SZCS ACCO{iNTS OEFICEI?

 si%:A*siI§;~z%ozw%as B' *

. . .AP?E LLANT

(By Sri; e.%%KA.vViv:1iLfr%Hit~'A'as P E UMESH, ADVS.)

.---..-....--.--.......

A #4' 

 iiéiﬁ; E.f3 i)ITIONAL COMMR 0? COMMERCIAL TAXES
V  1

{A .V'I'i{ BUILEHNG
GANDHINAGAR

BANGALORE 9

THE JOINT COMMISSIONER

op' COMMERCIAL TAXES (APPEALS)
MYSORE DIVISION

MYSORE

THE ADDL DEPUTY COMMISSIONER
0:2 COMMERCIAL TAXES
ASSTS 14



STA.NO.1.2007

BCD 1
BANGALORE

    _

(By Smt: s SUJATHA, AGA)

THIS STA FILED U/S 24(1) O12'  Ac*r'o'AoAiné%s*:f'7ir:E M

ORDER I)'I'.8.11.2006 PASSED IN 'NO.zAC...1.;BCD:;I:sMR--,
17/O4-05 ON THE FILE oF.fmE AOoL.c.oMM:ss:ONER GP'
COMMERCIAL TAXES, "ZQi'$E»1, " ~_VrK BUILDING,
GANDHINAGAR, BANGLAQRE~,.__ "S.VE'I'I'IN'G._ ASIDE THE
APPEAL ORDER PASSED BY JQINT~..COMMISSIONER FOR
COMMERCIAL TAXES  RE-£{SSESSMENT ORDER
DATED 11.12.00 PASSED  BY.  THE DEPUTY
COMMISSIONER OE-"C0:MM'ERCIAL ff':\.XES, BANGALORE
FOR THE AS"3EE3SMENf1'  szﬁ;-97:' IS RESFORED AND
O1RECr:N_G_ 1:515: .,ASSESSIN(3a AUTHORITY TO ESSUE
REVISED N'()jITICE_ A.c'c:O.K'DINGLY.

 'I'hi_s"STA_  on j for ADMISSION on this day,
l'v1ANe-}U}'+JA'I'H J,f(1¢=.1ivg:it:g1 'ihe fo}1owing:~

osgsneunxr

V  5.-."ThGugh t1'aVe"mihA:ittcr is listed for admission, by consent,

   isutakeo 1:; up for ma! heanh g.

2\ ~  appeal is by the assessor: challenging the orders

V' ,  by the Additional Commissioner of Commercial Tax,

 Zone-I, Bangalone dated 8.11.2006. The Additional

Commissioner of Commczcial Tax excmising its powers
oonfened under Section 22-A(1) of Karnataka Sales Tax Act

issued a show cause notice on 7.2.2005 stating that the

<9»



STA.NO. 1.2007

order passed by the Joint Commissioner of Commercial Tax
(Appeals) in the appeal ﬁled by the assessee against the
order of xwassessxnent passed by the I).C.C.'I' (Asse-Qement)»

14, Bangalore has to be revised as the 

improper and prejudicial to the  

According to him the Assessing  T

the assessment had levied the taxiat :i.'3z"x€> ort

supplied by the aseessee to   
the same has been  t0'4%: "the Jo'i&x'1t'C-oitunissioner
by relying upon gems  am-4 19.2.1999 and

such interpretation  ':9 the earlier notiﬁcation

dated-ft  the.ett1er passed by the J.C.C.'I'
(Appceis) is  the interest of the revenue, the

aseessee   to submit his detailed reply.
33: §(;.w91diﬁg1y,.....the assesses submitted xepky stating that

A its Tcggvagzggnent by its notiﬁcation dated 30.3.1996 had

 t-téiezieessional rates of tax on the sales made to

vaufi«:;'1i1VsAV dovernment Departments and aiso to Zilla

  AA Payctieyath. According to the assesses Ziila Panchayath

'AA'-Ztiititiitudess Grama Panchayath and Taluk Panchayath. The

"tnon.-mentioning of Taluk Panchayath and Zilla Panchayat is

an error committed by the State and that under the

<°v



STA.Nc>. 1.2007

subsequent notiﬁcation dated 19.2.1999 has set right the

error committed by it, granted axeatnption  

Panchyatha as well as Grama Panchayath.  

contended by the assesses that the; S6100.  nd_-- " . 

19.2.99

is in the nature of c1ariﬁc&iti0£i_"&r-;d 91¢.

would relates back to the cari_ié:z1V.13.o'u;ﬁ-cﬁiiioxx * and it was further coxgtendedwhsﬁt tjggc by the a.c:.c:.'r (Appeals) is "w;"{h:'~lgw axﬁime second notiﬁcation. 11as»_beenVAp;w:§.}ga§2r1§._V the Appellate Authority 'of Suprcatnc court in the case; 9 Income Tax Officer, £99931 sc: 1922 and that the (Commissioner of Income Tax, Bang.a1ore4"4Vs_;@J. Therefore, the assesses requested A.r:..c.fr toW'd"rc5p' this prcxceeding. The A.C.C.'1' after reply and on considering the arguments of a3s¢$s}¢:e;V; came to the conclusion that in ViCW of Section 8A 'the Karnataka Sales Tax Act, the concession shown to " , Panchayath under the notiﬁcation dated 30.3.1996 cannot be extended to Grama Panchayath or the Taluk Panchayath and the Government in its wisdom in View of Section SA has gramced concession to particular class of persons. Thcrefom, held that the facts of §{.P.Vargheesc case fr S'?.'A.N0. 1.2007 to accomplish and sympathetic and intaginative discovery is the surest guide to their H Para 4?: We have noted the «object ' L-of "

Section 16(3) of the Act which has to __be reci'dj--in_T ~ oonjundion with Section 24(2) in this case for the.-T' _ present purpose. If the cj"d"p§c2!tiC?3Iar "

provision is easily amenable A ~: «whole . scheme of the Act which irfr t$'tisos..case :;_' counteract, the effect of thetriansfer of assets so ' for as computation of 1_'_noom.s "of the s.as.-sessee _}is concerned then bearing purpose Tit: we should find out the form language used by the .LegisIa~tur'e'-- if literal construction leads to i.e., result not intended to"be-subserved the object of the legislation found" oufinf indioczted before, then possible apart jhorng "con-_33t:'u_ction then that con.s1ruc-'tiQ}_1 ~st:~ou!d be [preferred to the strict Iiteraa}'."'coftst3t4ction, equity and taxation arew,oj?e;j;V st.'gz11ge7s,_;ztteté7pts should be made i'i¥¢atV":thes'é: r=eriu'1'in aiways so and If a oonsimVct:_'on.A results. in equity rather than in construction should be ' preferred to t--h:e"t:ite1£zI construction. Further more, t't'£«, the irt,St£:';_rit".T(.2§:z,$e we are deaiing with an .. art:}'%'ciaI~ Stability created for counteracting the '~e}_'jFec:t only of by the csswsee to reduce ' : Iiabilitjjiby transfer. It has also been noted , for various purposes the business from proﬁt is included or loss is set offrs treated " «i1t.__va;'io14s situations as assessee's income. The _s'co,cm ofthe Act as worked out has been noted before.' V' Zilla Panchayatb. as well as Taluk Panchayath am i cmated under the Provisions of Karnataka Panchyath Raj Act, 1993 and the Grams Pan-tzhayath, Taluk Panchyath and Zilla Panchayath are the creation of the Government and al}.

the three institutions ought to be coxzsidcrcd as local bodies «EV %ST}~\.No. 1.2007 _. 7 _.

created by the Government and therefore, when concessional tax is gven to Zilla Panchayath, it would automatically extended to Gxama Panehayath and Taluk and that a liberal interpretation has to be interpreting the ﬁxst notiﬁcation of the sun' ﬂax' ly relying upon the Judgmt;-'ﬁfef'ﬂ1_e".. in b K.P.Vargl1ecse case.

"It is; 'd we?! settied mlebf construction that u:hg*3?e ."p1¢2£:i' litericc-If'-- infefpretation of a staturory a manifestly absurd orrufd never have been yfngended time 'Iegisiature, court may modify me by Iegisfature or even do some to._1'i,v...._so as to achieve the obvious Enteniiun of legislqmre and produce a rational cxmsfructiorrg Luke Vs. Inland Revenue Commission,er,~, I AC' 557. The court may also ; ' " in such at ease "read into the statutory provision a I _gon;iftiori"w.1mic:h, though not expressed is irnpfiait constituting the basic assumption underlying V' " j provision".

.' Government Advocate relying upon 8A(1)(b) contends that when an exemption or " A_fed_11ct:ion in rate of any tax has been notiﬁed by the Government for the beneﬁt of speciﬁed class of persons, the same cannot be extended to other class of persons. Relying upon Section 8A(2) she further contends that any exemption from tax or reduction notiﬁed under sub--section 1 would be 6/ STA.NC~. 1 .2037 subject to such restrictions and conditions as spcciﬁod in such notiﬁcation. It would be relevant to Provisions of Section 8A as under:

'Power of State to " ' exemptions and of (1) State "

Government may, by --_ﬁ;ot1;ﬁ<x1tfon, . exemption, or reduction ifi2rc"zte, in re-spew: of may '€1xPayabl€underthisAc!--_"vv._ '

(a)on the or of any speciﬁed goods or class of at§a,'.'1 -in the series of sales by suooessiveVde,a1er*s;_.o_r" V

(b) _by_ any"'spe¢tﬁedA"»oIoss 'Voffpersons, in regard so 'whole go:-rfany Vofjtheir turnover;

or 3 ~. ' 2 '~v 3: (cg-"outta? of any speciﬁed "of byoriy sp__ec:ﬁ¢§~d does of dealers in mhcogor paifof their turnover.

" ¢ ._ (2). Arzyexeﬁsption from tax or reduction in the. rate of.tabr,V'.*r,of'a:'ﬁéd under sub-section (1) may _ be subjeot at s~s,¢dz.--~restri<:tions and conditions as " may in the notiﬁ'oation.

I (2~A}« State Govermnent may, by "rxo!:;fiog1tior:, transpose any entry or part thereof 1 " schedule to another schedule and alter ~ levy of safe or purchase, but not so as to the rate of tax in any case:

.. AV Provided that where the point of levy is uoftered under this subsection in resped of any goods and ifsuch goods have been subjected to tax under the unaltered entry, then such goods shall not be subjeaed ot tax under the trcmsferred entry.

(3) The State Government may, by notiﬁoatiorr, canoe! or vary any notiﬁcation issued under subsection (1) (or sub-section (2-A).

((3-A) xxxaocxx) (xwocxxxxnoc) P STA.N0.1.2(}O7 _. 9 ..

(4) If any restriction or condition speciﬁed under sub-section (2) is contravened or is not observed by a dealer, the sales or purchasesof such dealer may, with effect from H commencement of the year in which A4 contravention or non-observance took place,' 5 _.__ assessed to tax or taxes under the V' provisions of this Act as if the provisions ofythe ' notiﬁcation under sub-soaionﬁ)' did not suchsales orpurchases. 1 '7 it {5}(a) Where any restriction orb.."g.~on't1itioi1 speciﬁed under sub-sectioyt (2) in respect of taxable at the point of "safe is mam-ems; or is not observed by the pyfolzaser of such not a.

dealer or that the sa1e~.vc.i_I'ue goods is less than the turnover speaﬁed 'e.-ulrs_sction (5) of Section 5; "liable to pay an amount-.eqi;a1 €li)_§f'ere2'u':e between the tax _;ig,yc;§tile the rqtesv 'epeeiﬁed under the on giiﬁdtased in respect of whiel1'su¢l1 contrcmention 0;' non-observance has taken provision of the notiﬁcation 'under ) did not apply to such pi1zfcha.ses_and" in."_.adclit1'orz, such purchaser shall . _ alsoloe liable to pay by way of penalty 5: sum not iemceedirigytlae omount equivalent to the amount of V leviabIe"'o'ri the sale of such ' T. The dijjfererwe ofthe tax amount and the " levied under this subsection shall be recovered in the manner speciﬁed under Section (6) Any notiﬁcation issued under sub- section (1) or sub-section (2-A) shall be valid until it is cancelled under subsection (3), notwithstanding that the tax payable in accordance with sud: notification in respect of any speciﬁed goods or class of goods or by any speciﬁed dass of persons or on the sale or purchase of any specified class of goods by any specified class of dealers, is modiﬁed by an amendment to this Act"

(V STA.N0.1.2GO"?' .. ..

In the result the appeal is dismissed.

Legal Document View

Unlock Advanced Research with PRISMAI

Karnataka High Court

M/S Raja Charity Trust vs The Additional Commr Of Commercial ... on 17 July, 2008

Bench: K.L.Manjunath, B.V.Nagarathna