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Showing contexts for: KVAT in M L Manjunath vs The State Of Karnataka on 28 April, 2017Matching Fragments
The petitioner has challenged the assessment order dated 06.01.2017, and endorsement dated 25.1.2017, both passed by respondent No.2, the Assistant Commissioner of Commercial Taxes, ('the ACCT', for short).
2. Briefly stated the facts of the case are that the petitioner is a registered dealer under the Karnataka Value Added Tax Act, 2003 ('KVAT Act' for short), bearing registration No. TIN 29670478096. The petitioner claims that he is holding a licence in Form CL-9 issued under the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968. The petitioner further claims to be a proprietary concern running a bar and restaurant under the name and style of M/s. Manjushree Bar and Restaurant. The petitioner is a dealer engaged in the sale of food, and re-sale of liquor including beer, fenny, liqueur and wine and soft drinks. According to the petitioner, w.e.f. 11.03.2005, the sale of liquor was exempted from tax under Section 5 of KVAT Act. Subsequently, the tax on liquor was made liable at the rate of 5.5% with effect from 01.03.2014, in accordance with the entry 59A inserted to the Third Schedule of the KVAT Act.
3. According to the petitioner, the Karnataka State Beverages Corporation Limited ('KSBCL' for short) is statutory body, and is owned by the State Government. The KSBCL, Bengaluru is the sole distributor of liquor in the State of Karnataka; it is holding CL-11 licence issued under the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968. Further, according to the petitioner, all the liquor dealers in the State purchase their liquor from KSBCL. Consequently, all the liquor dealers as well as KSBCL were made liable to pay the tax on sales of liquor at 5.5% percent under Section 4 of the KVAT Act.
4. By notification dated 28.02.2014, the Government had exempted the tax payable under the KVAT Act, on the sales of liquor by certain dealers. Subsequently, notification dated 21.02.2014 was amended by notification dated 21.04.2014.
5. Petitioner further claims that it is carrying on the business of sale of liquor in Bengaluru urban area, and is liable to pay the tax of 5.5% on the sale of liquor. The petitioner further claims that according to the notification dated 28.02.2014, the liquor dealers- licence holders, other than CL-9 in urban area, CL-4, CL-6A, CL-7 were exempted from the tax payable under the KVAT Act on the sale of liquor. Consequently, the dealers in liquor, in urban area, holding CL-9 licence were made liable to pay tax. Challenging the constitutional validity of the levy of tax itself on liquor under the VAT Act, and the notification dated 28.02.2014, as violative of Article 14 of the Constitution on the ground of discrimination amongst the rural and urban, the liquor dealers had filed W.P. Nos.13078- 13082/2014 (T-Res) before this Court.
6. Since the issue with regard to the validity of the notification dated 28.02.2014 was sub-judice, the petitioner did not pay the tax under the KVAT Act, as the petitioner claimed exemption on the sale turnover of liquor made during the year 2014-15 and onwards. Therefore, VAT returns were filed by the petitioner and the tax payable as 'Nil'.
7. Further, by judgment dated 30.09.2015, this Court upheld the constitutional validity of the notification dated 28.02.2014 in the case of Sri.M.Madhava Gowda V.Under Secretary to Government of Karnataka and others [2016 (84) Kar.L.J.193 (HC)]. Subsequently, the judgment of the learned single Judge was confirmed by the learned Division Bench of this Court in the case of Heaven Inn (Bar Attached) vs. State of Karnataka and another [2016 (86) Kar.L.J.1(HC)(DB)].