1984 (1) TMI 289 - HC - VAT and Sales Tax

Summary

Issues:
Scope and ambit of section 5(3-A) of the Karnataka Sales Tax Act.

Analysis:

The revision petition challenged an order by the Appellate Tribunal regarding the interpretation of section 5(3-A) of the Karnataka Sales Tax Act. The petitioner-firm claimed a concessional tax rate for a specific turnover, which was rejected by the assessing authority. The petitioner argued that the goods sold were for use as component parts, eligible for the concessional rate under section 5(3-A). The assessing authority, Deputy Commissioner, and Tribunal all rejected this claim based on past decisions regarding the nature of the goods sold by the petitioner. The primary issue was whether the authorities were justified in rejecting the petitioner's claim based on form 37 declarations. The relevant legal provisions required the furnishing of declarations in form 37 to claim the concessional rate of tax under section 5(3-A).

The Court analyzed the provisions of section 5(3-A) and the accompanying rules and explanations. It noted that the declaration in form 37 was a crucial requirement for claiming the concessional rate of tax. The Court referred to previous decisions that emphasized the need for the goods sold to be identifiable constituents of the finished product mentioned in the Second Schedule. The Court highlighted that once the buyer furnishes the required declaration in the prescribed form, the assessing authority is bound by it, and no further proof should be demanded from the assessee. The Court cited decisions from the Madras High Court to support this interpretation.

The Court also discussed an amendment to section 5(3-A) and the liberal provisions introduced for claiming the concessional rate of tax. It referred to a Supreme Court decision that clarified the scope of "component part" for taxation purposes. The Court concluded that the petitioner had fulfilled the requirements by furnishing the declaration in form 37 and, therefore, should be entitled to the concessional rate of tax. The revision petition was allowed, the previous orders were set aside, and the assessing officer was directed to re-do the assessment based on the declaration provided by the assessee. The petitioner was instructed to appear before the assessing authority for further proceedings. No costs were awarded in this case.