2005 (9) TMI 613 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to show cause notice under Karnataka Sales Tax Act, 1957 for incorrect returns and non-quantification of tax liability under section 6D. Constitutional validity of section 6D and legality of levy for infrastructure development. Admissibility of writ petition, arguments on exceeding levy limit, reliance on previous judgment, factual basis for relief sought, and dismissal of petition.

Analysis:
The petitioner, a registered dealer under the Karnataka Sales Tax Act, challenged a show cause notice dated May 22, 2000, for incorrect returns and non-quantification of tax liability under section 6D. The petitioner contended that the levy under section 6D was for raising funds for infrastructure development and was limited to investing in specific government companies. The petitioner argued that the levy had exceeded the authorized limit of Rs. 70 crores, making further collection unauthorized. The petitioner relied on a previous judgment to support their case, but the court noted that the judgment pertained to a different period. To succeed, the petitioner needed to prove that the collected amount had surpassed Rs. 70 crores, which was not established in the petition.

The court emphasized the importance of factual substantiation in challenging the constitutional validity of a provision. It stated that a declaration of unconstitutionality could not be granted based solely on pleas or submissions without concrete evidence. The court highlighted the necessity for proving the factual basis, specifically the collection exceeding Rs. 70 crores during the relevant period. As the petitioner failed to provide sufficient factual backing for their argument, the court concluded that the relief sought could not be granted.

Ultimately, the court dismissed the writ petition, stating that a declaration of unconstitutionality and quashing of the show cause notice could not be issued due to the lack of factual substantiation by the petitioner. The judgment underscored the significance of establishing factual grounds when challenging the constitutional validity of a statutory provision and seeking legal remedies through writ petitions.