2012 (10) TMI 968 - HC - VAT and Sales Tax

Summary

Issues involved: Jurisdiction of revisional authority to determine exemption eligibility under notification u/s 22(1) of Karnataka Sales Tax Act.

The appellant, a cement pipe manufacturer, supplied goods to Bagalkot Town Development Authority and collected tax under the Karnataka Sales Tax Act based on a concessional rate notification. The Additional Commissioner initiated suo motu revision, contending that the Authority is not a creation of the State and the concessional rate is invalid. The main issue is whether the Authority should be considered a Department of the State for tax purposes. The Court found that the Authority, created under the Urban Development Authority Act, is a local authority of the State, managed by a Commissioner appointed by the State. The Court held that the concessional rate applicable to the Government should extend to the Authority. Consequently, the appeal was allowed, setting aside the Additional Commissioner's order and confirming the Joint Commissioner's order.