2012 (10) TMI 973 - HC - VAT and Sales Tax

Summary

Issues involved:
The issues involved in the judgment are the liability of the assessee to pay purchase tax on jelly and sand, the deduction to be given to the subcontractor, and the levy of resale tax on both the contractor and subcontractor.

Liability of purchase tax on jelly and sand:
The Department contended that the assessee purchased jelly and sand from unregistered dealers, subjecting the items to purchase tax u/s 6(1) of the Karnataka Sales Tax Act, 1957. The assessee argued that they did not purchase jelly from outside but extracted it from their quarry, paying royalty to the Government. The Tribunal found that no purchase tax is leviable on jelly but upheld the levy of tax on the sand component purchased from unregistered dealers.

Deduction to be given to the subcontractor:
The assessing officer did not give deduction to the subcontractor while assessing their turnover, leading to a dispute. The Tribunal found that the sub-contractor had been given due deduction of the resale tax, and there was no double levy of tax on both the contractor and sub-contractor.

Levy of resale tax on contractor and subcontractor:
The Department tried to levy resale tax on both the contractor and sub-contractor. However, the Tribunal held that there was no double levy of tax, citing a previous court decision. The Tribunal concluded that the levy of tax on sand was valid, and the questions of law were partly answered in favor of the Revenue.