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2012 (4) TMI 551 - HC - VAT and Sales TaxTax on the sale of bottles - tax at 12.5 per cent along with interest on the balance output tax due and payable from the date of its non-payment till the date of quantification of the taxes payable by the assessee-company - Held that - This is not a fit case for exercising writ jurisdiction permitting the petitioner to bypass the statutory remedy of appeal. The facts involved in the present case have to be reappreciated and the process of reasoning adopted by the assessing officer has to be subjected to further scrutiny by the appellate authority before applying the provisions of law contained under section 4(2) of the Act and the decision rendered in the case of Premier Breweries v. State of Kerala 1997 (12) TMI 569 - SUPREME COURT OF INDIA . Therefore, without venturing into any such exercise to opine one way or the other with regard to the applicability of the ratio laid down in the case of Premier Breweries v. State of Kerala Supra to the facts of the present case, this writ petition deserves to be dismissed keeping the contentions of the petitioner open to be urged before the appellate authority. W.P. dismissed.
Issues:
Challenge to order under Karnataka Value Added Tax Act regarding tax on sale of bottles. Analysis: 1. The petitioner, a beer manufacturing company, challenged an order passed by the Deputy Commissioner of Commercial Tax regarding the levy of tax on the sale of bottles under the Karnataka Value Added Tax Act, 2003. The assessing officer held the company liable to pay tax at 12.5% on the sale of bottles, along with interest on the outstanding tax amount. The petitioner contended that the order was contrary to a judgment of the apex court and violated section 4(2) of the Act. 2. The petitioner had entered into an agreement with the Karnataka State Beverages Corporation Limited for the sale of beer supplied in bottles. The agreement stipulated conditions for the return of bottles within 30 days, failing which the deposit would be forfeited. The petitioner claimed exemption on the entire turnover as it involved the sale of alcoholic liquor, exempted under entry 34 of the Act. The assessing officer, however, treated the amounts collected as bottle deposits separately, leading to the levy of tax. 3. The assessing officer concluded that there were two distinct contracts: one for the sale of beer and another for the sale of bottles. The petitioner argued that this finding was contrary to section 4(2) of the Act, which states that the tax rate on containers or packing materials should be the same as that on the goods contained within them. The Additional Government Advocate supported the assessing officer's view, emphasizing the separate treatment of beer and bottles in the agreement. 4. The court declined to interfere, stating that the appellate authority should analyze the transaction's nature and the agreement's conditions. Referring to a precedent involving the taxation of containers with goods, the court emphasized that the appellate remedy provided under the Act should be pursued before seeking writ jurisdiction. The court dismissed the writ petitions, granting the petitioner 30 days to file an appeal while restraining coercive measures by the tax authority. 5. The court highlighted that the facts and agreements between the parties needed thorough examination by the appellate authority before any final determination could be made. The petitioner's contention that alternative remedies should not bar writ jurisdiction was rejected, emphasizing the need for a detailed review by the appellate body before any conclusive decision.
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