2013 (1) TMI 750 - HC - VAT and Sales Tax

Restriction brought about by the amendment cannot regulate or affect an exemption if has been granted or is to be given in respect of inter-State sales turnover effected in favour of non-registered dealers and other Governments.

Summary

Issues:
1. Dismissal of writ petitions by the learned single judge.
2. Validity of reassessment orders denying set-off from the sanctioned incentive amount.
3. Legality of demanding payment of CST levied without allowing set-off.
4. Requirement of form C for sales with unregistered dealers.
5. Interpretation of section 8(5) of the CST Act.
6. Need for reconsideration of reassessment orders.

Issue 1: Dismissal of Writ Petitions:
The appellant, a registered dealer under the KST and CST Act, challenged the dismissal of writ petitions by the learned single judge. Respondent No. 4 had passed assessment orders granting tax exemption for certain years but later issued reassessment orders denying the benefit of incentive, leading to demand notices. The Division Bench held that the appellant needed to fulfill conditions, including filing form C, to avail benefits under section 8(5) of the CST Act.

Issue 2: Validity of Reassessment Orders:
The appellant argued that the reassessment orders denying set-off from the sanctioned incentive amount were unlawful. They contended that the demand for CST payment without allowing set-off was illegal. The appellant emphasized that the issue of incentive was not addressed in a previous judgment and that the amendments to section 8(5) of the CST Act should not prevent the continuation of incentives.

Issue 3: Requirement of Form C:
The appellant asserted that form C was not necessary for sales with unregistered dealers. The appellant relied on a court decision to support this argument.

Issue 4: Interpretation of Section 8(5) of the CST Act:
The court highlighted that the restriction imposed by the amendment could not affect exemptions granted for inter-State sales turnover with non-registered dealers and other entities. This crucial aspect was not considered by the learned single judge or respondent No. 4, necessitating a reconsideration of the reassessment orders.

Issue 5: Reconsideration of Reassessment Orders:
The court allowed the writ appeals, setting aside the impugned orders and remitting the matter to respondent No. 4 for reconsideration in accordance with the law and the judgment of the court in a related case.

In conclusion, the High Court of Karnataka addressed various issues related to the dismissal of writ petitions, validity of reassessment orders, requirement of form C, interpretation of section 8(5) of the CST Act, and the need for reconsideration of reassessment orders. The judgment emphasized the importance of fulfilling statutory conditions for availing benefits and ensuring that exemptions were not wrongly denied.