2015 (4) TMI 1130 - HC - VAT and Sales Tax

Constitutional validity of Rule - Proviso to rule 3(2)(c) of the KVAT Rules - whether is a provision which is discriminatory and also ultra vires of section 30(1) of the KVAT Act? - Deduction of quantity discount (quarterly scheme discount) - Assessing Officer has held that quantity discount (quarterly scheme discount) is not a allowable discount as the sale is not relatable to sale transactions in respect of which the invoices were raised and thereby added the amount of quarterly discount to taxable turnover - Held that - issue regarding constitutional validity has reached finality 2008 (7) TMI 862 - KARNATAKA HIGH COURT and issue on hand relating to claim deduction of discount component from taxable turnover having been laid to rest by Division Bench of this court in 2014 (4) TMI 590 - KARNATAKA HIGH COURT which is now pending before Apex Court in SLP(Civil) - Since impugned order is an appealable order this court refrains to exercise the writ jurisdiction. Hence, Writ Petitions stands dismissed.

Summary

Issues:
Petitioner claiming deduction for discounts under Karnataka Value Added Tax Act, disallowance of quantity discount by Assessing Officer, challenge to constitutional validity of Rule 3(2)(c) of Karnataka Value Added Tax Rules, 2005, appellate authority's decision reversal by Additional Commissioner, Division Bench's judgment, petitioner's plea for deduction of discount from taxable turnover, availability of alternate remedy, exercise of writ jurisdiction, finality of previous judgments.

Analysis:

1. The petitioner, a registered dealer under Karnataka Value Added Tax Act and Central Sales Tax Act, claimed deductions for discounts like cash discount, scheme discount, and quantity discount given to customers. The Assessing Officer disallowed the quantity discount, adding it to the taxable turnover. The first appellate authority initially allowed the claim, but the Additional Commissioner revised the decision, leading to appeals and subsequent judgments affirming the disallowance of the discount.

2. The main issue in the present writ petitions is the petitioner's claim for deduction of discount amounts under Rule 3(2)(c) of the Karnataka Value Added Tax Act. The Assessing Officer's disallowance is under consideration before the Apex Court. Previous judgments have upheld the constitutional validity of Rule 3(2)(c) and rejected similar challenges. The Division Bench also ruled against the petitioner's plea for deduction based on discount reflected in tax invoices not being directly related to the goods sold.

3. The petitioner's attempt to persuade the court to take a different view from previous judgments was unsuccessful. The court reiterated that the discount claimed should be directly related to the sales reflected in the invoices to qualify for deduction under Rule 3(2)(c). The petitioner's grounds for the writ petition mirrored those rejected in earlier cases, leading to dismissal of the present petition.

4. The court highlighted the importance of exhausting alternate remedies before seeking writ jurisdiction, citing relevant judgments emphasizing the need to follow statutory procedures for recovery of taxes and public dues. The court declined to entertain the writ petition due to the availability of an appellate remedy and the finality of previous judgments on the issues raised by the petitioner.

5. Given the appealable nature of the impugned order, the court refrained from exercising writ jurisdiction and dismissed the petitions. The petitioner was granted the liberty to challenge the order before the appellate authority within a specified period. The court emphasized the need to follow established procedures and return the certified copy of the order for further action by the petitioner.