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2013 (10) TMI 1064 - SC - VAT and Sales TaxSales tax liability - Whether the cutting tool i.e. drill bits is exigible to tax under Entry No. 52 of Schedule-I of the Karnataka Tax on Entry of Goods Act, 1979 - Held that - High Court ought not to have entertained the petitions and expressed its opinion. We say so, for the reason that under the Act, a dealer is given an opportunity to move before the Commissioner of Commercial Taxes and seek for a clarification. The clarification that may be sought is with regard to the exigibility of the goods in question under the Act. Instead of resorting to this mode and the method, the petitioner had chosen to approach the High Court for a declaration - petitioner has paid the entry tax on drilling bits for the assessment years 2005-2006 to 2009-2010. Insofar as those assessment years are concerned, he is not seeking any relief. Now, he only seeks permission of this Court to raise the contention for the subsequent years of assessment that the drilling bits are not exigible to the entry tax for the reason that they are consumables before the AO - permission granted - Decided in favour of assessee.
Issues:
Challenge to judgment and order passed by the Division Bench of the High Court of Karnataka in CRP No. 147 of 2011 and Order passed by the Single Judge of the High Court in Writ Petition No. 19411 and 20091-101 of 2010 regarding the taxability of "drill bits" under Entry No. 52 of Schedule-I of the Karnataka Tax on Entry of Goods Act, 1979. Analysis: The Supreme Court dismissed the Special Leave Petitions challenging the High Court's judgment and order. The High Court entertained the petitions regarding the taxability of "drill bits" under the Act, which the petitioner sought to be declared as not exigible for tax payment. The Court noted that the High Court should not have entertained the petitions and expressed its opinion as the Act provides for dealers to seek clarification from the Commissioner of Commercial Taxes on the exigibility of goods. Instead of following this procedure, the petitioner directly approached the High Court for a declaration. The High Court, without expressing its opinion, relied on a previous decision of the Supreme Court and dismissed the petitions. The petitioner had paid entry tax on "drilling bits" for certain assessment years and was not seeking relief for those years. However, the petitioner sought permission to raise the contention for subsequent assessment years that "drilling bits" are not exigible to entry tax as they are 'consumables.' The Court granted permission for the petitioner to raise this contention before the assessing authority for subsequent years. The assessing authority was directed to consider the contention raised by the petitioner for subsequent years in accordance with the law, without being influenced by the High Court's previous orders in Writ Petition Nos. 19411 and 20091-101 of 2010. The Special Leave Petitions were disposed of accordingly, allowing the petitioner to raise the contention regarding the taxability of "drill bits" for subsequent assessment years before the assessing authority.
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